Archive for the ‘Business Law’ Category

What is the Best Legal Structure for My FL Business?

Tuesday, April 12th, 2022

What is the Best Legal Structure for My Florida Business?

Our MLG Business Litigation Group attorneys know that it may be difficult for prospective business owners to determine which legal structure is best for their Florida business.

While the type of business can help determine which legal structure will help drive its growth, the number of parties involved in its creation, operation, and success will ultimately determine whether you form a sole proprietorship, general partnership, LLC, or corporation.

Here is what new business owners need to know about starting their vision on the right — and legal — foot.

Is a Sole Proprietorship Legal Structure Right for My Florida Business?

The most basic legal structure for a Florida business is a sole proprietorship.

Like it sounds, a sole proprietorship means you — solely — are the business.

Sole proprietors must register the business under a name that is not their own and renew it every five years with the Department of State Division of Corporations.

The advantages of sole proprietorships include having zero equity interests issued to other parties, no restrictions on how the company operates, and the ability to transfer its ownership freely.

The most common disadvantage of owning and operating a sole proprietorship is that there is no protection from its creditors, making the business owner personally responsible for all debts associated with the company.

That means all creditors, including vendors or a property owner who holds the company’s lease, can sue the business owner personally.

To help avoid the risk of creditors successfully pursuing your business for its debts, consider creating a partnership, LLC, or corporation to protect your interests.

Is a General Partnership Legal Structure Right for My Florida Business?

When two or more people form a for-profit business in Florida, it is called a Partnership.

While no formal registration is needed to start a Florida partnership, all standard business enterprise rules apply once it is up and running, including how your business operations are governed by Florida’s Revised Uniform Partnership Act.

In short, creating a partnership agreement establishes a rulebook for your business.

This legal document dictates how the:

  • Business is run, including the relationships between the partners
  • Profit and loss sharing is distributed
  • Conflicts will be resolved

Talk to our skilled Florida business start-up attorneys today to learn if a general partnership is right for your company, so we can help you get started.

Is a Limited Liability Company (LLC) Legal Structure Right for My Florida Business?

Forming a limited liability company (LLC) in Florida provides its owner(s) with limited liability protection, so personal assets are not at stake in the event your business is sued or cannot pay its debts.

There are multiple advantages to the LLC legal structure, too, including the ability to create a legally binding operating agreement and address member disputes without litigation.

Is a Corporation Legal Structure Right for My Florida Business?

A corporation’s legal structure offers liability protection to the owner, so all assets and liabilities can be in the name of the corporation.

Once the owner files for, and receives confirmation of Articles of Incorporation, he or she should sign all leases, contracts, and other legal documents in name of the corporation only, and not personally.

The advantages of incorporating your Florida business include:

  • Limited liability for debts and actions of the corporation
  • Personal asset protection for shareholders
  • The ability to raise funds and generate capital through the sale of stock
  • Corporations file taxes separately from their owners, providing the ability to only pay taxes on corporate profits paid in the form of salaries, bonuses, and dividends
  • Shares of ownership can be transferred unless restricted by articles of incorporation, shareholder agreement, bylaws, or another agreement between the corporation and its other shareholders

Determining which business structure is best for your company can be complex. Our skilled Florida Business Litigation attorneys help simplify the process, so you can make informed decisions about your future success.

Contact MLG Business Litigation Group in Florida Today to Get Started

Contact our MLG Business Litigation Group, a Division of The Morgan Law Group, and business start-up attorneys in Florida today at (786) 706-9228 to discuss your unique company needs.

We will review your documents and/or offer our legal advice using a flat fee, so you can plan and pay for your legal costs upfront, so you can take the next steps and schedule your initial Zoom meeting today.

The Top 10 Mistakes Made When Starting & Operating a Florida Business

Tuesday, April 5th, 2022

The Top 10 Mistakes Made When Starting and Operating a Florida Business

Our MLG Business Litigation Group attorneys know how difficult it can be to navigate the legal requirements associated with starting a business in Florida. 

That is why we have designed unique Florida business start-up packages that help our clients establish their vision using flat legal fees they can plan for to help avoid the common pitfalls associated with starting a company.

