Florida lawmakers are currently considering a bill that would affect a number of commercial landlord and tenant issues by addressing the ability for tenants to keep emotional support animals. Specifically, while it would prohibit landlords from charging more for emotional support animals, it would also allow them to ask for proof and hold a pet owner liable for any damage that they cause to property. In addition, the legislation mandates that any pet owners who obtain fraudulent letters in order to keep their pets as emotional support animals would also be penalized.

The bill has come about in part as a result of commercial landlords complaining that people are exploiting their ability to simply keep a pet with them at all times by claiming that they are emotional support animals.

What Current State & Federal Law Dictates

For legal purposes, it is important to distinguish between service dogs covered under the Americans with Disabilities Act (ADA) and emotional support dogs. The ADA dictates that individuals with disabilities may have their service animals in all areas that constitute “public accommodations,” such as stores, restaurants, schools, hotels, apartments, etc. These animals are specifically trained to assist someone with mental, physical, psychiatric, intellectual, or other disability, and the animal’s work must be directly related to that. For example, if someone is blind, they may have an animal that helps them cross the street.

However, Florida law does not protect the issue of emotional support animals in the same way (i.e. animals that provide a sense of safety or comfort to those with emotional disabilities or conditions). As a result, landlords and others have never been required to allow emotional support animals under state law. That being said, the federal Fair Housing Act does require housing facilities to allow both service dogs and emotional support animals in the interest of those with disabilities and conditions to have equal opportunity because, under the law, this animal is recognized as a type of assistance that represents a “reasonable accommodation” under the Act. As a result, the U.S. Department of Housing and Urban Development, which oversees the Act, investigates any related claims of housing discrimination, and currently allows housing providers to ask only two questions when it comes to considering requests to have an emotional support animal on the premises:

• Does the applicant have a disability (mental or physical impairment) that limits one or more major life activities?
• Does the animal provide emotional support that affects their disability and/or does the animal work or otherwise provide assistance for the benefit of that person?

These individuals must only submit reliable documentation of the disability if “the disability is not known or readily apparent.” As a result, if this legislation passes, there may be significant confusion amongst landlords concerning whether or not they are complying with landlord and tenant rights under both state and federal law.

Contact Our Florida Commercial Landlord & Tenant Attorneys If You Have Questions

If you as a landlord have questions about drafting a commercial lease so as to ensure that it complies with what both state and federal law requires, enforcing an existing lease, or otherwise handling an eviction proceeding, contact one of our experienced Tampa commercial landlord & tenant attorneys at HD Law Partners in order to ensure that you are protected.

Resource:

animallaw.info/article/faqs-emotional-support-animals

nbc-2.com/story/41569232/florida-bill-would-allow-landlords-to-require-proof-for-emotional-support-animals

ada.gov/regs2010/titleIII_2010/titleIII_2010_regulations.htm

Posted in Homeowners Association, Landlord Tenant | No Comments »

As Florida attorneys who provide legal representation to homeowners’ associations (HOA), while also representing those affected by a foreclosure proceeding, the issue of homeowners’ associations foreclosing on homes over unpaid fees can be a challenging one that affects more people than you realize; especially since some 30 to 40 percent of the country lives in homeowners’ association communities. Many people and possibly even some homeowners’ association do not realize that in Florida and a number of other states, if you fail to pay assessments and dues, the association can obtain a lien on your property that leads to foreclosure. In fact, most people think that only their mortgage lender can seize their property.

However, the law also dictates that the association cannot file this lien unless it first provides the homeowner with 45 days to pay what they owe via a written demand. Still, in its assessments lien, it can not only include unpaid assessments in the lien, but also late charges, interest, and attorneys’ fees. Defaulting on assessments means that the association can foreclose by filing a lawsuit, even if you are current on your mortgage payments. This is why – if you are involved in a disagreement with your association – failing to pay fees is not the way to address the disagreement; rather, speaking with an attorney to discuss your options makes more sense; especially since it can be difficult to even figure out how much is actually owed to the HOA.

