Unlike a branch location, a Florida subsidiary is a separate legal entity in which the parent company has a controlling interest (at least 50% ownership) of that separate entity. The parent company has a duty to the subsidiary to promote its corporate interest, act in its best interest, and maintain a separate identity for that subsidiary.

The subsidiary is controlled by the parent company through the parent company’s ability to appoint directors, hire officers, and more depending on the terms outlined in the Operating Agreement of the subsidiary. The parent company may be held liable for the acts of the subsidiary in some instances.

Florida subsidiaries are usually preferred to a branch location for foreign companies doing business in Florida and the United States for tax and liability reasons. An experienced international business law attorney will be able to better explain the differences and benefits of creating a subsidiary of your current business based on your unique situation.

The most common forms of a Florida subsidiary is a C-corporation or LLC. It is important to discuss these options with an experienced business law attorney, as each will have its own tax ramifications. A Florida LLC is often the better option because it can be transformed into a corporation much easier than the reverse.

A Florida subsidiary may also be a good option for you if you own a company domiciled in Florida, but it is usually more appealing to foreign companies (those domiciled in another state or country).

If you are interested in starting a subsidiary or want to do business in Florida, contact Boyer Law Firm’s international business law attorneys today.