Here is what new business owners need to know to help avoid the top 10 mistakes made when starting and operating a Florida business.

Mistake One: Failing to Register the Business with the State of Florida

All Florida businesses new and existing must register their companies with the Florida Department of State when they are conducting business within its borders.

Failing to do so may result in difficulties establishing a company bank account, which may leave the person or partners personally liable for business debts and obligations.

Mistake Two: Failing to Choose a Unique Business Name

Before you can establish your brand, and register your company with the State of Florida, you must choose a unique business name that does not interfere with the intellectual property rights of a third party.

Simply put, if you choose a company name that is the same or remarkably like an existing brand, you may be required to change it and potentially be held liable for any damages that resulted from your oversight.

Vetting the business name first will save time, money, and the headache of losing your brand equity later.

Mistake Three: Failing to Establish Partnership or Shareholder Agreements

If you are not the only one starting a new company that involves more than one principal, you must develop a partnership, LLC operation, or shareholder agreement in place before the business begins.

These agreements set forth the expectations for the business and its owners, and include provisions that dictate:

  • How business decisions will be made
  • How profits will be distributed
  • What will happen in the event of a dispute between the parties
  • When owners can transfer their business interests
  • What will happen in the event of the death, disability, or divorce of one of the partners

At MLG Business Litigation, our skilled Florida business start-up attorneys provide flat fee partnership agreements that will allow you to begin operating with confidence.

Mistake Four: Failing to Adequately Address Accounting and Tax Issues from the Start

Before you can successfully keep track of your business’s accounting needs, including basic accounts payable and receivable requirements, you must determine which documentation method you are going to use.

Whether you prefer to use in-house software, like QuickBooks or something similar, or hire a bookkeeper or Certified Public Accountant to do the work, you must decide before billing customers or paying vendors.

Failing to establish a reliable accounting procedure first can significantly impact your business’s profits, losses, and overall success.

In addition, all for-profit Florida businesses are required to pay local, state, and federal taxes. To avoid IRS penalties, establish a clear and concise accounting process from the start.

Mistake Five: Failing to Separate Personal Accounts from Business Accounts

This one is simple but often overlooked.

If you do not separate your personal financial accounts from your business accounts, you cannot properly shield yourself — or your partners — from personal liability for the activities and actions undertaken on behalf of the business.

That means creditors can hold a shareholder, member, or partner personally liable for the acts of the business.

All businesses should establish a separate bank account — or accounts, when necessary — and any business expenses that must be paid from that account to avoid commingling business funds with personal funds.

Mistake Six: Failing to Comply with Florida Employment Laws

The fines and penalties associated with violating Florida employment laws are significant and can swiftly cripple a start-up’s ability to successfully operate.

The moment your company hires its first employee, the business becomes an employer, you must comply with certain employment laws, including wage and hour, civil rights, and whistleblower laws.

Mistake Seven: Failing to Develop and Enforce Business Contracts

A common Florida business start-up mistake is entering into an agreement with a customer, vendor, strategic partner, or even an independent contractor with a solid business contract in place.

Business contracts outline the expectations of each party involved, specifically identifying each party’s responsibility, the timeline of the agreement, and at what expense.

When no written contract is in place, any person or business can default on the agreement without being held responsible for its breach. This could easily jeopardize your business before you even get started.

Mistake Eight: Failing to Quickly and Accurately Address Business Disputes

Whether it is an intra-office spat between partners or a disagreement between the company and a vendor, failing to assess the complaint and a potential remedy early could lead to lawsuits and litigation.

When the courts become involved, the outcome will be costly. This can cripple a small business from the start.

That is why it is important to have solidly constructed contracts in place that address dispute resolution, so you and your company can mitigate the risk of costly litigation.

Mistake Nine: Failure to Obtain a Required Business License

Not all Florida businesses require a license to operate in the state, but if yours does, you much procure the license before you start conducting business. Failing to do so may result in substantial financial penalties.

Depending on where your Florida business is located, the local licensing requirements may differ. Our skilled Florida business start-up attorneys can help you determine if you need a license, which type(s), and how to successfully file for the proper credentials, so you can get your company off the ground quickly.