Seizing A Home Over $250 In Unpaid HOA Fees?

There is no question that a number of homeowners do not completely understand the ability for associations to foreclose on their home after they have purchased it, and are shocked when they find themselves in the position of losing a home that they’ve paid hundreds of thousands of dollars for over several hundred dollars in unpaid homeowners’ association fees. As a result, a number of associations try to ensure that they try to collect several times before resorting to foreclosure.

Exploiting The Tragedy

Still, the foreclosure issue can leave homeowners in a serious bind, especially when it comes to companies that may be tempted to purchasing homes under foreclosure for a small amount of money and seek to sell the homes back to their owners for much higher prices. It can also leave homeowners in a situation where they essentially still owe a mortgage payment for a home they no longer own.

Fighting Back

Some Florida associations have found that it is a waste of time to foreclosure on a home if it has a superior mortgage because even if the association ends up with the title, it is possible for the mortgagee to take the property from the association. In addition, it is important for all parties to note that the statute of limitations to pursue unpaid assessments is five years.

Contact Our Florida HOA & Foreclosure Attorneys If You Have Any Questions

If you are a Florida homeowners’ association with a question about unpaid dues and foreclosure, or a homeowner potentially facing foreclosure, do not hesitate to reach out to our experienced Tampa homeowners’ association attorneys at HD Law Partners today to find out more about your rights and options.

Resource:

https://marketwatch.com/story/condo-fee-foreclosures-become-headache-for-homeowners-2015-01-09

Posted in Homeowners Association, Landlord Tenant | No Comments »

As commercial landlord and tenant attorneys who help ensure that landlords have enforceable commercial leases and experienced counsel to help with any disputes, one of the issues that we frequently assist landlords with here in Florida are common area maintenance, or “CAM” charges. These charges have a significant impact on the property’s net operating income and how much tenants pay. However, disputes can arise with tenants when it comes to CAM charges because unique situations may require costs to be calculated in a way that is different than what is spelled out in the current lease terms. As a result, it is important for commercial landlords to have a thorough understanding of what CAM charges are/include and how to properly account for them in the lease, with the assistance of an experienced attorney.

Below, we discuss what CAM charges are, what’s included in them, the types of commercial real estate leases that do and do not include them, and how they are calculated:

What They Are/Include

While CAM charges are very generally maintenance costs related to managing and maintaining commercial property, there really is no one definition as to what exactly is included in them because they vary based on the market and the property. They are designed to provide property owners with some protection from increasing costs so that the property’s return on investment isn’t significantly impacted. These charges typically include the cost of cleaning, maintaining, and repairing common areas of leased property, although the exact charges depend upon the exact lease that the landlord and tenant agree on; they can be limited to a few items, or they can be broader, covering expenses related to:

• Bathrooms
• Elevators
• Hallways
• Lawn care & landscaping
• Parking lots
• Sidewalks
• Snow removal
• Utilities
• Needs that are unique to the property, such as security, building repairs, property management fees, administrative costs, permit expenses, property taxes, property insurance, and anything else landlord may want to include.

While these costs can sometimes be scary to the tenant, they can also be beneficial in that landlords will sometimes put off maintenance costs if they have to bear the cost themselves.

Where They Appear In Commercial Lease Terms

Not all properties include these charges. They tend to be included in industrial, retail, and warehouse spaces; while office spaces tend to include them in the rent. Specifically, the following types of commercial real estate leases tend to involve some type of CAM charges:

• Triple net leases: The tenant tends to pay CAM charges and takes on all of the responsibilities in terms of paying their share of property taxes, insurance, and common area maintenance. The only responsibility landlord has is covering the capital expenditures, which means repairs to the property; although expenses can vary depending on what landlord and tenant have agreed on during lease negotiations. These types of leases tend to apply to retail properties, such as shopping centers and restaurants
• Net leases: The landlord pays for the common area maintenance while the tenant pays for property insurance and taxes. This type of lease is less common but it is attractive to some tenants because it minimizes risk. It is also sometimes seen where multiple properties share common area expenses, however, the base rent is higher
• Gross leases: Very common in office buildings; where the landlord covers common area maintenance, property taxes, and insurance, and tenant pays flat rent rate without fluctuation based on insurance, maintenance costs or property taxes. The landlord will even sometimes cover utilities.

