Corporations and Their Use and Implementation for Small Companies

Incorporation Has Many Benefits
Many individual entrepreneurs choose to incorporate because it affords them protection from lawsuits and creditors. The corporate entity provides a legal barrier against incurring personal liabilities arising from the day-to-day operation of your business. Most residents of Florida who set up a corporation choose a Florida corporation as opposed to other states. Therefore, the incorporator will be subject to Florida's laws governing reporting requirements.

Each year, by May 1st, every Florida corporation must file an annual report and pay the state of Florida a $150.00 fee for renewal of their right to be an active corporation. Failure to timely file this report results in a late charge of $400.00 and temporary suspension of the right to corporate status. In addition, all Florida chartered corporations must have at least one annual meeting of its directors and shareholders. The time and place of any such meetings is spelled out in the bylaws of each corporation.

If your corporation becomes the target of lawsuits or creditor actions, one of the plaintiff attorney's favorite tactics is to attempt to pierce the "corporate veil". They will try to prove that the corporate entity is a sham and that it is not being run as a corporation. They will ask you to produce your corporate records including the directors and shareholders meetings' minutes. Should you fail to maintain such records this fact will be brought to the court's attention as one of the factors "proving" that you are not operating the business as a corporation -rather as a personal business. Should the court agree with that contention, it may permit the lawsuit to proceed against the shareholders personally.

Protect Your Corporate Status
There are a number of simple, easy steps you can take to maintain your corporate status and ensure that you have the protection you need:

1. File your annual reports each year with the Florida Department of State.

2. Prepare special directors' meeting minutes for opening new bank accounts; purchases over $2,500.00; vehicle leases or purchases; election of new officers; business financing; lease of office space; bonuses declared for officers; and other major events.

3. Prepare special shareholders' meeting minutes for sales of corporate assets; election of new directors; mergers and/or sale of the business; and other major events requiring approval.

4. Prepare annual directors' meeting minutes and document the election of officers; ratify all actions taken by corporate officers since the date of the last meeting; ratify salaries paid to all officers during the last fiscal year; and note any discussions or decisions of a material nature.

5. Prepare annual shareholders' meeting minutes and document the election of directors; review and accept a report on the financial condition of the company; and ratify all actions taken by the board of directors since the last meeting.

Our Law Firm and Your Corporation



We have developed a computer system which permits us to prepare your annual reports and meetings' minutes quickly and at a low cost to you. It eliminates the need for you to "remember" to update your corporate records - we do it for you! Give us a call, today, and let us show you how we can help.