Starting a business in Florida is an exciting venture, but one of the first—and most important—decisions you’ll face is choosing the right legal structure. For many entrepreneurs, this comes down to two main options: forming a Limited Liability Company (LLC) or a Corporation. While both offer liability protection and potential tax benefits, they differ in critical ways that can affect your day-to-day operations, future growth, and how much you pay in taxes.

In this blog, we’ll break down the key differences between LLCs and Corporations specifically within the context of doing business in Florida. We’ll explore how each structure impacts liability, taxation, management flexibility, startup and maintenance costs, and more. Whether you’re launching a tech startup in Miami or opening a boutique in Tampa, understanding these distinctions can help you make the best choice for your business’s future.

Liability Protection and Legal Structure

Both LLCs and Corporations offer strong limited liability protection, which means that your personal assets—like your home, car, or personal bank accounts—are typically shielded from business debts or lawsuits. This is a critical benefit of forming either type of entity compared to operating as a sole proprietorship or general partnership.

However, the legal structure of each is quite different:

• LLC (Limited Liability Company): An LLC is a flexible, hybrid structure that combines the liability protection of a corporation with the tax benefits and operational simplicity of a partnership. It’s relatively easy to form and maintain, and owners (called members) can choose how they want to manage and tax the business.
• Corporation: A corporation is a more rigid legal entity with a formal structure that includes shareholders, directors, and officers. Corporations must follow more regulatory and recordkeeping requirements, including annual meetings and detailed corporate minutes. That said, this structure can be advantageous for businesses planning to raise capital, issue stock, or eventually go public.
  

In short, if you’re looking for simplicity and flexibility, an LLC may be more appealing. But if you have long-term growth plans that involve investors or complex ownership structures, a Corporation could be the better fit.

Tax Differences

Taxes are often one of the biggest deciding factors when choosing between an LLC and a Corporation. Florida has a business-friendly tax environment, but the way your business is taxed will still vary significantly based on the structure you choose.

• LLC Taxes: By default, a Florida LLC is treated as a pass-through entity. This means the business itself doesn’t pay income taxes—instead, profits and losses “pass through” to the owners’ personal tax returns. This avoids the double taxation that corporations can face. LLCs can also elect to be taxed as an S Corporation or even a C Corporation, depending on what’s most beneficial for the business.
• Corporation Taxes: A standard Corporation (or C Corporation) is taxed as a separate entity. This means the business pays Florida corporate income tax (currently 5.5%), and then shareholders may also pay taxes on dividends—this is what’s referred to as double taxation. However, a Corporation can also elect to be taxed as an S Corporation, which functions similarly to an LLC in that it passes income through to shareholders, avoiding corporate tax. Notably, Florida recognizes S Corporation status for tax purposes, but your business must still meet IRS eligibility requirements to elect this status.

Key Florida-specific tax notes:

• Florida does not impose a personal income tax, which benefits LLC members and S Corporation shareholders.
• Corporations must file a Florida corporate income/franchise tax return each year, while LLCs may have simpler filing obligations—especially if treated as sole proprietorships or partnerships for tax purposes.

Choosing the right tax structure can have a big impact on your bottom line, so it’s wise to consult a tax professional who understands Florida business law.

Management and Operational Differences

Another key consideration when choosing between an LLC and a Corporation is how each is managed on a day-to-day basis. The structure and flexibility of management can affect everything from how decisions are made to how much paperwork you’ll need to maintain.

• LLC Management: LLCs offer a lot of flexibility. They can be member-managed, where all owners participate in daily operations, or manager-managed, where designated individuals (who may or may not be members) handle the business’s affairs. There’s no requirement for a formal board of directors or officer roles, making this structure ideal for smaller businesses or partnerships that prefer a less rigid hierarchy.
• Corporation Management: Corporations follow a formal and hierarchical structure. They must have a board of directors that oversees major decisions and officers (such as a CEO, CFO, etc.) who manage day-to-day operations. Shareholders own the company but don’t necessarily run it unless they also serve as directors or officers. This structure can provide stability and credibility, particularly for businesses seeking outside investment or planning for rapid growth.

