Business & Commercial Law
Florida Small Business Law
Owning a small business can be a simple or complex practical matter depending on how your business is structured and the goods or services you offer. Regardless of how easy or hard it may seem in practice, though, there is a myriad of legal issues to consider as a small business owner in Florida.
For business owners in Orlando, Miami or Tampa, it’s important to understand state and federal laws and know how to proceed when a legal issue develops. LawInfo has the Florida small business law information you need from financing a small business to workers’ compensation.
Florida Buy-Sell/Buyout Agreements
As an owner of a startup business, you’ll want to consider the possibility of leaving your business in the future and prepare accordingly. A common method to do this is to create a buy-sell (or buyout) agreement, which protects the business in the event of an owner’s departure. The agreement is made between the owners of a business and details the purchase of a departing owner’s shares of ownership by the remaining owners.
Buy-sell agreements are often used in family businesses where there may be multiple generations of business owners and the possibility of divorce. The agreement can ensure that there is a smooth transfer of ownership from an older and possibly dying owner to a younger owner. It also helps to reduce the friction a divorce may create for the business, especially if a divorced owner would threaten the welfare of the business.
A buy-sell agreement can also protect a business from an owner’s bankruptcy. Under a buy-sell agreement, the business can be protected from asset liquidation to pay for a bankrupt owner’s debts. The bankrupt owner would sell their shares to their co-owners and dedicate the resulting profits toward paying their debts.
Florida Business Structures
The type of business structure you choose for your company will affect you and your co-owners’ (if any) financial and tax liability. There are several major types of business structures, each with its unique advantages and disadvantages. You should consult with a small business attorney to determine which structure suits your business needs.
The types of business structures you can make in Florida include:
- Corporations—The most complex structures. Owners (called “shareholders”) possess very limited liability because the corporation is considered a legal entity with its own liability separate from its owners and operators.
- Partnerships—Structures in which two or more people share ownership and liability. There are three partnership sub-structures (general, limited and limited liability partnerships) that attribute the co-owners’ shares of ownership and liability differently.
- Limited Liability Companies (LLCs)—These structures are similar to partnerships and sole proprietorships but possess similar liability standards as those of corporations.
- Sole Proprietorships—The most basic structures. A sole proprietorship is operated and owned by a single person who is often legally indistinguishable from their business. Therefore, owners of sole proprietorships carry the most liability of any other business owners.
Can an Attorney Help My Small Business?
A small business owner should get assistance with legal matters as they can ruin a business if mishandled or ignored. Issues like defending against wrongful termination claims or negotiating the acquisition of another company’s assets are complex and time-consuming. Retaining an attorney to help prevent legal problems is a wise move.