When you start a business, you must make many decisions, including the selection of an entity or structure. However, as your company evolves, your business needs may change, making your chosen structure unsuitable.
Fortunately, Florida does allow businesses to change entity types. A new structure can open up opportunities for growth and prosperity. But what circumstances can benefit from a change in structure?
When to consider a change
Altering your business entity is not a decision to take lightly – it requires a careful review of your company. Common scenarios that may warrant a change include:
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Significant growth: If a sole proprietorship or partnership does not provide adequate liability protection as your business grows, switching to an LLC or corporation can shield personal assets and offer a robust growth structure.
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Attracting investors: If you are seeking external funding for your company, a corporation often appeals more to investors due to its stock options and formal structure.
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Tax benefits: If you are looking to reduce your business taxes, a different entity can help you meet this goal, but seeking a legal opinion before the change is wise.
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Risk management: If your current structure exposes you to personal liability, transitioning to an entity like an LLC or corporation can limit your exposure and safeguard personal assets.
The key is to review your business goals and speak with someone who can help you weigh the pros and cons of a change before proceeding.
Proactively adapting your business entity can position your company for long-term success in the Florida market. Consider it an investment in your future that is well worth making.