Additionally, corporations are required to hold annual meetings, keep detailed meeting minutes, and file certain records—tasks that are not legally required for LLCs in Florida, though maintaining good records is still considered a best practice for any business.

If you want a streamlined management structure with fewer formalities, an LLC might be a better fit. If you’re aiming for scalability, external investment, or eventual public trading, the corporate model offers a more established framework.

Startup and Maintenance Costs

Understanding the costs involved in starting and maintaining your business structure is crucial, especially for new business owners trying to manage tight budgets. While Florida is relatively affordable compared to many other states, there are still notable differences between forming an LLC and a Corporation.

• LLC Costs in Florida:
  
  • Filing Fee: To form an LLC in Florida, you’ll pay a state filing fee of $125 (as of 2025).
  • Annual Report: Each year, LLCs must file an Annual Report with the Florida Division of Corporations, which currently costs $138.75.
  • Other Costs: Optional expenses include drafting an operating agreement, obtaining a business license, and hiring a registered agent.
    
• Corporation Costs in Florida:
  
  • Filing Fee: The filing fee to form a Corporation is $70, plus a mandatory $35 registered agent designation fee, totaling $105.
  • Annual Report: Corporations must also file an Annual Report, but the fee is slightly higher—$150 per year.
  • Additional Requirements: Corporations may incur more costs due to formalities such as creating bylaws, issuing stock certificates, holding meetings, and keeping detailed records.

While the initial cost difference is relatively minor, LLCs tend to have lower ongoing administrative costs and fewer regulatory burdens, making them a more cost-effective option for many small to mid-sized businesses.

Fundraising and Investor Appeal

If you plan to raise capital—either now or in the future—your choice of business structure can have a significant impact on your ability to attract investors.

• LLC Fundraising: LLCs can raise funds by bringing on new members or obtaining loans, but they generally don’t issue stock. This can be a drawback when trying to attract outside investors, particularly venture capitalists or angel investors, who often prefer a more standardized corporate structure. Additionally, the flexible nature of LLC ownership can make equity distribution more complex and less appealing to institutional investors.
• Corporation Fundraising: Corporations—especially C Corporations—are typically the preferred structure for raising capital. They can issue various classes of stock (common or preferred), which makes it easier to attract and reward investors. This is especially important for startups planning to scale quickly or eventually go public. The clear structure, governance, and reporting standards of a Corporation also offer reassurance to potential backers.

If your business plan includes significant fundraising or a future IPO, forming a Corporation may align better with your long-term goals. If you’re self-funding or growing more slowly with a tight-knit group of owners, an LLC can still serve you well.

Choosing the Right Fit for Your Florida Business

Deciding between an LLC and a Corporation is more than just checking a box—it’s about aligning your business structure with your goals, growth plans, and day-to-day realities. If you value flexibility, simplicity, and pass-through taxation, an LLC might be your best bet. On the other hand, if you’re planning to seek investors, issue stock, or scale rapidly, a Corporation could be the smarter long-term choice.

Ultimately, there’s no one-size-fits-all answer. The right structure depends on your specific needs, and making the wrong choice can create headaches down the road.

That’s where Kistemaker Business Law Group comes in. Our experienced legal team can help you evaluate your options, form your business correctly under Florida law, and build a solid foundation for long-term success. Whether you’re just getting started or restructuring an existing business, we’re here to guide you every step of the way.

Contact us today to schedule a consultation and take the guesswork out of forming your Florida business.

Forming a Limited Liability Company (LLC) in Florida is a popular choice for entrepreneurs and small business owners due to its flexibility, liability protection, and relatively simple formation process. But while filing Articles of Organization officially establishes your LLC with the state, many business owners overlook a critical next step: creating an Operating Agreement. In Florida, an Operating Agreement isn’t legally required—but having one is one of the smartest moves you can make to protect your business, prevent internal disputes, and define the rules that govern your company’s operations.

