Setting Up a Business Partnership in Florida

In Florida, you can form several types of partnerships: 1) General Partnership (GP), where all partners share equally in management and liability; 2) Limited Partnership (LP), which has both general partners who manage the business and limited partners who are passive investors; 3) Limited Liability Partnership (LLP), which provides some liability protection for all partners; and 4) Limited Liability Limited Partnership (LLLP), which combines features of LPs and LLPs. Each structure has different liability protections and filing requirements.

It depends on the type of partnership. General Partnerships (GPs) are not required to register with the Florida Division of Corporations, though they may need to register a fictitious name ('doing business as' or DBA). Limited Partnerships (LPs), Limited Liability Partnerships (LLPs), and Limited Liability Limited Partnerships (LLLPs) must file with the Florida Division of Corporations. All partnerships should register with the Florida Department of Revenue for tax purposes.

Florida law does not legally require a written partnership agreement, but it is strongly recommended. Without a written agreement, your partnership will be governed by Florida's Revised Uniform Partnership Act, which may not align with your intentions. A written agreement allows you to customize important aspects like profit sharing, decision-making authority, dispute resolution, and exit strategies. Having a clear, written agreement can prevent misunderstandings and costly disputes later.

Partnerships in Florida are typically 'pass-through' entities for tax purposes. This means the partnership itself doesn't pay income taxes; instead, profits and losses 'pass through' to the individual partners, who report them on their personal tax returns. Florida has no state income tax, which is advantageous, but partners still need to pay federal income taxes and self-employment taxes. Partnerships must file an annual information return (Form 1065) with the IRS and provide each partner with a Schedule K-1 showing their share of income or losses.

Liability varies by partnership type. In a General Partnership (GP), all partners have unlimited personal liability for partnership debts and obligations. In a Limited Partnership (LP), general partners have unlimited liability while limited partners' liability is restricted to their investment. Limited Liability Partnerships (LLPs) and Limited Liability Limited Partnerships (LLLPs) offer more protection, shielding partners from personal liability for partnership debts and other partners' negligence, though partners remain liable for their own negligence and malpractice.

To dissolve a partnership in Florida, follow these steps: 1) Review your partnership agreement for dissolution procedures; 2) Hold a formal vote among partners according to your agreement; 3) File a Statement of Dissolution with the Florida Division of Corporations (for registered partnerships); 4) Notify all creditors, clients, and business associates; 5) Cancel business licenses, permits, and registrations; 6) File final tax returns; 7) Distribute remaining assets according to ownership percentages or your agreement. Consider consulting with an attorney to ensure proper dissolution and avoid future liabilities.

Florida partnerships have several ongoing compliance requirements: 1) Annual reports must be filed with the Florida Division of Corporations by May 1 each year (for LPs, LLPs, and LLLPs); 2) Fictitious name registrations must be renewed every five years; 3) Business tax receipts (local business licenses) typically need annual renewal; 4) Sales tax returns must be filed if you collect sales tax; 5) Federal tax information returns (Form 1065) must be filed annually; 6) Employment taxes must be paid if you have employees. Failure to maintain compliance can result in penalties, loss of good standing, or even administrative dissolution.

Yes, Florida law allows partnerships to convert to other business entities, such as LLCs or corporations. The conversion process typically involves: 1) Getting partner approval according to your partnership agreement; 2) Preparing a plan of conversion; 3) Filing conversion documents with the Florida Division of Corporations; 4) Obtaining a new EIN if required; 5) Transferring licenses, permits, and contracts to the new entity. This process allows you to change your business structure without dissolving and reforming, potentially preserving your business history, contracts, and licenses. However, tax consequences may apply, so consulting with a tax professional is advisable.

Partnership disputes in Florida are typically resolved through: 1) Internal resolution based on the partnership agreement's dispute resolution provisions; 2) Mediation, where a neutral third party helps partners reach a voluntary agreement; 3) Arbitration, which is more formal than mediation but less formal than court; or 4) Litigation in Florida courts. Florida courts generally defer to well-drafted partnership agreements, so having clear provisions for voting, profit distribution, partner duties, and dispute resolution is crucial. The Florida Revised Uniform Partnership Act provides default rules that apply when partnership agreements are silent on specific issues.