There are several types of business entities and it is helpful to understand the structure of each before starting a business.
A sole proprietorship is owned by an individual and is the most common type of business structure chosen in Florida.
If the business does not operate under the owner’s name, the owner must register a fictitious name. A fictitious name just means that the business operates under a different name than the owner’s personal name.
Partnerships are created when two or more people co-own the business, each contribute money or property to the business and share in the profits and losses. Florida recognizes general partnerships and limited partnerships.
In a general partnership, each partner can act on behalf of all of the partners and has a right to manage the business. All of the partners are responsible for the business debt as well.
In a limited partnership, each partner can limit his or her personal liability and the partners are not responsible for the business debts. In both general and limited partnerships, the partners share the profits.
A corporation exists separately from the people who own and manage it. The corporation’s owners have limited liability and they can conduct business, execute contracts and pay taxes.
Limited Liability Company
A limited liability company is like a corporation in that it offers limited liability. It is not required to hold management or stockholder meetings and is exempt from other corporate requirements.
An experienced attorney can help prospective business owners determine which type of business structure is right for them.