In this blog, we’ll explain exactly what an Operating Agreement is and why it matters—especially in the context of Florida law. We’ll cover the key components that should be included in every Operating Agreement, the potential risks of operating without one, how they can be tailored for single-member vs. multi-member LLCs, and how an experienced business attorney can help draft or review your agreement to ensure it meets your goals. Whether you’re just forming your LLC or looking to tighten up your internal processes, this guide will help you understand why every Florida LLC should have a clear, comprehensive Operating Agreement in place.

What Is an Operating Agreement?

An Operating Agreement is a foundational legal document that outlines how your Florida LLC will be run. It details the rights and responsibilities of each member, how profits and losses are distributed, how decisions are made, and what happens if a member leaves or the company dissolves. Think of it as the internal rulebook for your business—it helps prevent misunderstandings and provides a framework for resolving disputes if they arise.

In Florida, while you’re not legally required to file an Operating Agreement with the state, having one in place is strongly recommended. Without this agreement, your LLC will be governed by Florida’s default rules under the Florida Revised Limited Liability Company Act, which may not align with your specific needs or business goals. Having a well-drafted LLC operating document allows you to customize how your business functions and gives you greater control over the internal dynamics of your company.

What Are the Risks of Not Having an Operating Agreement?

Operating a Florida LLC without an Operating Agreement can expose your business to unnecessary risks, even if you’re the sole member. Without this document, you’re subject to the default provisions of Florida law, which may not reflect how you want your company to be managed. These default rules can be vague or overly broad, and they often fail to address the unique needs of individual businesses.

For multi-member LLCs, the absence of an Operating Agreement increases the likelihood of misunderstandings or disputes. Questions like “Who gets to make final decisions?”, “How are profits split?”, or “What happens if one member wants out?” can quickly turn into legal battles when there’s no written framework in place. Even in a single-member LLC, not having a formal LLC operating document can make it more difficult to separate your personal and business liabilities—potentially weakening the liability protection your LLC is meant to provide.

Ultimately, skipping this step can lead to confusion, conflict, and even costly litigation. An Operating Agreement helps you avoid these issues by setting clear expectations and providing a reliable process for resolving disagreements before they escalate.

Key Elements to Include in a Florida Operating Agreement

While every business is unique, there are several core components that should be included in any Operating Agreement in Florida to ensure clarity, consistency, and legal protection:

• Member Information and Ownership Structure: Clearly identify each member and specify their ownership percentage or capital contributions. This helps prevent future disputes over equity and control.
  
• Management Structure: State whether the LLC is managed by its members or by a designated manager. This affects how decisions are made and who has authority to act on behalf of the business.
  
• Voting Rights and Decision-Making: Define how voting will work—whether each member has one vote, or if votes are weighted by ownership percentage. You can also establish rules for tie-breaking and major decisions.
  
• Profit and Loss Distribution: Outline how profits and losses will be divided among members. You can stick with default rules or create a custom formula that reflects your agreement.
  
• Rules for Adding or Removing Members: Establish the process for admitting new members or handling the exit of a current one, whether voluntary or due to circumstances like death or disability.
  
• Dissolution Procedures: Clarify how the LLC will wind down if it’s ever dissolved, including how remaining assets will be distributed.
  
• Dispute Resolution Methods: Consider including a method for resolving internal disputes, such as mediation or arbitration, to avoid courtroom battles.
  

These elements ensure your LLC operating document addresses both everyday operations and worst-case scenarios, giving your business a solid legal foundation from the start.

Single-Member vs. Multi-Member LLCs: Do Both Need Operating Agreements?

Even if you’re the only member of your LLC, an Operating Agreement is still incredibly important. For single-member LLCs, it helps reinforce the legal separation between the business and the owner, which can be critical if your liability protection is ever challenged in court. For multi-member LLCs, it’s even more vital—it sets expectations from day one and prevents confusion about decision-making, profit-sharing, and what happens if a member exits. In both cases, this key LLC operating document ensures your business runs according to your terms, not just Florida’s default rules.

Why You Should Work with a Business Attorney

While there are plenty of online templates for Operating Agreements, a one-size-fits-all approach rarely offers the protection and customization your Florida LLC truly needs. A business attorney can help you draft an Operating Agreement tailored to your company’s goals, structure, and risk profile. They’ll ensure your Operating Agreement in Florida complies with state laws and covers the specific issues that matter most to your business.

