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Basic types of Corporate ownership in Florida
Although types of business ownership vary there are several most popular
types of business ownership in America.
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Sole proprietorship: A sole proprietorship is a business
owned by one person. The owner may operate on his or her own or may
employ others. The owner of the business has total and unlimited
personal liability of the debts incurred by the business.
Partnership: A partnership is a form of business in which two or more
people operate for the common goal of making profit. Each partner has
total and unlimited personal liability of the debts incurred by the
partnership. There are three typical classifications of partnerships:
general partnerships, limited partnerships, and limited liability
partnerships.
Corporation: A business corporation is a for-profit, limited liability
entity that has a separate legal personality from its members. A
corporation is owned by multiple shareholders and is overseen by board
of directors, which hires the business's managerial staff.
Cooperative: Often referred to as a "Co-Op business" or "Co-Op", a
cooperative is a for-profit, limited liability entity that differs from
a corporation in that it has members, as opposed to shareholders, who
share decision-making authority. Cooperatives are typically classified
as either consumer cooperatives or worker cooperatives. Cooperatives are
fundamental to the ideology of economic democracy.
In general, defining legal rights and obligations of a corporation consist of
the capacities (1) to sue and to be sued, (2) to have assets, (3) to
employ agents, (4) to engage in contracts, and (5) to make by-laws
governing its internal affairs.
Currently, the modern business corporation is the dominant type of
corporation. In addition to its legal personality, the modern business
corporation has at least three other legal characteristics: (1)
transferable shares (shareholders can change without affecting its
status as a legal entity), (2) perpetual succession capacity (its
possible continued existence despite shareholders' death or withdrawal),
(3) and limited liability (including, but not limited to: the
shareholders' limited responsibility for corporate debt, insulation from
judgments against the corporation, shareholders' amnesty from criminal
actions of the corporation, and, in some jurisdictions, limited
liability for corporate officers and directors from criminal acts by the
corporation).
The modern business corporation's prevalence often obscures the fact
that for years other corporate entities existed, before the emergence of
the modern business corporation, for example, church, educational and
charity corporations. Investors and entrepreneurs often form joint stock
companies and then incorporated them to facilitate conducting business;
as this business entity now is prevalent, the term corporation often is
used to specifically refer to such business corporations. Corporations
may also be formed for local government (municipal corporation),
political, religious, and charitable purposes (not-for-profit
corporation), or for government programs (government-owned corporation).
As a generic legal term, 'corporation' means any group of persons with a
legal personality. Historically, the modern business corporation emerged
from the blending of the traditional corporation with the joint-stock
company.
Legal status
The existence of a corporation requires a special legal framework and
body of law that specifically grants the corporation legal personality,
and typically views a corporation as a fictional person, a legal person,
or a moral person (as opposed to a natural person). As such, corporate
statutes typically give corporations the ability to own property, sign
binding contracts, pay taxes in a capacity that is separate from that of
its shareholders (who are sometimes referred to as "members".)
The legal personality has two economic implications. First it grants
creditors priority over the corporate assets upon liquidation. Second,
corporate assets cannot be withdrawn by its shareholders, nor can the
assets of the firm be taken by personal creditors of its shareholders.
The second feature requires special legislation and a special legal
framework, as it cannot be reproduced via standard contract law.
Limited liability
Unlike in a partnership or sole proprietorship, shareholders of a modern
business corporation have "limited" liability for the corporation's
debts and obligations. As a result their potential losses cannot
exceed the amount which they contributed to the corporation as dues or
paid for shares. Limited liability regulations enable corporations to
socialize their costs for the primary benefit of shareholders. The
economic rationale for this lies in the fact that it allows anonymous
trading in the shares of the corporation by virtue of eliminating the
corporation's creditors as a stakeholder in such a transaction. Without
limited liability, a creditor would not likely allow any share to be
sold to a buyer of at least equivalent creditworthiness as the seller.
Limited liability further allows corporations to raise tremendously more
funds for enterprises by combining funds from the owners of stock.
Limited liability reduces the amount that a shareholder can lose in a
company. This in turn greatly reduces the risk for potential
shareholders and increases both the number of willing shareholders and
the amount they are likely to invest.
Perpetual lifetime
Another favorable regulation, the assets and structure of the
corporation exist beyond the lifetime of any of its shareholders,
bondholders, or employees. This allows for stability and accumulation of
capital, which thus becomes available for investment in projects of a
larger size and over a longer term than if the corporate assets remained
subject to dissolution and distribution. This feature also had great
importance in the medieval period, when land donated to the Church (a
corporation) would not generate the feudal fees that a lord could claim
upon a landholder's death. In this regard, see Statute of Mortmain. It
is important to note that the "perpetual lifetime" feature is an
indication of the unbounded potential duration of the corporation's
existence, and its accumulation of wealth and thus power. (In theory, a
corporation can have its charter revoked at any time, putting an end to
its existence as a legal entity. However, in practice, dissolution only
occurs for corporations that request it or fail to meet annual filing
requirements.)
Ownership and control
Persons and other legal entities composed of persons (such as trusts and
other corporations) can have the right to vote or share in the profit of
corporations. In the case of for-profit corporations, these voters hold
shares of stock and are thus called shareholders or stockholders. When
no stockholders exist, a corporation may exist as a non-stock
corporation, and instead of having stockholders, the corporation has
members who have the right to vote on its operations. If the non-stock
corporation is not operated for profit, it is called a not-for-profit
corporation. In either category, the corporation comprises a collective
of individuals with a distinct legal status and with special privileges
not provided to ordinary unincorporated businesses, to voluntary
associations, or to groups of individuals.
Generally, a corporation files articles of incorporation with the
government, laying out the general nature of the corporation, the amount
of stock it is authorized to issue, and the names and addresses of
directors. Once the articles are approved, the corporation's directors
meet to create bylaws that govern the internal functions of the
corporation, such as meeting procedures and officer positions.
Corporate - Business Registered Agents are paramount elements of
successful businesses in America. Since laws are ever changing and the
legal process is always potentially influencing businesses across
America we pride ourselves on delivering and serving legal documents in
a professional and courteous manner. As we will conduct ourselves with
you, we will always act and provide services under the laws of the
issuing state or country. If for some reason the Registered Agent and or
office is uncooperative with us, we will be as assertive and diligent as
anyone can possibly imagine. From time to time we encounter
uncooperative agents or employees of the agents. When or if we come in
contact with evasive or allusive agents, we always remind them of the
laws that govern their actions. We don't act passively and in most cases
if necessary our efforts are deemed highly assertive and relentless, if
necessary. Overall, we don't expect problems with delivery or service of
legal documents, yet we always want our clients to know their interests
are protected and the services you retained will be properly handled.
To have your legal documents delivered and served upon
a Business of Corporation
please contact us at 561. 447. 7638. Or, email to
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