What does Business Planning include?

Business Planning encompasses all stages along a business’ lifecycle from formation (entity selection and management structure) through succession of interests (intra-family transitions and third party transactions). Business Planning also includes meaningful and routine dialogue with business owners to address various agreements to promote and support the continued success of one’s business.

Do I need to incorporate my business?

Legal entities, such as Corporations and Limited Liability Companies (LLC), are often used to provide protection from personal liability. Without them, creditors may sue the owner personally and reach personal assets to satisfy judgments. Generally, if a legal entity is established and properly maintained, creditors are unable to reach these assets.

Other reasons to use a business entity include creating a professional image and affording yourself to certain tax advantages to available to sole proprietors.

What is an S-Corporation?

An S-Corporation is a general corporation (C-Corporation) that has elected a special tax status with the IRS after the corporation has been formed. When a general corporation makes a profit, it pays a federal corporate income tax on the profit. If the company also declares a dividend, the shareholders must report the dividend as personal income and pay more taxes. S-Corporations avoid this “double taxation” (once at the corporate level and again at the personal level) because all income or loss is reported only once on the personal tax returns of the shareholders.

For many small businesses, the S-Corporation offers the best of both worlds, combining the tax advantages of a sole proprietorship or partnership with the limited liability and enduring life of a corporate structure. Additionally, K-1 income of an S-Corporation is not considered “earned income” and is therefore not subject to payroll taxes.

What is a Limited Liability Company (“LLC”)?

An LLC is an unincorporated entity formed by one or more persons by entering into an operating agreement and filing articles of organization with the State of Florida. Members of an LLC are protected from the LLC’s obligations and from the liabilities of the other members. This type of liability protection is similar to the liability protection available to shareholders of a corporation. An LLC may be managed by its members (owners) or by selected managers. If one person creates the LLC, it may be treated as a “disregarded entity” for tax purposes, meaning that all of the LLC’s income and deductions are reported directly on that person’s individual tax return. LLCs formed by two or more people may be taxed as a partnership or a corporation.

What is a registered agent?

A registered agent provides a registered address for the receipt of service of process in the event of a lawsuit and as a local contact for the Secretary of State and other government agencies.

Why are Buy-Sell Agreements used?

Buy-sell agreements may be used with any type of business entity to define the rights and responsibilities of owners upon the happening of different events, such as death or disability of an owner or dissolution of the business entity. Buy-sell agreements are sometimes referred to as shareholder agreements for corporations, operating agreements for limited liability companies and partnership agreements for partnerships. These agreements establish a value and payment terms for a buy-out of an owner, and generally restrict one’s right to sell one’s interests to a third party. These agreements can also describe management responsibilities, voting rights and distribution standards.