Whether you’re forming a new LLC or revisiting your current LLC operating document, having an attorney review or draft your agreement can give you peace of mind and help avoid costly disputes in the future.

Can You Update an Operating Agreement Later?

Yes—your Operating Agreement isn’t set in stone. As your Florida LLC grows or changes, you can amend the agreement to reflect new realities, such as bringing on new members, changing the management structure, or revising profit distribution. However, it’s important to follow the amendment process outlined in your original agreement to ensure changes are legally valid. Working with a business attorney can help ensure updates are properly documented and compliant with Florida law.

Set Your Florida LLC Up for Success

An Operating Agreement is more than just paperwork—it’s a vital tool for protecting your business, defining your internal structure, and staying in control of how your Florida LLC operates. Taking the time to create a well-crafted agreement now can save you from serious headaches down the road.

If you’re ready to create or update your Operating Agreement, the team at Kistemaker Business Law Group is here to help. Contact us today to schedule a consultation and make sure your business is built on a strong legal foundation.

Legendary Sir Paul McCartney recently told the BBC that it was John Lennon who asked for a “divorce” of the Beatles. McCartney was left with the task of petitioning the court to dissolve the business partnership that was “The Beatles,” which gave him the unfortunate reputation of being the Beatle who broke up one of the most beloved music groups of all time. This reputation, says McCarthy, frustrated him for the past 50 years.

The Beatles’ partnership agreement was 2-3 paragraphs long, written on a single sheet of paper. McCartney’s lawsuit finally settled after four years, with the parties reducing their agreement to an 87-page settlement agreement. What started out as a simple agreement between good friends became a protracted battle in the courts.

Business breakups, big and small, can be emotionally and financially taxing. Help prevent this stress by:

• Enter an operating or partnership agreement with all members/partners at the start of the business enterprise.
• Keep track of how much money and sweat equity each member/partner is contributing.
• Create triggering events for termination of the business and buyouts of each other’s interests.
• Create a means to easily value the business for purposes of a buyout.
• Put non-compete agreements and non-disclosure agreements in place between members/partners.
• Create agreements on who owns real and personal property of the business, intellectual property (e.g. trademarks and copyrights), and proprietary information (e.g. client lists, proprietary processes, etc.) upon dissolution of the business.
• Consult with an experienced business attorney at the formation of the business.

An experienced business attorney can guide you and your business through all stages of the business life cycle. If you are starting a business, or experiencing a business breakdown, contact one of our business attorneys for a consultation.

More and more, insurance companies that provide unit owner insurance are suing community associations to recover payments made to the unit owner that are related to water leaks in the unit. These type of lawsuits are problematic. First, the insurance companies are waiting years to bring them, although still within the statute of limitations for the lawsuit, but nonetheless to the detriment of the community association’s defense of the case as records and memories fade overtime. Secondly, the cases are many times brought in small claims court as a result of the insurance company seeking at most $5,000.00 in “reimbursement” from the community association.

The issue with defending a small claims court case is that the cost of defending the lawsuit can be more than the amount the insurance company is seeking which puts pressure on the community association to simply settle. The basis of the insurance company’s lawsuit against the community association is negligence; the insurance company claims that the association had a duty to take some action, failed to take the action and such a failure led to loss that resulted in the insurance payment to the unit owner.What can be done to limit a community association’s exposure to such lawsuits? First, the community association should consult with its attorney to determine if an amendment to the declaration for the association should be adopted related to subrogation.

Next, community associations need to promptly respond to complaints related to leaks and properly document repair work in a detailed manner so that the location and extent of work is easily understood. The documentation related to repair work should be kept for seven years and be readily accessible. Community associations should perform routine maintenance and inspections of property that the association is required to maintain in order to identify in advance of a water leak areas of needed maintenance. Anytime there is a water leak or other casualty to unit, the association must thoroughly document, in writing, what happened to cause the leak, what was done in response to the leak and all communications between the association, the unit owner and the unit owner’s insurance company and adjuster. Such documentation should be shared with the community association’s attorney and kept in the association’s official records.

