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Updated by Michael Feinstein on Jul 14, 2017
Headline for Steps Involved in Forming a New Business in Florida
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Steps Involved in Forming a New Business in Florida

There are several legal steps involved in forming a new business. Whether you are launching a startup or spinning off a subsidiary of an existing company, covering your legal bases is critical to securing your desired tax treatment and minimizing your risk of liability.

While each new business’s specific needs will be unique, there are a number of issues that almost universally require careful consideration when forming a new entity. Here is a brief introduction to some of the critical steps involved:

1

Choice of Entity

Choosing the right type of entity is not as simple as picking from a list. Tax, liability, transferability and other considerations will all help inform your decision about whether to form a limited liability company (LLC), corporation, limited or general partnership, or other entity.

2

Organizational and Governing Documents

Along with state-level organizational filings, company founders must prepare and execute the necessary governing documents as well. These may include bylaws, an Operating Agreement or Shareholder Agreement, resolutions, and various other forms of documentation.

3

Licenses and Permits

Many types of businesses are subject to licensing and permitting requirements in Florida. Securing certain licenses and permits can take time, and company founders should plan ahead to make sure they can hit the ground running.

4

Regulatory Compliance

In addition to licensing and permitting requirements, companies in regulated industries will often be subject to a variety of other onerous compliance obligations as well. These may require inspections, approvals or other bureaucratic involvement that can hold up new projects and initiatives.

5

Ownership of Intellectual Property

From licenses and assignments from company founders to U.S. Patent and Trademark Office (USPTO) registrations, new entities will often have several steps to take in order to secure their intellectual property rights.

6

Financing

In many circumstances, forming a new company means securing debt or equity financing. Before taking on debt or outside investors, it is critical to make sure you understand the terms of the deal.

7

Insurance

There is no substitute for good insurance. If you are launching a startup, you will need to carefully assess your new company’s insurance needs. If you are spinning off a subsidiary, you will need to make sure your current corporate policy provides the necessary coverage.

8

Employment Contracts, Policies and Procedures

Employment law can be a minefield for companies that fail to appreciate the legal and practical implications of taking on employees. From individual employment contracts to company-wide policies and procedures, carefully-crafted documentation can be key to protecting a company’s assets and minimizing its risk of employment litigation.

9

Customer and Vendor Contracts

Well-thought-out and carefully-structured commercial contracts can be critical to a company’s long-term success and stability as well. The “boilerplate” terms matter, and clearly defining the relationship with appropriate terminology can go a long way toward preventing costly contractual disagreements.

10

Remaining in Good Standing

Once you establish a new entity, you need to keep it in good standing. Failure to observe the requisite formalities and submit the requisite annual filings can lead to financial penalties and potentially expose the company’s owners to personal liability.