Setting up a business in Florida is not difficult. The state offers an exclusive online portal (Sunbiz), where anyone can fill out the forms necessary to create a company.
However, only licensed lawyers can perform this type of service for third parties, which means that any other professional who offers this service to their clients will incur unlicensed practice of law.
In this article, you will discover the reason why accountants cannot create companies in Florida.
Creating a Company in Florida – Understanding the Process
Once an entrepreneur has decided on an ideal business structure for his/her business (e.g., LLC, corporation, etc.) and has a business name in mind, it is time to register the company with the state.
The state of Florida considers that providing this type of service to third parties is the practice of the law, regardless of whether the person who provided the service charges a fee for the service or whether it is providing that service to relatives and close friends only.
Consequently, if an accountant or any other consultant offers to perform any of these services, this is an unlicensed practice by law.
The Reasons Why Accountants Cannot Create Companies – A Case Study
Many cases in Florida’s legislative history show how the Florida Supreme Court is adamant regarding unlicensed practice of law.
In the case Florida Bar v. Town (1965), a Florida business entity was created by a non-lawyer for some clients.
Claiming that they were specialists in business incorporations, the non-lawyer was hired by clients to create a company. Then, he proceeded to create a corporation by preparing the charter and filing it with the state.
Once this step was concluded, the non-lawyer drafted the corporation’s bylaws, resolutions, and other documents as well.
At the occasion, the state Supreme Court provided that the by-laws of a corporation are a contract between the corporation and the state. Plus, it is a contract between the corporation and its shareholders.
Hence, this type of contract can only be created for others in Florida by licensed lawyers. The non-lawyer was ordered to stop filing charters, creating entities for others, and drafting corporate agreements.
In the case Florida Bar v. Fuentes (1966), an accountant created an LLC (limited liability company) by preparing and filing the Article of Organization, also drafting other crucial agreements.
Accordingly, the Florida Supreme Court determined that the respondent (the accountant) must stop creating entities and drafting agreements, given the fact that he was offering a limited, misleading, and dangerous pseudo-legal service.
What is the Role of a Business Accountant in Florida?
Even though accountants cannot create companies in Florida, companies may benefit from hiring their services on different occasions.
An expert accountant in Florida can help businesses by:
- Using accounting software to materialize financial projections and other reports
- Dealing with all the complex math, from loan application to tax audits
- Providing measure key business metrics (e.g., company’s salary ratio to total revenue)
- Using cloud-based accounting software to protect your financial data
- Producing charts to provide a clear picture of the company’s financial situation
- Keeping the company’s administrators up to date with the latest tax legislation
- Preparing yearly statements of accounts
- Handling the business payroll
- Ensuring that all employee-related tax codes and payments are properly recorded
Why Hiring a Business Attorney is Crucial for Businesses in Florida?
As stated before, only a licensed attorney will be able to create a company for you in Florida. Nonetheless, the assistance of a business attorney goes much further than that, being a crucial factor behind the success of a company.
An expert business lawyer will assess each business’s situation to tailor contracts according to each circumstance, also helping to review terms and clauses and to double-check all of them to detect errors or non-compliance with the law.
Moreover, a business attorney can help entrepreneurs avoid lawsuits by drafting adequate agreements, avoiding “handshake deals,” and ensuring compliance with employment law at the state and federal law.
Plus, an expert attorney will guide business owners by:
- helping companies get property insurance for a wide array of unexpected issues;
- providing insights regarding optimized business management; and
- drafting and organizing the necessary paperwork for any legal procedure (e.g., litigation, M&A, estate planning, business succession, etc.)
We Can Help You to Create a Business in Florida
Accountants cannot create companies in Florida, but a licensed attorney can do it for you. At Jurado & Farshchian, P.L. we have licensed attorneys that will guide you throughout the creation of your company, overseeing the whole process to prevent any legal issues.