S-Corporation

Law Office of David M. Goldman PLLC represents individuals and Florida Businesses in Jacksonville and the surrounding areas in Florida Business law and Florida Business Formation. Our Florida Business Attorneys and Florida Business Lawyers work with clients in to help them choose the correct entity to use when conducting business.

A Florida Subchapter S-Corporation ("S-Corp") is generally more complex and structured than the typical partnership, but does not have to be as complex as a C-Corp. The entity is formed as a C-Corp and within 120 days of formation elects to be treated as a S-Corporation. This election allows for the profits and losses of the company to "pass through" to the shareholders. As a result, the entity is not taxed and there is only one level of taxation. These tax advantages require compliance with many regulations that limit the number of shareholders to 100, limit who can be a shareholder, and limit the stock to only one class. There are other limitations and these should be considered when making this choice

The owners of a Florida S-Corporation are called shareholders. The shareholders own stock in the company. The stock represents their interest in the entity. In a Florida Corporation, the shareholders elect representatives to manage their interest. The representatives of the shareholders are called Directors. All of the directors as a body are referred to as the Board of Directors. The Board of Directors elects the officers of the company to run the day-to-day operations and report back to the directors.

There are formal requirements that include yearly meetings of the board of directors. At these meetings the Secretary of the Corporation must take minutes. When there is to be a vote, everyone must be given notice. Since Florida Corporations can have many owners or shareholders, proxies can be used so that shareholders can assign their voting rights to an individual or group of their choice.

Directors and officers do not have to be shareholders in the business. The corporation is popular because it allows for many owners, segregates the duty of management form the owners, and the creditors of the business cannot look to the owners for repayment of debt from their personal assets. These protections can be pierced if the required formalities associated with running of a corporation are not followed.

Corporations use documents like shareholders agreements, and Corporate Bylaws to manage and set the rules of how the shareholders, directors, and officers interact. In addition, these documents can limit the rights of the parties and often set specific formalities on the style and method of management.

If you need help with starting or managing a Florida Business CONTACT our Florida Business Lawyers by email or call us at 904-685-1200 to discuss your situation today.