How They Are Calculated

It is important for property owners to work with attorneys so as to ensure that the leases are structured so as to maximize the return on investment. This typically involves passing CAM charges onto the tenant. However, how CAM charges are calculated also matters. The most common way they are calculated is based on square footage of the property, where each tenant pays their share of the property’s expenses based on the space occupied by dividing the total cost of maintenance by the square footage of the property to get cost per square foot. However other options are:

• Load factor: whatever percentage of the building is used as a common area is added to the square footage of the space rented, which then gives you rentable square footage to base rent on
• Fixed: property owners set a flat fee for common area maintenance and work in small annual increases to cover inflation. You see some shopping malls doing this
• Capped charges: some tenants may attempt to negotiate a cap on how much they will be required to pay towards common area maintenance

Contact Our Florida Landlord & Tenant Law Attorneys

Commercial landlord and tenant law can be extremely complicated, especially when disputes arise. As a result, building in every precaution to your lease with your tenant is the best way to protect yourself as a commercial landlord.

We can help you ensure that you have the best enforceable commercial lease. Contact our Tampa commercial landlord and tenant lawyers at HD Law Partners to learn more about our services today.

Resource:

Posted in Homeowners Association, Landlord Tenant | No Comments »

An article recently featured in TIME magazine highlights why it is so important for couples to address certain issues in pre-and post-nuptial agreements, including pet custody issues, in order to avoid expensive, lengthy court battles later on. The article highlights just how important pets are becoming to us and how one individual spent close to $40,000 in legal fees fighting for custody over dogs in their divorce because the custody issue was not addressed in a prenuptial agreement.

Pets are becoming just as important as children for more and more people each day. In fact, according to a survey by the American Veterinary Medical Association, 80 percent of pet owners view their pets as family members. More and more pets are also adopted rather than purchased and described as mixed breeds, indicating that their value comes from something other than what they cost. In fact, of the more than 1,000 millennial pet owners surveyed in 2018, almost 70 percent indicated they would actually take work leave to care for a new pet if possible, and 60 percent of men and 80 percent of women considered their pets to be their “fur babies.”

Pets as Property: Where The Court Battles Originate

Because in most states pets are still considered property, where there is a custody dispute, judges tend to assign responsibility based on who adopted or purchased a pet, or, if this cannot be ascertained, whoever paid for the pet’s care over the years. However, some couples decide that if two pets have bonded during the relationship, they should be kept together and, as a result, one person will have primary custody and the other one will have visitation rights, etc. Still, if this is not recorded in a prenuptial agreement, it is subject to one person suddenly deciding to cancel the arrangement, which then can result in a court battle. This is becoming more and more common, especially as more and more people consider pets to be like children and will therefore sometimes come to feel that the other individual is not properly taken care of the pets. As a result, pet custody disputes after divorce are becoming more and more common, and they can become complicated because courts and divorce laws fail to recognize that pets are not equivalent to other property items.

While some states are working on making progress to change the law on the issue, unfortunately, Florida does not yet have laws that treat pets as family members. With courts ill-prepared to adjudicate these battles, and unarmed with the right laws, these disputes can drag on for years and cost plenty as a result; that is, unless a pre- or postnuptial agreement specifically addresses who will have custody/visitation/etc. when it comes to the pet(s) in the instance of divorce.

The Key Is Addressing This Early On: Contact Our Florida Prenuptial Agreement Attorneys

There is no question that pets are more than property. They have awareness, emotions, sentience, and inherent value that distinguishes them from property. However, the law drags behind the science and the reality of our lives in this regard, and until divorce laws and the courts are more prepared to address pet issues in every divorce, it is essential that pet owners come to an agreement either before they are married (prenuptial) or after (postnuptial) in order to avoid expensive court battles later on.

