Joint Tenancy with Right of Survivorship (JTWROS) in Florida bypasses probate under Fla. Stat. § 689.15, but it completely overrides your Last Will and Testament. Upon the death of one joint owner, title vests immediately and automatically in the surviving owner. This exposes assets to the survivor’s future creditors, potential remarriage claims, and total disinheritance of biological children from prior marriages.
Governed by Will DirectivesJoint Tenancy completely overrides your Will. A Revocable Trust strictly enforces every distribution instruction in your estate plan.
Co Owner Creditor ProtectionJoint Tenancy exposes your assets to co owner debts and lawsuits. A Revocable Trust protects assets from third party beneficiary liabilities.
Many South Florida homeowners and account holders add adult children, second spouses, or relatives to bank accounts and real estate deeds as a quick shortcut to avoid formal probate court proceedings.
While adding a joint owner appears convenient on the surface, Joint Tenancy with Right of Survivorship (JTWROS) is one of the most unpredictable, blunt force mechanisms in estate planning. Under Florida property and probate law, joint titling strips away your lifetime financial control, exposes your hard earned assets to outside lawsuits, and routinely triggers accidental family disinheritance.
3 Fatal Vulnerabilities of Joint Ownership Under Florida Estate Law
1. Automatic Property Transfer Overrides Your Will and Intentions
Under Florida Statute § 689.15, when property or financial assets are held as joint tenants with right of survivorship, the deceased co owner’s interest transfers instantly to the surviving co owner upon death by operation of law.
Your Last Will and Testament, Revocable Trust instructions, or verbal promises made to family members carry zero legal weight. If a parent adds one adult child to a Coral Springs real estate deed purely for administrative convenience or convenience check writing, that child becomes the sole legal owner upon the parent’s death, completely cutting out their siblings regardless of what the parent’s Will specifies.
2. Immediate Asset Exposure to Co Owner Liabilities and Creditors
The moment you name a joint owner on a bank account or Broward County real estate deed, that individual gains immediate legal ownership rights. If your co owner faces a divorce proceeding, automobile accident lawsuit, business bankruptcy, or personal tax lien, judgment creditors can attach claims directly to your shared asset. You effectively gamble your lifelong financial security on your co owner’s personal financial discipline and legal stability.
3. The Blended Family Disinheritance Trap
In blended families with children from prior relationships, joint titling regularly causes catastrophic estate outcomes.
When a married couple holds real estate or bank accounts jointly with right of survivorship, all assets vest exclusively in the surviving spouse upon the first spouse’s death. When that surviving spouse eventually passes away, the entire estate passes to their personal biological children or designated heirs. The biological children of the spouse who passed away first receive nothing, creating permanent financial alienation between stepfamilies.
Real World Legal Case Study: In re Estate of Kester
A clear example of how joint titling destroys testamentary intent is illustrated in the official Florida legal precedent In re Estate of Kester, Fla. 4th DCA 1986), decided by the Fourth District Court of Appeal in West Palm Beach.
The Case Background
In this landmark dispute, a mother executed a formal Last Will and Testament directing that her entire estate be divided equally among her children. However, for everyday banking convenience, she established joint bank accounts and credit union shares with right of survivorship naming only one of her daughters as a co owner.
The Legal Conflict
Following the mother’s death, the siblings brought legal action in court, arguing that the funds in the joint accounts were intended for the benefit of all children under the terms of the mother’s Will, and that the joint owner held those funds merely as a fiduciary for the estate.
The Court Ruling
The Fourth District Court of Appeal ruled firmly against the other siblings. The appellate court held that under Florida statutory law governing joint accounts, titling an account as joint tenancy with right of survivorship creates a strong legal presumption of an absolute gift to the surviving joint owner.
Because the disappointed siblings could not provide clear and convincing written evidence proving the mother did not intend to create a survivorship right at the exact moment the accounts were established, the surviving joint daughter kept the entirety of the money. The clear instructions contained inside the mother’s Last Will and Testament were completely ignored and legally powerless.
