Business Law 101 / How to Form a Corporation or LLC

By Albert L Kelley, Esq.

Whether you decide to go with a corporation or Limited Liability Company, the formation process is very similar.  The first step is to file Articles of Incorporation (corporation) or Articles of Organization (LLC). There are a couple of options here.  You can draft your own documents and mail them to the Department of State. This process can take a couple of weeks unless you hire a company to walk the papers through the Department.  You can also file Articles online through the Department of State’s website- www.sunbiz.org.  The online system uses a very basic format, but it can result in a corporation being filed in as little as 24-48 hours. The basic information you must include are the name of the company, the physical and mailing addresses, the name and address of the registered agent, and in the case of a corporation, the names of the directors or officers.  For Limited Liability Companies, you must list a manager, a member, or an authorized person. By using an authorized person rather than a Member or Manager, the control of the LLC can remain anonymous. One of the persons named in the Articles must sign them.

The name used by the company is important.  To prevent confusion of business identity, only one business entity may use a corporate name.  In other words, if I create TREWQ, LLC, no one else may use that name, regardless of whether they form a corporation or LLC.  However, if they make a slight modification, it is allowed. So TREWQ of Key West, Inc. would be permitted. Because of this rule, it is important to check the business name before registering it.  To check the name, there are three steps: First on www.sunbiz.org go to “Search Records” and then “Name”.  This will let you search every corporate and LLC name registered.  If the name is listed, look at the status. If the status is “Active” or “Inact/UA” the name is not available (UA means the company has been dissolved, but the name is reserved for one year from the date of dissolution). If the status is “Inact” the name is available. After clearing the name there, stay in www.sunbiz.org and go to “Search records” and then “Trademark Name”.  While nobody may have registered your proposed business name as a company name, they may have registered it as a trademark.  Your use then for a company name might be deemed an infringement. Similarly, once you have cleared the name there, go to www.uspto.gov and search “Trademarks” and then “Search TESS” to see if your name has been registered as a federal trademark. Once the name is clear, you can file your Articles.

There is often confusion over the purpose of the Registered Agent and Registered Address of a company.  Many think the Registered Agent is an officer of the company or a person responsible for running the company, and the Registered Address is the home office.   In actuality, the Registered Agent must be a person or business located in Florida, that is available during regular business hours at a specified location (the Registered Address) for the purpose of being served if the company gets sued.  They may be a shareholder or member of the company, but do not have to be. As Registered Agent, they have no control over the activities of the company, although they may have authority by virtue of also being an officer or manager. The Registered Agent must sign the Articles of Incorporation or Articles of Organization, certifying that they have read the Registered Agent statute and agree to be bound by its terms.

Al Kelley is a Florida business law attorney located in Key West and previously taught business law, personnel law and labor law at St. Leo University.  He is also the author of “Basics of Business Law” “Basics of Florida’s Small Claims Court” and “Basics of Florida’s Landlord-Tenant Law” (Absolutely Amazing e-Books). This article is being offered as a public service and is not intended to provide specific legal advice.  If you have any questions about legal issues, you should confer with a licensed Florida attorney.

 

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