Our Tampa family attorneys are prepared to help you avoid a volatile situation when it comes to family court matters, including assisting you in planning for everything that is important to you in a pre- and/or postnuptial agreement. Contact us today at HD Law Partners to find out more about our services.

Resource:

time.com/5763775/pet-custody-divorce-laws-dogs/

Posted in Divorce, tampa family attorney | No Comments »

An important landlord and tenant case decided in December could have an effect on landlords around the country. The court specifically held that landlords can be held liable under the Fair Housing Act if they fail to reasonably address tenant race discrimination from other tenants. This is the first time the law has been expanded beyond direct action by landlords and allowed for landlords to be held liable for actions committed by third parties.

The case involved a tenant who allegedly experienced egregious discriminatory harassment from his next-door neighbor, who remained a tenant in the building even after he was arrested by police for aggravated harassment and a protective order was entered against him.

What The Fair Housing Act Says

The Fair Housing Act prohibits discrimination “by direct providers of housing,” such as landlords and real estate companies, as well as those in connection with the housing, such as banks and lending institutions, if/where discriminatory practices make housing unavailable to someone due to:

• Disability;
• Familial status;
• National origin;
• Race/color;
• Religion; or
• Sex.

The Act has traditionally been utilized by the Department of Justice in cases involving discrimination in home improvement or mortgage loans, or where a group of individuals has had their rights denied and it raises issues of general concern. In addition, individuals who feel that they have been victims of an illegal housing practice can file a complaint with the Department of Housing and Urban Development or in court.

Can Commercial Landlords Now Be Sued for Failing to Kick Out Commercial Tenants That Harass Nearby Commercial Tenants?

To what extent this could be applied to commercial landlords who, for example, are faced with the prospect of whether they should rent to someone who has a protection order entered against them by a party near the space for harassment reasons unconnected to race discrimination remains to be determined. The circumstances of the case involved the Fair Housing Act’s specific prohibition against racial discrimination in the rental of a dwelling. However, the majority did liken landlords taking action for littering on the premises with the need to take action to address tenant-on-tenant harassment complaints, which implies a broad reading of the statute.

Still, with existing privacy laws in place, many wonder what the landlord could have done, exactly, to halt the offending behavior. In addition, a number of landlords might be concerned that the individual allegedly engaging in harassment could sue them for discrimination and violating their rights for evicting them, especially if the concerning behavior that is the subject of complaints from neighbors  only involves speech.

If You Have Questions, Get in Touch with Our Florida Landlord/Tenant Attorneys

If you have a question about a landlord/tenant legal issue, contact our experienced Tampa commercial landlord and tenant attorneys at HD Law Partners. Consulting an experienced attorney when a dispute arises can help prevent litigation like this.

Resource:

courthousenews.com/harassed-tenant-gets-ok-to-hold-landlord-liable/

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As attorneys who help countless clients prepare for and get through divorce here in Florida, we also frequently counsel our clients on general suggestions for getting through their first holiday after divorce. A number of parents are especially concerned about where to draw the line between preserving old traditions while making new ones with their children at the same time.

Experts of all types of backgrounds have offered their advice when it comes to coping after divorce, especially during your first holiday. It is a predominant theme amongst each of these experts that parents consulting their children on what their preferences in terms of new versus old traditions tends to work well for getting through this time and finding a new, happy balance. Below, we discuss some additional tips from experts on how to make the most of your holiday after divorce:

Focusing On Your Children & Building New Traditions

Many people find that focusing on their children is very helpful at this time. By focusing on making their holidays bright and cheerful, this may just come back to brighten your holiday as well. By discussing what they’d like to do this holiday season, many people find that engaging in new traditions with their children is very helpful; for example, getting and decorating a fake tree together instead of going out and cutting down a tree. Also keep in mind that new traditions don’t just involve your children; they can involve cooking new dishes for the holiday, visiting friends and family you have not seen in some time, etc.

