Last Updated on January 15, 2021 by Anda Malescu
The business structure you choose when forming a company determines everything from your day-to-day operations, ability to raise money, the amount you pay in taxes and how much of your personal assets are at risk. 6 things to know about starting a sole proprietorship business in Florida.
The most common business structures are Sole Proprietorship, General Partnership (GP), Limited Partnership (LP), Limited Liability Company (LLC) and Corporation.
What means ‘sole proprietorship’?
A sole proprietorship is the simplest and most common structure used to start a business in Florida. It is easy to form and gives the owner complete control of the business. By simply conducting business activities, you as the business owner are automatically considered a sole proprietorship. In other words, there is no distinction between the business and the owner.
In Florida, the business owner is not required to register the business with the State of Florida when he or she conducts activities under the his or her legal name.
However, when the business owner is operating under a different name than the owner’s legal name, then the business must register a fictitious name with the State of Florida.
Sole proprietorships do not produce a separate business entity and are not distinct from the owner. This means that the business assets and liabilities are not separate from the owner’s personal assets and liabilities. As a result, the owner can be held personally liable for the debts and obligations of the business, including any lawsuits.
The advantages and disadvantages of a sole proprietorship in Florida
- Easy registration
- Low cost
- Simple to file taxes
- Allows for only one owner
- Owner is personally liable for debts and lawsuits
- Difficult to raise money
In conclusion, choose a business structure that gives you the right balance of legal protections and benefits before registering your business with the State of Florida or any other State. Contact us, your business attorney in Florida to determine if the sole proprietorship structure is right for you.
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