Frequently Asked Questions About Florida Business Law
Get Answers to Most-Asked Questions About Starting a Business in Florida
Lawyers at Warner, Sechrest & Butts P.A. provide answers to any business law questions you may have.
What is business law?
Business law is a large field that deals with the federal and state laws and regulations that govern the operation of businesses. Everything from the form and maintenance of a business, mergers, acquisitions, contracts, and negotiations are encompassed under business law.
How do I determine the type of business form for my business?
When selecting a business form for your business, you will need to consider several factors. We recommend that you carefully reflect on the specific goals that you may have for your business. This way, the business form that you choose will likely support your immediate and long-term goals for your business. Consider the following:
- How much taxes are you willing to pay?
- How do you wish to structure your company?
- What role does management play in your company?
- How do you plan to maximize profit?
- Do you intend to expand your company?
- Do you desire to enter into a partnership?
- Will you trade your business publicly?
- How much responsibility (and liability) do you desire as a property owner?
These factors are necessary when faced with business form options. Once you have answered all of these questions, you should gain additional insight and advice from a business lawyer in Gainesville, FL.
How are subchapter C and S corporations different?
There are two ways that laws may address the treatment of corporations when it comes to federal and state taxation. Corporations are classified into several categories, including subchapter C and S corporations.
C corporations are usually larger than S corporations. C corporation shareholders possess a significant stake in the business. As such, shareholders have different type of requirements and different levels of flexibility. C corporations receive a double taxation. This means that not only is the corporation’s net income taxed, but shareholders are also taxed directly.
On the other hand, S corporations are usually smaller in size. These type of businesses are only taxed once. Shareholders in S corporations do not hold the same type of power and flexibility as what is experienced by shareholders in C corporations. Instead, shareholders in S corporations may have distinct limitations.
If you are unsure if your company is an S or C corporations, be sure to visit our business law firm in Gainesville, FL for assistance.
What does "pierce the corporate veil" indicate?
When shareholders and other members of a business have limited liability, they can trust that they will not be personally responsible for a corporation’s debt. But, depending on the nature of the internal regulations of a company, a court may decide to lift this “veil” or protection when a creditor sues a company. Piercing the corporate veil simply means that a court of law is willing to hold the shareholders and other members of the company personally responsible for the debt of the business. As a result, creditors are able to collect their money through the shareholder’s personal property and assets.
How is a joint venture and a partnership different?
A partnership is a legal agreement that allows two or more individuals to enter into a business together. All of the parties involved are considered owners of the business. As such, they dedicate time, money and other resources into the business to ensure its success. The business lasts as long as the partnership lasts.
Meanwhile, a joint venture refers to the coming together of individuals for the purposes of a specific project. The profits for this specific project is shared among the individuals who enter into the joint venture. It is important to note that unlike a partnership, joint ventures do not require shared ownership of an overall business. Furthermore, most joint ventures conclude once the project is completed.
What constitutes a non-profit corporation?
A non-profit corporation has the power to collect profit, but generating revenue should never be the sole concern of a non-profit corporation. Instead, non-profit corporations are businesses that work for the betterment of society. Their goods and services typically benefit the general public or a specified group of people. Due to the nature of non-profit corporations, the proceeds made are usually not able to be taxed by state or federal governments.
How frequently should a corporation hold meetings and update its minutes?
Every business is structured differently, but as a general principle/formality, corporations should have consistent meetings. During every meeting, the details, updates, and issues addressed during the meeting should be recorded and documented. Not only does regular meetings help to ensure that a corporation is functioning according to federal and state bylaws, but it is helpful because it demonstrates that the shareholders and members involved in a company are making efforts to be on one accord.
Is it wise to have a Buy-Sell Agreement?
Yes. A Buy-Sell agreement is synonymous to an insurance policy or a prenuptial plan for marriages — that is, it helps to protect the interests and assets of other owners/shareholders of the company when an individual opts to buy out of the business. When co-owners attempt to buy out of a business for personal or professional reasons, it can have serious implications on a business. The owner may attempt to sale his share or take certain resources gained from the business with him/her. A Buy-Sell agreement sets the terms and conditions of a buyout to prevent devastating effects on a company when an owner decides to leave. It is a wise way for protecting the business and investments into the business by multiple members.
What happens in a corporate merger?
During a merger, two companies will combine their businesses into a new establishment in order to increase revenue, secure a greater clientele, and gain other benefits.
Will I need a lawyer to start a business?
Yes. If you desire to start a business, a Gainesville business attorney is helpful to ensure its longevity and success. There are numerous state and federal laws, plus administrative regulations, that govern how a business is formed, structured and organized. There are fees and taxes that you owe and basic standards of professionalism and ethics that you should adhere to. A lawyer can ensure that your business is up to date with these guidelines, as well as provide general advisement and counsel in the event that your business is sued, or if competition demands significant changes in the company.
Is a business plan necessary?
Yes. Proper planning is key to the success of any business.
Where can I borrow money for my business?
Funding a business is probably the most important factor to consider when starting an organization. While many people fund their businesses through their personal savings and/or the generous donations of loved ones, there are other methods for locating money for your business. A common strategy is to seek loans or investments from banks, credit unions, angel investors and capital firms. However, you should be aware that if a corporation is willing to provide large resources for the startup of your business, they may require something in return.
What permits, licenses or registrations are required for my business?
The type of permits, licenses, and registrations that you need will depend on your industry. Some universal permits/licenses/registrations may revolve around safety and health protocols, employee identification numbers, and buying/selling permits.
Will I need insurance for my company?
Always. Depending on the nature of your business, you may need general liability coverage, employee/workers’ compensation coverage, product liability coverage, and professional liability coverage.
What sort of books and records should I keep for my business?
You should keep records of meetings and your company’s bylaws. You should also keep books of financial activity that demonstrates profit, gross income, expenditures, purchases, receipts and travels.
What kind of business should I form?
We recommend that you invest in an industry that you are passionate about. The type of form for your business will depend on your short-term and long-term goals for the company’s structure and liability.
What materials do I need to bring to the first meeting with an attorney?
Bring a solid business plan to our law firm in Gainesville, FL. Be prepared to provide additional materials to support financial records.
My business is being sued. What do I do?
If you are being sued, your assets may be at stake. You should contact a business defense lawyer immediately to discuss ways to handle the suit. Report the incident with your company’s insurer as well. Upon receiving guidance and advice from your lawyer, you will need to respond to the plaintiff.
What is the purpose of title insurance?
Title insurance protect property owners and lenders when property is lost or damaged due to liens or other activity.
My insurance company refused to pay my property damage claim. What do I do?
You will need to find alternative ways to fund your expenses.
Is my insurance sufficient?
Visit our law firm in Gainesville, FL for a thorough review of your business and insurance plan.
For more information on business law and the complexities therein, rely on Gainesville business attorneys at Warner, Sechrest & Butts.