People & Activities That Make You Happy

Indeed, surrounding oneself with people and/or activities that make one happy is very important during the holidays can be especially rewarding. Do not be afraid to be proactive and plan ahead when it comes to social events. Regardless of what you consider to be a rewarding activity, prioritize yourself and self-care during this time.

Setting Your Own Boundaries

While engaging in discussions with your family and friends about what everyone wants to do is important, do not be afraid to set your own boundaries as well. This includes any gatherings you are too uncomfortable with, extended family you do and do not want to see, what traditions you would personally like to participate in, etc.

Valuable Ways to Spend Your Time

Many find that, if they now split their children’s time with their ex, that they have more time on their hands during the season. While this may at first be daunting, it can also provide more time for relaxation and less hectic holiday activities. In addition, some people find that starting to volunteer with an organization and helping those in need during the holidays can be especially rewarding.

Work with Experienced Florida Divorce Attorneys

There is no question that giving yourself time and space when it comes to your divorce and getting through the holidays is helpful. If you have any questions about obtaining a divorce here in Florida, contact our compassionate, professional Tampa family attorneys at HD Law Partners today to find out how we can help.

Resource:

meetmindful.com/10-tips-for-surviving-the-holidays-after-a-divorce/

Posted in Divorce | No Comments »

As attorneys who regularly assist clients here in Florida with trademark disputes, we also help to counsel clients on registering a business trademark. A business’ trademark is essential in identifying its “brand” and protecting its goods and services, both in terms of another company using that brand and all of the various legal implications that can accompany this issue. A brand may also be associated with very valuable intellectual property that needs to be protected. Registering your trademark provides you with exclusive legal rights and protects others from copying it, and once your trademark is registered, it does not expire. Having a trademark attorney assist you is crucial in ensuring that this is done correctly and in accordance with the law.

What Is a Trademark?

As defined by the United States Patent and Trademark Office, trademarks are words, symbols, phrases, designs, or all of the above that identifies the source and distinguishes it from others. Note, however, that the name of a business is not necessarily the trademark, and may not be registerable. Trademarks are often used to refer to both goods and services even though, technically, a service mark protects services.

Timing & Process

Timing is also very important when it comes to trademarks. They should be registered as soon as possible, and the process can take between six months to a year or more, however, businesses should not invest a lot of time and money into a brand until they have consulted an attorney who can assist them with researching what is already registered. Your attorney can assist you in choosing a name that is unique enough to avoid being imitated but also provides the consumer with enough of a descriptor to know what it is exactly that you are selling.

The Application Process

Once you have your trademark, you and your attorney file an application with the United States Patent and Trademark Office. In order to do so, you will need to gather important, relevant business information. Note that different components are registered under different marks, for example, logos as design marks, slogans as word marks, etc.  Therefore, if you are filing for the protection of your business, slogan, logo, etc., you will have three separate applications—one design and two word mark applications.

Each type of application has its benefits and the initial review can take between one and three months. These include:

• Teas Plus: Requires the most information;
• Teas Reduced Fee: Does not require as much information and allows you to customize your descriptions;
• Teas Regular: Requires the least amount of information and is the most expensive.

Contact Our Florida Business & Commercial Litigation Attorneys with Any Questions

If you have any questions about trademarks, contact our Sarasota commercial litigation attorneys at HD Law Partners today to find out how we can help.

Resource:

businessnewsdaily.com/15358-register-business-trademark.html

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In December, McDonald’s Corp. won a major battle in a multiyear legal battle with labor unions concerning alleged corporate labor violations at its many franchise restaurants. The ruling absolves the company of any direct responsibility as a joint employer when it comes to contracted labor, indicating that, without strong evidence that companies directly control the workers, they cannot be held liable for any labor violations that the franchise is involved in. According to the agency judge on record, this was the “largest case ever adjudicated in the history of the National Labor Relations Board.”

The Case & Differing Opinions

Labor unions started filing charges related to unfair labor practices against the company in 2012, claiming that it retaliated against employees for participating in union activities, including protests and strikes. Their argument in the case was that the national company shares control over workers in the franchise restaurants, and should therefore share in the liability.

