RIVEROS CORP NETWORK | Apostille de la Haya · Notary Public Center · Compliance Officers · USJurisdiction
RIVEROS CORP NETWORK | Apostille de la Haya · Notary Public Center · Compliance Officers · USJurisdiction
A corporation is not just “a big company.” It is a specific legal entity, with a legal name, a defined way of coming into existence and governance rules set by state law. This guide explains exactly what it is, how it differs from an LLC or from working as a sole proprietor, and what obligations you take on when you form one.
A corporation is a legal entity that comes into existence when the state files its Articles of Incorporation: it exists separately from the people who own it, its capital is divided into shares, and it is governed by directors elected by the shareholders.
The word separately is worth pausing on, because everything else follows from it. A corporation can own property in its own name, sign contracts, open accounts, sue and be sued. It does not do this “on behalf of” its owners: it does it on its own. Chapter 607 of the Florida Statutes says so plainly — a corporation has “the same powers as an individual” to carry out its business and affairs (§607.0302).
In practice, two consequences matter most: the company’s assets and its owners’ assets are separate, and the company does not die when its owners change.
Five features define it. All five come from the law, not from custom, and they are what an investor, a bank or a court will look at.
The corporation is a legal person distinct from its shareholders. It enters into contracts, owns property, sues and is held liable in its own name (§607.0302). It is not an alias for its owners: in the eyes of the law, it is a different person.
Shareholders are not liable to the corporation’s creditors for its debts. Their only obligation is to pay in full for the shares they subscribed to (§607.0622). This is the feature that brings most people here.
Unless its own Articles say otherwise, a corporation has perpetual duration and succession (§607.0302). If a shareholder sells, retires or dies, the company does not end and does not have to be formed again.
The Articles set the classes of shares and how many the company may issue (§607.0601). That division is what lets owners buy in and cash out, split ownership into exact percentages and bring in an investor without restructuring the company.
Every corporation must have a board of directors, and the company’s powers are exercised under its authority (§607.0801). It is neither optional nor decorative: it is the body the law puts in charge of running the business.
The incorporators or the board adopt the bylaws, the internal rules that govern meetings, offices, quorums and voting (§607.0206). This is where the corporation writes down how decisions are made before any conflict arises.
This is the most common point of confusion, and it is behind most corporate disputes that surface too late. A corporation has three layers, and each one does something different. One person can hold all three at once — in a single-owner company that is the norm — but that does not merge them: they remain three roles with separate responsibilities.
They own the shares and, through them, the value of the company. Their power lies in electing and voting: they elect the directors and decide the matters that the law or the Articles reserve to them. They do not run day-to-day operations simply because they are owners.
The directors are responsible for managing the business: all corporate powers are exercised by or under the authority of the board (§607.0801). The board sets strategy, approves major decisions and appoints the officers.
President, secretary, treasurer and any other offices the bylaws define. The board appoints them (§607.08401), and they are the ones who sign and handle day-to-day operations. They answer to the board, not directly to the shareholders.
A corporation does not come into being when you decide to form it, when you open the bank account or when the first client arrives. It comes into existence at one precise legal moment.
Order matters. The entity is formed at the state level; tax numbers and elections are requested afterward, once the company exists. Doing it the other way around is the most common reason filings get rejected.
These are the two moments when this guide stops being theory.
Before you sign, check the official records to confirm that the corporation exists and is active, and to see who manages it.
We prepare the Articles of Incorporation, the bylaws and the rest of the file, and we explain the obligations you take on from day one.
This is the costliest misunderstanding of all. In Florida you form only one thing: a corporation. “C” and “S” are not entity types you choose at registration: they are two federal tax treatments that the IRS applies to that same company.
By default, a corporation is taxed as a C corporation. “S” status has to be requested, comes with requirements and can be lost.
The IRS recognizes a C corporation as a separate taxpayer. The company reports its own income on Form 1120 and pays its own tax.
Profits are taxed twice: first at the corporate level when they are earned, and again at the shareholder level when they are distributed as dividends. The company cannot deduct the dividends it pays, and shareholders cannot deduct the company’s losses.
The corporation passes its income, losses, deductions and credits through to its shareholders, who report them on their personal returns. This avoids double taxation, although the entity still pays tax on certain built-in gains and passive income.
It is requested on Form 2553, signed by all shareholders, and reported on Form 1120-S.
The IRS requires you to meet all of these points, not just some:
That fifth point is worth reading twice if you live outside the United States: a nonresident alien cannot be a shareholder of an S corporation. It is an IRS requirement, not anyone’s internal policy, and on its own it rules out many structures proposed from Latin America or Spain.
“Company” is the generic word; a corporation is one of the forms a company can take. These are the four entities people actually compare, and how they differ where it matters: who is liable for the debts, who is in charge and how profits are taxed.
The useful question is not which one is “better,” but what will be expected of you. If there are investors, ownership split into exact percentages or plans to bring in outside parties, the corporation is the format the market recognizes. If what you want is flexible governance with limited liability, the real comparison is in the guide to the LLC in Florida. And if the project does not distribute profits to owners, you need a different entity: the nonprofit.
A corporation is not something you form and forget. Its existence depends on short maintenance filings, and missing them has gradual, entirely predictable consequences.
Every Florida corporation — and every foreign corporation authorized to do business here — files its Annual Report in that window, and the first one is due in the year after it was formed (§607.1622(4)). It is a confirmation of company information, not a tax return.
The company must designate and continuously maintain a registered office and a registered agent in the state (§607.0501). That is the address where service of process and official notices from the Department of State are received.
Two separate effects. A corporation that fails to file its report cannot bring or maintain a lawsuit in the state’s courts until it is current (§607.1622(6)). And the Department may administratively dissolve it if the report is not received by 5 p.m. on the third Friday of September (§607.1420(1)(a)).
Minutes, resolutions, the shareholder register and the current bylaws. This is what gets reviewed in due diligence, when an investor comes in or when a bank asks who has signing authority.
Depending on the case, you will also need the EIN from the IRS to operate and hire, and a Certificate of Authority when a company formed outside Florida wants to do business in the state.
This guide is informational. It explains what a corporation is, how it is governed and what obligations it brings, so you can make an informed decision.
If you already know you want to form one, the process — name, share structure, Articles of Incorporation, registered agent and bylaws — is explained step by step on the service page. We handle it without you having to travel to the United States.
No figure or statement in this guide comes from a secondary source. Everything has been checked against the current official text.
We form corporations, LLCs and nonprofits in Florida, and we act as your registered agent in the state. Tell us about your case and we will tell you exactly which filing applies.
or call us at +1 (305) 647-3000 · Monday through Friday
175 SW 7th St, Suite 1905 · Miami, Florida 33130
The complete process in Florida: name, shares, Articles and bylaws.
The IRS tax election explained in detail, including its limits.
The flexible-governance alternative, under Chapter 605.
The starting point, with the four entities compared.
