Forming Your Florida Entity Using
"Multi-State" Companies or
"Doing It Yourself"

Frequently we receive calls from people who have filed with the Secretary of State themselves, or they've retained one of those "we file everywhere companies", who rarely include filing fees in the pricing, making them more expensive in the end. Inevitably there are problems in the way the paperwork was originally filed - the filing didn't take into consideration the individual's particular business situation, or the resident agent service was not up to par, or something was left undone, or improperly done, or checks submitted to the wrong payee, - various reasons.

Even though it may appear self serving, we think it is important to point out that, while filling out the Secretary of States paperwork meets the the minimum statutory and legal requirements for filing an entity, most people don't realize that there are additional statutory provisions considered by most legal and financial authorities to be both appropriate and necessary to protect the entity, its officers, directors and shareholders. Remember, the "One Page Form" is charged with giving you the basic rules - not with protecting you. We find that almost everyone interested in the "Do It Yourself (DIY)" avenue have not thoroughly read and understood Chapters(s) 78-80 Corporations, 86 LLC, 88 Limited Partnerships, and 87 Limited Liability Partnerships, along with their notes which reference Case Law. Thus they have not taken advantage of the additional provisions available to them, and consequently have not protected the officers, shareholders and directors as well as they could have.

A few of the provisions that are often neglected by the "self-filer", but which can be significant if there is an attack on the entity by the IRS, a State Agency, the Shareholders, or 3rd Parties that your entity does business with and/or if there is internal disagreement among shareholders, officers, and/or directors:

• Preemptive Share Holder Rights
• Assessment: future assessment of Shareholders
• Par Value vs. No Par value are you sure of what you really want and what the consequences are?
• Indemnification of Officers and Directors

In todays litigious society there are more lawsuits in the U.S. than in the whole rest of the world combined. It is wise to be prepared. On the other hand, there is one group of people who are rarely sued - people who don't have anything to lose. It is known as being judgement proof. Plaintiffs rarely go to the trouble and expense of filing a suit against someone who can't pay if the action is successful. So my advice to you is, if you can't afford to organize a business entity correctly, it may be better not to do anything at all! If this is you, relax, you've got nothing to worry about!

If you still need a business entity, your primary concern should be the competence of whoever organizes your company, or who knows, your next business may be manufacturing license plates...   Jesting aside, the few dollars you spend now to do things correctly will quickly be forgotten, but the benefits you recieve will be with you for the life of your company.