McDonald’s locations are reportedly 90 percent operated by franchisees. However, the company has reported that it cannot mandate that these franchise operators follow the company’s policies when it comes to issues such as sensitivity training or sexual harassment; that, instead, they are responsible for their own employees.

The decision is being hailed as an important milestone for the franchise sector in general. Still, the union plaintiffs have indicated that they plan to appeal. At first, the current settlement amount was rejected by the Administrative Law Judge Esposito as inadequate. Specifically, Judge Esposito indicated that any proposal would have to mandate that McDonald’s ensured that its franchisees followed through on the terms of the settlement. However, upon McDonald’s appeal to the labor board, the board ruling overturned that decision and approved it, finding that Judge Esposito had held the proposed settlement to overly-strict standards. Had the case been further litigated, it likely would have affected the franchise business model in general by placing parent corporations on the hook for labor law violations committed by their franchisees.

Will The Board Now Go Further?

According to some reports, the board is expected to go further, and based a proposed rule on this decision in defining what a joint employer is. Under the standard established by the previous administration, a parent company can be considered a joint employer with a franchisee if they exercise indirect control over workers employed by the franchisee. The board is now expected to narrow that definition to only those parent companies that have significant, direct control over employees of the franchise.

Contact Our Florida Business & Corporate Law Attorneys Today

At HD Law Partners, our Tampa business and corporate attorneys possess the legal knowledge and experience necessary to prevent litigation when it comes to day to day operations for businesses, including labor relations. Contact us today to find out more.

Resource:

insurancejournal.com/news/national/2019/12/13/551147.htm

nytimes.com/2019/12/12/business/economy/mcdonalds-labor-board-settlement.html

cnn.com/2019/12/13/business/nlrb-mcdonalds-joint-employer/index.html

Posted in Business Corporate | No Comments »

As noted recently by the president of the Florida Association of Public Insurance Adjusters in the Sun Sentinel, the level of frustration currently felt by Florida policyholders is greater today than ever due to the number of hurricane insurance claims that are either egregiously delayed or denied. Indeed, this is frequently found to be in violation of the insurance company’s contract with its client, who is essentially paying for a ‘promise’ each month—a promise that the company will pay out, timely, for a loss in exchange for the client paying their insurance premium each month.

However, insurance companies have been doing such a poor job when it comes to their basic responsibilities that a recent statement made by the state’s top insurance regulator regarding insurance companies paying claims within 90 days, as required by law, has a number of parties concerned, especially the Florida Association of Public Insurance Adjusters. In reality, according to data provided by the actual insurers, more than 100,000 Floridians are still waiting for claims from Hurricane Irma, Matthew, and Michael to be paid.

The Lingering Damage of Hurricane Michael

One year after Hurricane Michael wreaked havoc on Florida’s Panhandle, with businesses and homes pummeled into piles of rubble, more than $7 billion in insurance losses have been reported to the state Office of Insurance Regulation and 150,000 insurance claims filed; just due to Hurricane Michael alone. Most of the claims still open come from Bay County, which was hardest hit by Michael, and almost 20 percent of all Michael-related insurance claims still remain open there.

Under the law here in Florida, insurance companies are supposed to pay claims within 90 days of the claim being made, however, the law also provides them with months to provide an estimate. However, things have gotten so bad to date that the Florida Insurance Regulation Commissioner had to remind insurance companies of the thousands of claims that were still open, and that they not only needed to comply with the law, but to “facilitate restoration and recovery in impacted communities” here.

Why You Should Contact an Experienced Florida Insurance Claim Attorney

When policyholders face a low-balled claim payment, insurance claim attorneys are the professionals who help. This is especially important given that Florida law requires that public insurance adjusters obtain approval from their clients prior to settling any claims, and you want to make sure that your claim settlement isn’t still being low-balled by the insurance company. It is also important because insurance companies are working hard to eliminate existing laws that dictate that they must pay your attorney’s fees if you have to sue them to get paid what you are owed, even though that is your right.

