Eddie Tobey asked:
When you are starting a new business in Florida, you can set it up under sole proprietorship, a cooperative, or as a corporation. If you go with incorporating, it is the process of forming a new corporation, which can be set up as a business, a non-profit organization, or a new government of a new city or town.
Setting up your business as a corporation in Florida reaps several legal benefits.
A corporation is separate from your personal assets, meaning in the event of a lawsuit or filing for bankruptcy, creditors cannot go after you and claim your personal assets as compensation for the debt of your corporation. Your stockholders, directors, and officers are also protected from being held liable for the debts and obligations of the corporation. The maximum amount you or the other investors can lose is the amount you invested in the company and nothing more.
The corporation is also protected from the investor?s losses as well. In the event that a stockholder incurs debt or goes bankrupt, corporate properties cannot be seized as compensation. Only his shares can be used as compensation.
In a corporation, your shares of ownership can be transferred to others either as a whole or partially. It is also easier for you to set up a retirement fund under a corporation.
Under a corporation, your tax rate is lower than it would be for you as an individual, and you are legally allowed to own shares in other companies and receive corporate dividends of up to 80% tax-free.
If your corporation is in a financial bind, it is easier for you to raise funds if you sell stocks and open it to the market.
A corporation can last for a very long time. Even with the changing of stockholders, the corporation can continue to exist.
A corporation has its own credit line. Even if the stockholders? or personnel?s credit records are not so wonderful, the corporation can retain a clean slate.
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