If a unit owner does not pay his or her assessments, the condo association has the power to file a claim of lien and, ultimately, foreclose on the unit. But in order to do the above, the condo association must strictly comply with the statutory pre-conditions and requirements which follow:

1 – Perfecting the Lien: Call or send a nice Reminder/Demand Letter (Optional)
Contact the owner And let them know they are late in paying their assessment. This simple step may result in the unit owner paying all amounts due and owing, without any additional action required by the association.
 2 – Notice of Intent to Record a Claim of Lien (mandatory pre-condition)
A notice of intent to lien is a formal statutory letter sent to the delinquent unit owner stating the association’s intent to place a lien on the unit for the owners failure to pay assessments. The notice of intent to lien must be delivered to the owner of the unit by both registered or certified mail, return receipt requested, and first-class United States mail to the owner at his or her last known address as reflected in the records of the association. If the address reflected in the records of the association is not the condominium unit address, the notice of intent to lien must also be delivered to the owner at the address of the unit. Delivery of the notice is deemed given upon mailing. § 718.121(4), Fla. Stat. The association must give the owner thirty (30) days to pay the outstanding balance before proceeding to the next step.
3 -Record the Claim of Lien
Thirty (30) days after sending the notice of intent to lien, the association can record the claim of lien in the public records. § 718.121(4), Fla. Stat. In Florida, the claim of lien must be drafted by an attorney because a legal description is required and it creates property rights. To be valid, the claim of lien must include:
• a legal description of the condominium parcel;
• the name of the record holder;
• the name and address of the condominium association;
• the amount due;
• the due dates; and
• it must be executed and acknowledged by an officer or authorized agent of the association.
The claim of lien secures all unpaid assessments that are due and that may accrue after the lien is recorded through the entry of final judgment, as well as interest, administrative late fees, and all reasonable costs and attorney fees. § 718.116(5)(b), Fla. Stat. The claim of lien is only valid for one (1) year after it is recorded. In other words, a legal action to foreclosure the lien must be commenced within one (1) year of filing the claim of lien.
If the unit owner pays the amount owed in full, the owner is entitled to a filing and recording of a “Release of Lien” in substantial compliance with the form found in in § 718.116(5)(d). The unit owner may contest the lien by filing a “Notice of Contest of Lien.” If the unit owner files a Notice of Contest of Lien, the association must commence a legal action to enforce the lien within ninety (90) days from the date the association received such notice. If the association does not commence an action within that ninety (90) day period, the claim of lien is voided. § 718.116(5)(c).
4 – Notice of Intent to Foreclose the Lien
The condominium association must provide written notice to the unit owner of its intention to foreclose its lien thirty (30) days before filing a lien foreclosure action. The notice must be delivered by physically delivering a copy to the unit owner, or by certified or registered mail, return receipt requested, addressed to the unit owner at his or her last known address. The notice is deemed to have been given at the time of mailing. § 718.116(6)(b).
5 – Foreclose the Lien
Thirty (30) days after the condominium association provided written notice of intent to foreclose, the association may bring a legal action in its name to foreclose the lien in the same manner a mortgage of real property is foreclosed, and may bring an action to recover a money judgment for the unpaid assessments without waiving any claim of lien. The association is entitled to recover its reasonable attorney’s fees incurred in either action. § 718.116(6)(a). At the foreclosure sale, the association has the power to purchase the condominium unit and to hold, lease, mortgage, or convey it. § 718.116(6)(d).

A proposed bill would expand the list of permits and authorizations qualifying for extension due to a Governor-declared natural emergency.

Section 252.363(1)(a), Florida Statutes, provides that certain permits and authorizations are eligible for an extension once a natural emergency is declared by the Governor for the length of time the declaration is in effect plus an additional six (6) months.

Condominiums in Florida lead the way in green living. For those who want a smaller carbon footprint, or simply want a smaller electric and water bill, living in a multi-family condominium building can be the simplest way to do both. Did you know?:

• Apartments/Multi-family dwellings use, on average, 30% less electricity per person and 50% less electricity per household than traditional single-family detached homes. Nationwide, that is an average of $1,200.00 savings per household per year!