Mistake Ten: Failing to Purchase Liability Insurance

When companies do not purchase liability insurance, they are opening the door to lawsuits that may require payment directly from the company, business owner, partners, or shareholders’ pockets.

Do not wait until you are faced with a claim to engage in risk management for your business.

One of the best ways to manage risk for your business is to purchase liability insurance.

Contact MLG Business Litigation Group in Florida Today to Get Started

If you are ready to start a Florida business or need help moving your company to the next level of operation, our skilled Florida Business Litigation attorneys can help provide real-time legal guidance, advice, and solutions.

Contact our MLG Business Litigation Group attorneys in Florida today at (786) 706-9228. We can help you understand your complete legal rights and options to start and keep your Florida business on track.

What is the Difference Between Derivative and Direct Shareholder Lawsuits?

Monday, February 28th, 2022

What is the difference between a direct lawsuit and a derivative lawsuit?

MLG Business Litigation Group, our Florida shareholder dispute attorneys know that to prevent or remedy a wrong either on behalf of a corporation or to protect that shareholder’s ownership and interests, lawsuits may become part of the professional landscape.

Our Florida business litigation attorneys help shareholders determine whether to bring a derivative lawsuit or a direct lawsuit against the corporation.

What is the Difference Between a Derivative and Direct Lawsuit in Florida?

In the simplest terms, a derivative lawsuit allows shareholders to seek restitution on behalf of the corporation, acting on behalf of the company because those in control failed to assert a claim against a liable person or party that caused the company harm.

Derivative lawsuits often allege improper actions by those in charge of the entity, which may include:

  • Self-dealing
  • Entity mismanagement
  • Breaches of the duties of loyalty and care owed to the corporation and its shareholders

However, the shareholder cannot bring a lawsuit unless and until the entity fails to act on its own behalf.

Conversely, a direct lawsuit is the result of a shareholder bringing a claim based on their individual ownership of shares in the corporation.

Direct claims are those seeking legal remedies to the individual directly, and may involve:

  • Contract rights related to shares
  • Inability to vote on a particular entity action
  • Rights to review the records of the corporation
  • Rights related to the recovery of dividends

Shareholder disputes can be complex without a skilled Florida business litigation attorney by your side. We can help you determine which approach is right for your unique needs, so you can pursue the legal remedy and outcome you deserve.

Contact MLG Business Litigation Group in Florida for a Free Case Assessment Today

If you are embroiled in a shareholder dispute and are unsure of what action to take against the corporation, Contact our MLG Business Litigation Group attorneys in Florida today at 888-904-2524 for a free case evaluation. We can help you understand your complete legal rights and options to develop a successful approach to pursue tangible results.

What Happens to a Deceased Business Partner’s Portion of a Florida Company?

Thursday, December 30th, 2021

What happens when a business partner dies in Florida?

At MLG Business Litigation, our Florida attorneys know that starting and building a business is a life-long dream for many. Often, business owners place all their focus on success but rarely plan for an emergency. Especially one that involves death.

Unfortunately, tragedies can occur.

When the owner of a Florida business passes away, several things can happen.

A succession plan is put in motion, the partnership agreement dictates the next steps, our Florida laws take the lead in the direction of the company, or confusion ensues.

When a Florida business owner passes away, the fate of the business depends on its structure.

Here is why.

Why a Florida Business Structure Holds the Keys to Its Succession

Our Florida business litigation attorneys explain to new business owners that choosing the right business structure from the beginning of its organization is a key step in ensuring the business continues the way the partners imagined after one is no longer around.

From the beginning, an experienced Florida business attorney can determine which structure is best, based on the partners’ circumstances and business goals.

Sole proprietorships, corporations, and LLCs all have different trajectories when a partner passes away.

Sole Proprietorships & Succession Plans

Sole proprietorships are businesses where the owner and the business are legally the same.

That means, if the owner passes away, the business also ceases to exist.

The business assets will be liquidated by the estate to pay off any debts and the balance will be distributed to the estate’s beneficiaries.

