What Are S Corporations in Florida?
Corporations come in two versions. C corporations are the entities you think of when you hear the word "corporation." These entities can have millions of shareholders. They protect the personal assets of owners with limited liability. However, due to the number of shareholders, C corporations are subject to double taxation.
An S corporation is for smaller businesses that have a more manageable number of shareholders. It also provides limited liability for owners. The IRS treats an S corporation as a pass-through entity with profits that only get taxed once.
Does Your Corporation or Limited Liability Company Qualify for S Corp Status in Florida?
S-corp business formation does not happen at the state level. Florida corporations and limited liability companies must qualify for treatment as an S-corp with the IRS. To elect treatment as an S-corp in Florida, you will file IRS Form 2553.
The IRS will also look at your business structure to verify that your business is eligible for S-corp status.
Specifically, your business must satisfy all of the following for the IRS to accept your election:
- A domestic corporation or limited liability company
- No more than 100 shareholders
- Only one class of stock
- Shareholders that are individuals, estates, exempt entities, or trusts
- No shareholder that is a partnership, corporation, limited liability company, or non-resident alien
- No ineligible corporation types, including financial institutions and insurance companies
Contact our Miami business lawyers to discuss your options if you want an S-corporation but fail one or more requirements.
Benefits of S Corporation Business Formation in Miami
Electing treatment as an S corporation can have several benefits, including:
- Limited liability
- Avoiding double-taxation
- Centralized business operations
- Simple ownership transfers
- Easy accounting
There are some practical effects of these benefits:
Less Personal Risk in Business Litigation
Creditors and opposing parties in business litigation cannot go after the shareholders' personal assets like homes and cars. This characteristic can benefit a business venture like hotels and tour operators.
Easier to Maintain Corporate Governance
The business entity exists separately from its shareholders, with a vision and goals. While shareholders benefit from the business's success, they do not have the legal rights to interfere with its operations like LLC members have. This characteristic benefits small businesses that want to add investors without surrendering control.
Tax Benefits
As a pass-through tax entity, the business does not pay income taxes at the corporate level. Instead, owners pay taxes on their share of the business's profits.
Maximize your chances of success in S Corporation business with our trusted attorneys in Miami. We help you secure favorable deals.
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Why Do You Need an S Corp Lawyer in Miami, Florida?
Neither the state of Florida nor the IRS requires you to use a business law attorney for your business formation.
However, a South Florida business lawyer can provide several benefits, including:
- Advising you about the benefits and potential legal pitfalls of each entity type
- Preparing and filing your corporate paperwork correctly
- Drafting articles of incorporation, bylaws, subscription terms, financial arrangements for the creation and opening of accounts, and shareholder agreements, like buy-sell agreements
- Lease analysis and review
- Corporation formation “S” and “C” types
- Developing a plan to reduce regulatory compliance risks
Additionally, your attorney can help you when additional legal matters arise, such as business contracts.
The most important role of your corporate counsel is to help you get things right the first time.
The Internal Revenue Code is complicated and constantly changes. A mistake could result in significant tax underpayments, penalties, and interest. It could also leave you open to personal losses for business liabilities. Forming your business correctly with an experienced attorney like Andrea A. Willis avoids these problems.
Our Legal Process for S Corporation Formation
We begin forming your business by listening to your goals and concerns during your consultation. This discussion will help us identify the options that will meet your business interests. We will explain the legal issues surrounding each type of entity so you know the benefits and risks.
Once you pick a business type, we prepare the articles of organization for your LLC or articles of incorporation for your corporation. Either legal structure can elect S-Corporation treatment at the federal level. The articles give the state basic information about ownership of the corporation and where people can find the registered agent.
After your paperwork has been approved, we have experience helping clients develop compliance plans for conducting corporate meetings, maintaining corporate minutes, and satisfying the other requirements for maintaining a valid corporation.
Why Choose Lawyer For Business as Your Miami S Corporation Lawyer?
Our firm in Miami-Dade County helps form, grow, and manage your business.
Benefits of working with our firm include:
Corporate experience: Our lead attorney has over 13 years of experience, including nine years in private practice and five as corporate counsel.
Strategic guidance: We are concerned about your success — not just the immediate legal issue you bring to us — and help you develop a comprehensive plan to address your business and legal goals.
Broad range of solutions: Our firm can help with everything from intellectual property to employment laws.
Contact us to learn more about how we can help you.
Areas We Serve
We proudly serve businesses across New York and Florida. Below, you'll find some of the key locations where we've helped businesses thrive.
- In New York:
- In Florida:
Miami
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