As you work through the process of starting a new business, you’ll have lots of difficult decisions to make. However, there are perhaps none more important than choosing the state in which you will incorporate your new entity.
There are many reasons to form a business in Florida, including:
Strong Corporate Veil
In some states, it is relatively easy to pierce the corporate veil and hold shareholders personally liable for a company’s debts. This is not the case in Florida.
In Dania Jai-Alai Palace, Inc. v. Sykes, the Florida Supreme Court ruled that the shareholders of a business remain immune from personal liability unless it was “formed or used for some illegal, fraudulent or other unjust purpose which justifies piercing of the corporate veil.”
This ruling means it’s typically not possible to pierce the corporate veil in Florida just because of a simple mistake or administrative error.
Expansive Shareholder Agreements
When forming a business, it is quite common for owners to agree in advance on matters like:
- Corporate governance
- Board constitution
- Management compensation
- Dividend policy, and
- Option pools
Some states have laws that severely limit the scope of these shareholder agreements. Florida is not one of them.
Florida law expressly authorizes almost any shareholder agreement, so long as it is not contrary to public policy and signed by all shareholders, among other requirements.
Low Incorporation Fee
In many states, incorporation fees are tied to the size or structure of the business.
In Delaware, for example, the cost to form a corporation with 1,000 no-par value shares is $89. However, the fee to create a corporation with 2.5 million no-par value shares is over $10,000.
The state of Florida doesn’t penalize businesses in this way, and the filing fee for any and all corporations is just $70.
Additionally, if a Florida business later needs to amend its articles of incorporation to increase its authorized shares, it only needs to pay a $35 filing fee. Some states charge hundreds of dollars.
Florida Business Attorneys You Can Count On
If you need help starting a new business in the state of Florida, please don’t hesitate to get in touch with the knowledgeable business attorneys at The Frazer Firm in Jupiter, Florida. Our team has been assisting business owners and entrepreneurs with the incorporation process for many years, and we would love to do the same for you.
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