Corporations & Succession Plans

Unlike, sole proprietorships, corporations do not cease to exist when an owner passes away.

When a Florida corporation owner passes away, the estate automatically becomes the owner of the deceased’s shares.

The same is true when a single shareholder or majority shareholder of a corporation passes away.

His or her estate becomes the new owner of the company until the estate is closed and the shares are distributed according to either the decedent’s will or Florida’s intestacy laws.

LLCs & Succession Plans

Florida LLCs operate under the terms of an operating agreement, making them much different from other business formations.

The operating agreement usually specifies what will happen in the event one of its members passes away.

The agreement will dictate whether the business should continue and if surviving members may allow new members in.

If the agreement does not outline a succession plan, Florida law will determine the next steps, which could result in the dissolution of the business and the distribution of the assets.

Partnership agreements can provide alternatives to the closure, including sales, acquisitions, or details that allow the business to continue operating.

If you are a business owner who is navigating the details of a partner or shareholder’s death and are unsure of the legal requirements, we can help outline the details of your unique circumstances during a free case assessment.

Contact MLG Business Litigation Group in Florida for a Free Case Assessment Today

Protect your legal rights and learn more about your business ownership or partnership options by contacting our MLG Business Litigation Group attorneys in Florida today at 888-904-2524 for a free case evaluation.

Can My Florida Business Be Sued by a Vendor Without a Contract in Place?

Thursday, December 16th, 2021

What Constitutes a Contract in Florida?

At MLG Business Litigation Group, our Florida attorneys know that as a business owner, you are responsible for limiting risk and ensuring the company runs smoothly.

To succeed, you partner with vendors that provide necessary assistance and support in several ways, including providing goods, services, or other operations outside of your business’s expertise.

For this reason, it is vital that vendor contracts are put in place to ensure your contractors fulfill their essential roles, and to protect your business interests when they do not.

Without vendor agreements in place, it is still possible for your company to legally pursue the vendor for falling short of your verbal or electronic agreement, but it is also possible for the vendor to sue your company for failing to uphold the agreed-upon terms.

Here is what Florida business owners need to know about vendor agreements.

What is a Vendor Agreement?

A vendor agreement or contract dictates the relationship between your business and the vendor.

This contract outlines what the vendor provides, and how your company pays for the goods or services delivered.

More importantly, vendor contracts provide the legal details that outline what happens when one party fails to uphold their end of the agreement, which could include arbitration or litigation clauses.

Vendor agreements are typically most valuable when something goes wrong, so both parties know who is responsible for resolving the issue.

That could include outlining terms and conditions for:

  • Obligations of the parties
  • Rights of the parties
  • What constitutes a breach of contract
  • Remedies in the event of a breach
  • Arbitration or mediation provisions
  • Termination provisions

When a vendor agreement or contract does not exist, and a vendor believes your company did not fulfill its obligations, they have the option to sue for damages.

What Happens if No Vendor Contract is in Place?

While all vendor contracts and agreements are unique to the parties involved, the lack of one also presents challenges for both parties.

The law creates a contract based on the conduct of the parties and the parties’ understandings.

For example, if two parties exchange emails that agree to a transaction, but did not physically sign a contract, their conduct, agreement, and performance may form an enforceable agreement.

If the vendor provided goods or services to the business and the business did not pay for the deliverables, the vendor would have the ability to bring a claim against the business.

The issue becomes, why the business did not pay. If the business accepted the benefit of the vendor’s deliverables, it is reasonable for them to pay for the goods or services and would be unfair if they did not.

However, there are circumstances where businesses do not pay, including they did not get what they asked for — even without a contract in place. Were there delivery delays? Missed deadlines? Was the product inferior or different than what was agreed upon?

This becomes a legal issue and will require the help of a skilled business litigation attorney in Florida to protect your best interests.

Contact MLG Business Litigation Group in Florida for a Free Case Assessment Today

If your business is being sued by a vendor for breach of contract, or a dispute arising without an agreement in place, contact our Breach of Contract Litigation attorney in Florida today at 866-275-9595 for a free case evaluation.

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