The Fort Myers hurricane insurance attorneys at HD Law Partners are dedicated to making sure that big insurance companies keep their promises of dealing in good faith with their insured clients. Contact us today to find out more about our services.

Resource:

sun-sentinel.com/opinion/commentary/fl-op-com-drillich-insurance-policyholders-storms-20191027-ns6gvzv63fcprh275qpzq3c4oe-story.html

floir.com/siteDocuments/OIR-19-04M.pdf

wfla.com/news/florida/more-than-20000-insurance-claims-linger-one-year-after-hurricane-michael/

Posted in Insurance Litigation | No Comments »

Most business owners choose to initially choose to form as a sole proprietorship because it costs less and there is less bureaucracy. However, many also switch to either a C corporation or a limited liability company (LLC) at some point in order to benefit from additional protections.

While we have previously discussed the advantages of having an S corporation, we have not specifically discussed why small businesses may want to initially form as an S corporation, which provides a number of unique benefits, especially to startup companies. Below we discuss the characteristics and benefits of each classification:

C Corporations

C corporations provide the most protection from liability for both shareholders and business owners because they allow the businesses to exist as separate entities. Because the C corporation is a legally separate entity, any legal repercussions have no bearing on the individual owner(s)’ personal assets. It also offers a significant amount of flexibility when it comes to buying and selling stock shares, offering employees stock options, and allowing for an unlimited number of shareholders; amongst other benefits. While dividends are taxable as income, business expenses, employee benefits, and retirement plan expenses are tax deductible to the company. C corporations can be costly due to a number of filing fees that must be paid, and the steps to form a C corporation can also be elaborate. Specifically, the following is required:

• Corporate bylaws;
• Articles of Incorporation (filed with the state);
• Employee Identification Numbers or Tax ID Numbers; and
• A Board of Directors, which the owners regularly meet with and where minutes are kept of meetings.

Limited Liability Companies

The limited liability company (LLC) is another popular business structure. An LLC also provides the owner(s) with protection from liability and is responsible for its own finances. It also involves very little paperwork to set up, a Board of Directors is not required, the owners make the decisions (after filing the Articles of Organization with the state), and an Employee Identification Number is still required.

Perhaps most importantly, when it comes to an LLC, there are choices as to how the owners want to be taxed. The LLC is what is known as a pass-through entity, which is similar to a sole proprietorship or partnership. Members can decide to have the company taxed as a C corporation or they can have profits and losses passed through to them and claimed on their personal tax returns.

S Corporations

Another option is the S corporation. S corporations retain the same liability protection of the C corporation and LLC, however, they are not taxed at the corporate level because they are subject to pass-through taxation. S corporations also provide income-splitting benefits for the owner(s): Owner(s) can take a reduced salary and taking the remainder in the form of dividends, which are not subject to self-employment tax, only income tax. That being said, S Corporation status is not necessarily beneficial to companies with high earnings, and there are limits as to the number of shareholders they can have. However, when it comes to small businesses and startups, losses can be written off on clients’ personal tax returns, which can provide significant benefits.

In order to qualify for S corporate status,

• The business has to be an LLC or United States corporation;
• Every shareholder must consent to it being an S corporation;
• Every shareholder must be a citizen or permanent resident alien;
• The company is limited to 100 shareholders or less;
• The company can only have one class of stock; and
• Shareholders must be certain qualified trusts, estates, or individuals.

Contact Our Florida Business & Corporate Law Attorneys to Find Out More

In general, it is usually recommended that businesses start as LLC is because the structure is so simple and flexible. As the company grows, shifting to S corporation status usually makes more sense. It is typically easiest to simply elect to file your LLC is an S corporation, while noting that you can always refer back to an LLC.

For more information on business and corporate law—including business formation—contact our experienced Tampa business & corporate attorneys at HD Law Partners today.

Resource:

https://cpapracticeadvisor.com/small-business/article/21106764/why-small-businesses-may-want-to-consider-electing-s-corp-status

Posted in Business Corporate | No Comments »