What Are The Benefits Of A Corporation?
The initial filing requirements for incorporation are less expensive than an LLC, so many people choose to start a corporation to limit their startup costs. With an LLC, there is a management agreement or an operating agreement, and there are certain questions that have to be answered with great specificity. Some people don’t want to go that route. They want the easiest, quickest way to do business and not have personal liability, which is a corporation.
What Is Needed To Form A Corporation?
In order to form a corporation, you have to file the articles of incorporation with the Department of State. Once they return those, you have to make sure that the name the person has chosen is clear. When I represent people, I do a name check for them. You can pay the state to make a judgment on whether or not your name will be acceptable before you file, but that costs money and you have to wait. If you have a name that is close to another one and you are concerned about it, you can always file it and the state will give you a certain amount of time to amend that.
If you have any assets that need to be placed in the business, those need to have the title changed over into the corporations. You will receive a federal ID number and you have to get a certified copy of the articles of incorporation from the state of Florida to open a bank account in the corporate name. Once you have that account, you can start taking checks and start advertising as an incorporated entity.
Do I Need An Attorney To Form An LLC?
An attorney is not required to form an LLC but it is not a good idea to do it by yourself. If you are going to operate as an LLC and keep that shield from personal liability available to you, then you need to have an operating or management agreement. If you use one off the internet, you are probably going to miss something that is particular to your line of business or management setup.
What happens if things go wrong? You have to take into account all of the specific issues that may arise in the future. When I talk to a client about this, I ask questions about expansion and growth and the number of investors. If they envision that it is going to change in the future, then we need to make provisions for that, and that is very difficult for a person to do on their own with no legal training.
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