A new business venture, like a new house, starts with a solid foundation. When you begin planning a new enterprise, the advice of trusted Florida corporate lawyer ensures that you do not miss critical steps in the process.
The all-important first step of establishing a business begins by defining a clear separation of business and personal affairs through establishing a legal entity, such as a corporation or a limited liability company, to protect your own assets from your business’ liabilities.
When choosing a business entity, you will have a wide array of options – one size does not fit all. Qualified legal counsel will explain the various types of entities and the different tax implications for each, ensuring that your corporate structure is firmly established. When you are ready to explore incorporating your business, call Boyer Law Firm, or e-mail us using the Contact form. Our attorneys will guide you through the practical and legal implications of forming a new business.
Below you will find answers to the most commonly asked questions when incorporating.
ARE MY PERSONAL ASSETS PROTECTED SIMPLY BY INCORPORATING?
The short answer is “no.” One of our areas of practice involves what is called “piercing the corporate veil.” What that means is that we go after the individual owners of a corporation if there has been something concerning the corporate form that they have failed to maintain. The “corporate veil” is that invisible legal screen that protects your personal assets from the liabilities of the corporation. That legal screen is only effective when you have taken the right legal steps to ensure its continuation.
We have had many clients come to us after having used an internet company to file their original corporate paperwork only to find that their corporation was essentially worthless because they did not take the proper steps to ensure its continued existence. “But no one ever told us this!” is an all too common quote of the clients that did not use trusted legal counsel to incorporate their business.
We are most successful against those corporate owners that simply filed their incorporation(s) using some form they found or purchased online. We also defend those types of law suits as well. What we have found to be the biggest problem for those involved in “piercing the veil” lawsuits is the simple fact that no one explained to those owners that incorporating is just step one in protecting their personal assets. So, in essence, those corporate owners were operating with a false sense of security and leaving their family’s hard earned assets and security for their future open to seizure by creditors.
Should I Form a Delaware or Nevada Corporation?
There has been a great deal of myths all over the internet promoting Delaware Corporations as essentially tax-free corporations to conduct business. This is patently false as any U.S. sourced-income will be taxed by the federal government. Also, a great deal of advertising and salesmanship goes toward the promotion of “Nevada Corporation” supposedly because “the IRS will not find you!” To date, we have been unable to find any benefit to doing this over simply incorporating here in Florida. If anything, it is more expensive than simply incorporating in Florida if your business is here.
First, if you are doing business here in Florida, you will have to register your corporation with the Florida Secretary of State as a foreign corporation, even if you have incorporated in Nevada or Delaware. There is a yearly fee for foreign corporations, which is the same amount as the yearly renewal fee for a Florida corporation. Thus, in addition to paying the yearly fee to maintain your Nevada or Delaware corporation, you are also paying a yearly fee to do business here in Florida.
Delaware is suited for large corporations that have numerous shareholders and want to keep a management-friendly court system on their side. If you have less than 100 shareholders, and do not plan to “go public” by selling shares on the NYSE on Wall Street within the year, a Delaware corporation will be a burden.
OUR INCORPORATION INCLUDES THE FOLLOWING:
For most clients, our standard documents package includes the following:
- An initial one hour meeting with an attorney to discuss your new business venture and its potential needs. It is at this meeting we discuss the different types of corporations that can be formed.
- We file your initial corporate paperwork once we have chosen the correct entity for your present situation. We cover the filing fees and advertising costs. We also take care of publishing any necessary notices for your corporation.
- We obtain your Federal Employer Identification Number (FEIN). You will need this number to open up a bank account. Even if you do not have any employees, this number also acts as your tax identification number for your new business.
- We obtain a corporate book and corporate seal for you.
- We will prepare a standard Shareholder Agreement or Operating Agreement, depending on what type of entity you have chosen.
- Once we have incorporated you and obtained your corporate book and seal, you will have a one hour “Operational Meeting” with an attorney. It is at this meeting that you will receive several memorandums on various items that you can take care of on your own. We will discuss the highlights of these memos and answer any questions you may have concerning what we cover in the memos. We also review the corporate book and explain what each section means so that you continue to use the book once you leave our office (as opposed to leaving it sitting on a shelf because you did not know what to do with it). We will review you Shareholder Agreement/Operating Agreement at this meeting. We can also discuss the types of insurance you should consider purchasing to protect your hard earned investment until the business can protect itself.
- We do charge our normal hourly rates for any customization of our standard corporate paperwork and shareholder agreements/operating agreements. Customization normally occurs in newly formed corporations with multiple owners, who each have their own personal concerns or objectives surrounding the new business. The customization normally surrounds how to pass their ownership onto their heirs and how to buy out another owners interest in the business.