If you are a business owner, you probably already know that there are many different kinds of business structures available to those who want to start a new business in Florida. Before you opened your business, you likely put a lot of time and effort into researching the pros and cons of various business structures to find the one that was right for your business’s specific needs.
However, as time went on and your business grew, its needs likely changed as well. You may find yourself wondering if it’s possible to change business structures to a more advantageous one, or if you are stuck with the structure that you chose when going through the business formation process.
Switching business structures
Florida law does allow for the conversion of a business into a different business structure. You can make the change by filing the correct forms with the Florida Secretary of State – or hiring an attorney to compile and file them for you. There are different requirements depending upon the type of structure you have and the structure you want to convert to.
If you have shareholders, you may need their approval for the conversion, and you will need to have a plan in place to manage how their ownership interest will translate to the new business structure.
The plan of conversion requirement
For example, if your existing business structure is a corporation, you will need to put together a plan of conversion and submitting it to the Secretary of State. This plan must include things such as how you will convert shares and the right to acquire shares, in addition to how you will deal with other securities and debts.
Despite how complex the business conversion process can seem, there are times when the effort will be well worth it. If you seek to maximize your business’s efficiency and tax advantages, a structure change might be the best way to do that.