For any business owner in Florida, the subject of taxes can be a sensitive one. Regardless of business size, the question of how to structure a business to meet operational needs as well as how to balance tax liability can be a major hurdle when setting up a new venture. Taxes are one of the many reasons that S corporations have grown in popularity compared to the traditional C corporation, for example, because the S corporation avoids the double taxation associated with C corporations.
Florida state tax rules and federal regulations are equally important during any corporate structuring process, whether you are setting up a tax plan for a new company in the state, or modifying the structure of your existing business to prepare for a transitional phase. The process might seem complicated, but it often becomes easier when you make general choices first before focusing on the details. The choice between creating an S or C corporation is likely to be one of your fundamental decision points.
If you are a Florida entrepreneur, you probably are thinking of starting a new business. Your choice of business entity will have lasting consequences with regard to who owns it, how it will be managed and how it will pay taxes.
Florida entrepreneurs who have successfully built up new ventures may at some point consider turning their privately held companies into publicly traded companies. There is no rule as to when or why this may be done and it is certainly not the route for every business but it can have some advantages.
Florida entrepreneurs looking to start a new venture may not always want to go it alone. A business partner can bring a lot to the table but it does not always require that a business to be structured as an official partnership. Even if a new company is ultimately created as a limited liability company or a corporation, there may be an interest in having a partner to get things off the ground.
When looking to start a new business venture in Florida, the issues surrounding taxation can direct many of the decisions that an entrepreneur may end up making. For example, the traditional corporate structure is referred to as a C corporation. From a tax perspective, this type of business has historically paid relatively high taxes compared to some other models. This is because the corporation itself pays taxes and then the individual shareholders also must pay personal income taxes on their earnings from the corporation. That results in some monies essentially being taxed twice.
If you are the owner of a business in Florida, you know that there is no shortage to the number of decisions you must make to keep your company running. But, how much time and energy have you devoted to making decisions about how to leave your company? Business succession planning is an important thing that is all too easy to put off but that shouldn't be.
Evaluating the different types of business operating models may most commonly be something Florida entreprenuers do when initially establishing a busines. However, this can also be done once a business is up and running as it is possible to make a change in what operating structure a business utilizes in some cases. One example is if a standard C corporation wishes to migrate to a subchapter S corporation.
Many Florida entrepreneurs find it beneficial to partner with others when launching new ventures. Such partnerships may also be valuable when merging existing companies into one new entity. But, before rushing into a business partnership, people should take caution to evaluate the situation and ensure it is the right one. A partnership in business is much like that in a personal relationship and making the wrong choice can be emotionally and financially draining down the road.
Florida entrepreneurs and business owners often eagerly go into new ventures full of excitement and hopes for the future. Sometimes that future ends up manifesting as the sale of the busienss not just the running of the business. Many factors play into the decision to sell a business and such a choice must be made carefully to avoid unnecessary losses.