Reasons Why Florida is Considered a “Corporation-Friendly” State
The location of incorporation for a business is an important decision. The decision is driven by many reasons including how much business sense it makes in relation to the growth of the company. The location of incorporation is also a logistical decision as a company will want to have a business office of some sort based in the state of incorporation. One of the principal reasons why a company may choose one state over another for the purposes of incorporation relates to the laws regulating businesses in the jurisdiction. Florida is often considered an ideal place for incorporation given its business-friendly laws and taxes regulations.
To set up a corporation in Florida, the company must pay fees associated with the application. Florida has a relatively low corporation filing fee of $70.00. Low business registration filing and maintenance fees are appealing to companies who are looking to cut cost during the business set-up phase. To maintain a corporation filing, Florida corporations are required to filing annual reports with the state. These annual reports are provided to the shareholders of the corporation and describes the operations and the financial condition of the business. The fee associated with the filing of an annual report for a for-profit organization is also relatively low at $150.00.
Laws & Regulations
When it comes to general laws and regulations governing corporations, Florida remains an attractive option for incorporation. Florida generally favors businesses in issues of liability and employment law. When it comes to business-related lawsuits, corporations want to possess registration in a state where there is an advantageous lawsuit climate. In addition, the limited liability feature of corporations prevents the courts from going after the officers of the corporation in their personal capacity. In order for the courts to go after an officer (or officers) on a individual basis, the act in question must be intentional, self-serving, and egregious in nature. In fact, “piercing the corporate veil” is seen as an extraordinary remedy in Florida.
Leniency in tax laws is another major benefit of incorporating in Florida. Florida is one of the few states with no individual income taxation. Although not 0%, the corporate tax is at a relatively low flat rate of 5.5%. Florida also has a number of tax deductions. The effect of the tax deductions create an environment where over half of the businesses in Florida do not pay taxes at all.
Fort Lauderdale Business Law Attorney
Hiring an attorney for your business formation activities ensures that you have a legal advantage. If a dispute arises, an experienced and knowledgeable attorney can guide you through your options and keep you informed of your rights. Florida Brendan A. Sweeney is a business law attorney with years of experience advising on business formation issues. Contact us for a consultation.