Corporations, LLC’s, and Limited Partnerships

Business Law Scope of Practice

The most common types of business entities in Florida are limited liability companies, corporations amd limited partnerships.   The type of entity that best suits a business depends on the particular characteristics and goals of each individual company.  The attorneys at Fisher, Butts, Sechrest & Warner, P.A. are experienced in all aspects of business law including forming companies, corporate law, business litigation, collection of debts, operating and shareholder agreements, acquiring federal employment identification numbers, and government compliance.

LLC’s

A limited liability company is essentially a partnership involving as few as one partner /owner or dozens of owners.   Owners are called members and ownership is reflected in membership units.  Limited liability companies are managed by their members or perhaps a managing member or managing members.   A member’s  liabity is limited to the amount invested in the company.   Personal assets of members are protected from company liability.  The control of the company, ownership interest, and distribution of profit or losses is described in a document called an operating agreement.  The tax liability of of a limited liability company passes through to its members, avoiding a “corporate tax” or “double taxation” in the same way an S-Corporation avoids double taxation.

Corporations

A corporation may have a few as one shareholder or thousands of shareholders.   The ownership interest of each shareholder is reflected in shares of stock.   Corporations are managed by a board of directors that are elected by the shareholders.  Shareholder liability is limited to the amount invested.  Personal assets are protected from company liability.  The control of the company, ownership interest and distribution of profit or losses is in direct proportion to the number of shares of stock owned by the shareholders.  The tax liability of a corporation is paid by the corporation unless it elects to be taxed as under subchapter-S of the Internal Revenue Code.    The tax liability of a sub-S corporation passes through to its shareholders.  Limited liablity companies can also elect to be taxed as a subchapter-S corporation.

Partnership Agreements

Limited partnerships have one general partner and at least one limited partner.  The general partner has unlimited liabilty, so it is typically a limited liability company or corporation.  The general partner controls the company.  The liability of the limited partners is limited to the amount invested.  The tax liability of the limited partnership passes through to the general and limited partners.