• In Florida condominiums where unit owners have assigned parking spaces, owners can install electric vehicle charging stations. Check the Declaration of Condominium to determine your parking rights before buying that shiny new Tesla!

• Florida condominiums must permit installation of energy devices based on renewable resources, so long as they are contained within the unit. These include solar panels, clotheslines, skylights, energy efficient blinds, low-e glass windows, and many more. Check the Declaration of Condominium to determine unit boundaries before installing anything that might change the exterior of the building.

• Apartments/Multi-family dwellings use, on average, less water than single family homes. This is due to increased population density, decreased irrigation needs and shared amenities like pools, spas, etc.

• For condominiums located in urban centers, owners can reduce their driving needs by walking, biking, or driving shorter distances to stores, restaurants, etc. Some mixed-use condominiums even have these amenities right in the building.

There are nearly 800 co-operative projects in the state of Florida, some of them dating back to the 1950’s. Prior to the condominium revolution of the 1970’s and 1980’s, co-operatives, or “co-ops,” were a way for many individual people to divvy up ownership of one building or land parcel. In a co-op, owners are shareholders of a corporation, the corporation owns the apartment building or land and “leases” the apartments or land back to the members, typically for a term of 99-years. As condominiums became more popular, co-ops became disfavored. However, in certain scenarios, the co-operative form of ownership may provide flexibility to owners that condominiums just can’t. For example, a coop can also be a mobile home park, a recreational vehicle park, or a campground? For vacationers to the Daytona Beach area, owning a co-operative campsite might be ideal to park the RV for Bike Week and then rent it out the rest of the year.

But with this flexibility comes additional regulation and some drawbacks. Mobile home parks and RV parks are subject to stringent health and sanitation requirements monitored and enforced by the Florida Department of Health. The RV park may need to pay bed or resort taxes to the local taxing authority if spaces are rented to the public. And there is caselaw that co-operative property may not be afforded the same homestead protection as a condo or single-family home when its owner dies.

It is important you understand the potential benefits and liabilities of owning a co-operative before purchasing. Similarly, owners who serve on the Board of Directors of a co-operative should understand the unique nature of this property type and the regulations particular to the individual co-operative property. An experienced community association attorney can help navigate these uncertain waters.

After an HOA foreclosure action has been filed and served on an Owner, BUT PRIOR to the Court entering a final judgment in the action or ordering the foreclosure sale, a homeowner can file a “qualifying offer” indicating his or her intent to pay all amounts owed to the association within a period of not more than 60 days.

Fla. Stat. §720.3085(6). The filing of a qualifying offer stays proceedings and the accrual of attorney fees and costs to permit the homeowner time to satisfy the association’s claim. A homeowner may not make an effective qualifying offer if the property’s mortgage is in foreclosure, if the homeowner has filed bankruptcy, or if the trial date of the foreclosure action is set for less than thirty days in the future.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

With regard to foreclosures in general, Florida law permits homeowners to “redeem” a property in foreclosure at any time prior to certification of the sale by the clerk or a later date specified by the judge in the foreclosure order. Fla. Stat. §45.0315. A home is redeemed by paying all past-due amounts, including any foreclosure costs.

How many times have you thought about resigning from your home owners association’s board of directors because you are frustrated and unappreciated. I can imagine many times. However, it is important not to resign without considering the implications and later regret. It is important to note, in Florida, Section 617.0807 of the General Not For Profit Corporate Act provides that a director may resign at any time by delivering a written notice to the board of directors. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date.

The statute further provides that resignations must be in writing and most reasonable people agree that email constitutes written communication. Therefore, resigning in haste via email (which I see often) can pose a big problem for association directors who later regret that decision. The statute does not require anyone to actually “accept” the tendered resignation so if a frustrated director writes an email to his or her fellow directors tendering a resignation in the hopes that someone will talk them out of it, it is already too late as they are off the Board. Of course, he or she can appeal to the board to be reappointed to the seat he or she just vacated by virtue of resigning but there is no guarantee that will happen.

If you are an association director who is considering resigning from your board, take your time to think about this very important decision before sending a hasty email.