Corporate Law in Florida
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What is a Corporation?
A corporation is a legal entity formed to conduct business. Corporations can be either a close corporation, where only a few people own the corporation and its stock is not publicly traded, or a public corporation, whose stock is traded on the stock exchange.
Whether your corporation is large or small, corporations are subject to substantial regulation. State and federal laws regulate nearly every aspect of a corporation’s internal administrative processes. Actions such as issuing stock, calling board meetings, appointing or firing officers, and communicating with shareholders are all governed by various state and federal statutes. Failure to follow these regulations could expose the corporation and even its owners and officers to liability and fines. In addition, these rules must be adhered to strictly in order to maintain and enjoy the substantial benefits corporations receive. The rules requiring specific actions, course of performance, and corporate filings are known as “corporate formalities.”
Corporate formalities include corporate requirements of correct and proper creation, articles of incorporation, bylaws, annual meetings with their shareholders and strict rules on shareholder notice of these meetings, and regular meetings of the board of directors.
Many corporations choose to have an attorney present at all of these meetings to ensure that the corporation complies with all Florida state and federal requirements.
In addition to these unique corporate law issues, corporations also face the same challenges that other businesses face. These issues can include employment law issues, contract disputes, product liability, intellectual property issues, mergers and acquisitions, corporate financing issues, shareholder or management complaints, and a wide variety of other legal issues.
Neglecting of corporate formalities may open the door to “Piercing the Corporate Veil.” Piercing the corporate veil is a judicial act of imposing personal liability on the owners, shareholders, or officers of a corporation for the corporation’s wrongful acts.
Corporations do not have to be incorporated in their home state. Many businesses decide to incorporate in the State of Delaware, because Delaware provides many tax benefits and low incorporation costs that other states do not. Corporations incorporated out of state, however must still register their corporations in any state where they conduct business. If you are considering incorporating out of state, speak with an attorney to discuss the pros and cons.
Does all this sound a bit daunting?
Don’t worry. Our South Florida based Corporate Attorneys serve clients in Palm Beach County, Broward County, Miami Dade County, and throughout Florida.
We can help.
If you need assistance completing your required annual corporate formalities, would like to retain corporate counsel, or simply have questions on your corporation or incorporating another, please contact us.
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