Business Entities

1
Business Entities

• Entity Choices
• What are the options?
• INC, PA, CORP, LLC, LTD, LLP, LLLP
• Business basics.
• Title Issues.
• Who has authority?
• Oops Underwriting?

2
2007 Real Estate Certification

• Business Entities
• Barry B. Ansbacher
• Ansbacher McKeel, P.A.
• Jacksonville, Florida
• bba_at_ansbacher.net

3
General Trends

• IRS Flexibility in Tax Treatment
• Ease or Merger and Conversion Between Entities
• Blending the Distinctions
• Limited Liability for Non-Corporate Entities
• Pass through tax treatment for Corporations.
• Uniform Business Reports
• Intangible Tax Reform

4
Ethics First

• Who is your client?
• Joint Representation.
• Improper use of multiple entities in real estate
  flips.

5
Sole Proprietorship - Basics

• Formation
• No action required other than taking title or
  commencing business.
• Ownership
• Natural Person(s).
• Governance
• Direct by owner(s).

6
Corporation - Types

• Florida For Profit.
• C Corporation Tax Treatment
• S Corporation Tax Treatment
• Professional Service Corporations
• Florida Not For Profit.
• Foreign

7
Corporation - Basics

• Florida Business Corporation Act
• Formation
• (Subscription Agreement)
• Articles of Incorporation
• Bylaws
• Organizational Meeting
• Stock Issuance
• (Shareholders Agreement)
• Ownership
• Shareholders
• Governance
• Directors
• Officers

8
Limited Liability Company Types

• Florida Limited Liability Company
• Single Member Disregarded Entity
• Professional Limited Liability Company
• Foreign Limited Liability Company

9
Limited Liability Company - Basics

• Florida Limited Liability Company Act
• Formation
• Articles of Organization
• Operating Agreement
• (Certificate Issuance)
• Ownership
• Members
• Governance
• Members or
• Manager(s) or
• Managing Members.

10
Partnership - Types

• General Partnerships Joint Ventures
• Registered Limited Partnership
• Limited Liability Partnership LLP
• Limited Partnerships Ltd.
• Limited Liability Limited Partnerships LLLP
• Foreign Partnerships

11
General Partnership - Basics

• Florida Revised Uniform Partnership Act of 1995
• Formation
• Verbal or Written Agreement.
• Automatic When 2 Persons Carry on Business as
  Co-Owners. Excludes joint ownership of realty.
• No filing or registration unless
• Registering to be a Registered General
  Partnership,
• Registering to be a Limited Liability
  Partnership.
• Ownership
• Partners
• Governance
• Partners

12
Limited Partnership - Basics

• Florida Revised Uniform Limited Partnership Act
  of 2005
• (2005-267 Laws of Florida)
• Formation
• Certificate of Limited Partnership
• Limited Partnership Agreement
• If LLLP, Also Register General Partner as an LLP
• Ownership
• Partners
• Governance
• General Partner(s)

13
Entity Selection

• Operating Business
• S Corporation
• Real Estate Holding Vehicle
• LLP Limited Liability Partnership
• No Entity

14
Title Issues - Corporations

• Deed prior to incorporation.
• Generally not valid. UTS. 3.1
• Ability to back date Incorporation.
• If deed signed, but not delivered and recorded
  until after incorporation cure by affidavit.

15
Title Issues - Corporations

• Conveyances From Corporation
• Seal doesnt have to be a Seal.
• Witnesses not required for deed under seal when
  signed by President, Vice-President or Chief
  Executive Officer.
• Attestation not required.
• Conveyance without seal okay, but witnesses
  required.
• Witnesses never required for mortgages.
• Corp. Acting on Behalf of Another.

16
Title Issues - Corporations

• Foreign Corporation Not Registered to do Business
  in Florida
• Deed still valid.
• Foreign Entity must still have legal existence in
  its home state or if dissolved conveyance must be
  in accordance with laws of home state.

17
Title Issues - Corporations

• Conveyances By Dissolved Corporation
• Prior to January 1, 1976 Majority of surviving
  directors as trustees.
• January 1, 1976 through June 19, 1976 All
  surviving directors as trustees
• June 20, 1976 though June 30 1990 Same as prior
  to January 1, 1976
• After June 30, 1990 Continued existence for
  winding up.

18
Title Issues - Partnership

• Partners or Partnership?
• Always review partnership agreement.
• Limitations of authority if recorded for a
  registered general partnership. 620.8303
• UPA vs. RUPA
• All Florida Partnerships now subject to RUPA.
• Convey into ABC Partnership or X and Y as
  partners of ABC Partnership.