Superior Florida Legal Alternatives to Joint Ownership
Rather than risking loss of control or accidental disinheritance through joint titling shortcuts, comprehensive estate plans utilize flexible legal structures designed under Florida statutory law:
1. Revocable Living Trust
Establishing a trust under Fla. Stat. Chapter 736 allows you to maintain 100 percent sole authority over your real estate and financial accounts during your lifetime. Upon death, your named successor trustee distributes property to your designated beneficiaries according to your exact written terms, achieving complete probate court avoidance without exposing your assets to co owner debts or disinheriting loved ones.
2. Florida Financial Durable Power of Attorney
If your main objective is allowing a trusted child or relative to assist with bill paying, property maintenance, or financial management during a health crisis, executing a Durable Power of Attorney (Fla. Stat. § 709.2104) grants them legal administrative authority without giving them property ownership rights or subjecting your assets to their personal creditors.
3. Enhanced Life Estate Deed (Lady Bird Deed)
For primary residential property in Coral Springs, Fort Lauderdale, or anywhere in Broward County, an Enhanced Life Estate Deed allows a property owner to retain total lifetime ownership rights, including the right to sell, lease, or mortgage the home without obtaining permission, while designating an automatic transfer on death beneficiary that completely bypasses Florida probate.
Frequently Asked Questions
Does joint ownership avoid probate in Broward County?
Yes, joint tenancy with right of survivorship avoids probate upon the death of the first co owner. However, when the surviving owner eventually passes away without establishing formal trust planning, the property must pass through formal Florida probate administration.
Can I remove a joint owner from my Florida real estate deed without their consent?
No. Once an individual is added to a deed as a joint tenant in Florida, you cannot remove them, sell the property, or execute mortgages without their formal notarized signature, even if you originally paid for the entire property yourself.
What is the legal difference between Joint Tenancy and Tenancy by the Entirety in Florida?
Tenancy by the Entirety is a specialized form of joint ownership reserved strictly for legally married couples under Florida law. It provides built in creditor protection against individual spouse liabilities that standard Joint Tenancy does not offer.
Can a Last Will override a joint bank account in Florida?
No. Under Florida law, joint accounts with right of survivorship transfer automatically upon death. A Last Will carries no legal authority to alter or redistribute funds held in a valid joint survivorship account.
Protect Your Property and Family Autonomy in Coral Springs
If you manage or own rental property in South Florida, tenant turnovers and the occasional eviction are bound to happen. But here is the catch: when a lease ends or a tenant vacates under court order, how you handle their security deposit can make or break your legal standing.
Can you simply keep the deposit to cover unpaid rent or property damage? Not without following Florida procedural rules to the letter. Missing a statutory deadline or skipping a certified letter notice can strip away your legal right to hold those funds even if the tenant destroyed your floors or walked out owing months of rent.
So how does Fla. Stat. § 83.49 actually work when you are standing inside an empty unit staring at ruined drywall? What concrete steps must you take right now to protect your bottom line, and how can you keep yourself far away from costly disputes in local South Florida courtrooms? Let us break down everything you need to navigate move outs safely.
What Are Florida Security Deposit Notice Deadlines?
Quick Answer: Under Fla. Stat. § 83.49, Florida landlords have 15 days to return a security deposit in full if no deductions are being made. However, if you are claiming money for property damage, deep cleaning, or unpaid rent, you have 30 days to send an itemized claim via Certified Mail to the tenant last known address. If you fail to send this notice within 30 days, you legally forfeit your right to claim any part of the deposit.
The Core Rule: 15 Days vs 30 Days
Why do so many property owners get tripped up by Florida security deposit timelines? Usually, it comes down to confusing a clean turnover with a damage claim. You might ask yourself: Am I simply handing back their money, or am I preparing to fight for repair costs? The law divides move outs into two distinct paths:
No Claim on Deposit (15 Days): Timeline is 15 days from move out. Action requires a full refund plus accrued interest if held in an interest account. Target is clean turnovers.
Imposing a Claim (30 Days): Timeline is 30 days from move out. Action requires sending an itemized claim via Certified Mail containing required statutory text. Target covers physical damage, back rent, or unpaid utility fees.
1. The Clean Turnover (15 Day Window)
Suppose your tenant moves out, hands over the keys, and leaves the home in excellent shape with zero unpaid rent. Under Fla. Stat. § 83.49(3)(a), you have exactly 15 days from the date they vacate to return their full deposit along with any accrued interest if kept in an interest bearing account.
2. The Damage or Back Rent Claim (30 Day Window)
Now, what if you walk into the property and find broken drywall, ruined carpets, or an unpaid utility balance? Would a quick text message or an informal email suffice to let them know you are withholding funds? Absolutely not.
In this scenario, you have 30 days to issue a formal written notice detailing your intent to keep part or all of the deposit. Florida law strictly mandates that this notice must be sent by Certified Mail to the tenant forwarding address or last known mailing address. I often tell property owners to treat that certified mail receipt like pure gold because without it, proving you met your 30 day clock becomes nearly impossible.
What Happens if You Skip the Statutory Warning Language?
Here is a detail that continuously catches self managing landlords off guard: it is never enough to write a quick note stating, “I am keeping $500 for carpet repairs.”
Florida statute explicitly mandates that your notice include specific statutory warning language informing the tenant of their right to object within 15 days.What actually happens if you leave this mandatory wording out? Legally, the entire notice becomes invalid. That means you forfeit your right to retain the deposit and could end up paying the tenant legal fees under Fla. Stat. § 83.48 if they retain an attorney to contest your error.
I always think: Why risk losing thousands over a missed paragraph when the statute gives you the exact script to copy?
The 15 Day Tenant Objection Clock
Once the tenant receives your certified letter, the ball moves directly into their court:
If they do not object within 15 days: You are legally authorized to deduct the claimed amount from the deposit and return any remaining balance to them within 30 days of the original notice date.
If they object in writing: You now have a formal legal dispute on your hands. If that disagreement escalates into county court in Broward, Miami Dade, or Palm Beach County, a judge will review whether every single statutory notice rule was meticulously followed.
What Counts as Legitimate Deductions vs Normal Wear and Tear?
One of the most frequent friction points between landlords and departing tenants is deciding what damage justifies keeping deposit funds.
Before you start writing up your itemized bill, ask yourself: Is this issue the natural result of everyday human living, or does it represent actual property destruction and tenant negligence?
Permissible Deductions (Tenant Damage)
Unpaid rent, fees, or utility balances
Holes in drywall, broken doors, or cracked floor tiles
Pet damage such as scratched doors, carpet stains, or deep odors
Trash removal and heavy cleaning charges for abandoned personal property
Impermissible Deductions (Normal Wear and Tear)
Faded wall paint or small nail holes from picture frames
Minor carpet wear or light scuffs along high traffic hallways
Aging, worn door handles or standard cabinet hinges
Routine HVAC filter servicing or standard dust accumulation
Frequently Asked Questions for Florida Landlords
What if I completely miss the 30 day Certified Mail deadline?
If you miss the 30 day window, you automatically forfeit your right to retain the security deposit under Fla. Stat. § 83.49, meaning you must return 100 percent of the money to the tenant. Does this mean you are completely out of options if they wrecked your rental property? Not entirely. Missing the deposit deadline prevents you from holding onto their deposit money, but it does not prevent you from filing a separate lawsuit against the former tenant in court for breach of contract or physical property damage.
Does winning an eviction judgment mean I can automatically keep the deposit?
Surprisingly, no. Even if you secure a writ of possession in the 17th Judicial Circuit Court of Broward County, you remain legally bound to send the 30 day certified claim notice if you intend to apply the security deposit toward back rent or damages caused by the evicted tenant. I see landlords fall into this exact trap all the time assuming an eviction order wipes out their security deposit duties.
Can I include a clause in my lease waiving these notice rules?
No. Florida courts treat Fla. Stat. § 83.49 as a mandatory protection statute. Any clause inside a residential rental agreement that attempts to bypass, shorten, or alter these statutory notice timelines is considered legally null and void.
Protect Your Real Estate Investments with Legal Counsel
Whether you manage a single rental home in Coral Springs or an apartment complex in Fort Lauderdale, administrative slip ups during tenant move outs can cost you thousands in lost funds and legal fee awards.
The real estate litigation team at Reinfeld & Cabrera P.A.helps South Florida landlords, investors, and property managers enforce lease agreements, execute formal evictions, and navigate security deposit compliance smoothly.
Schedule a Property Law Consultation
Facing a tenant dispute or need assistance structuring legally compliant lease agreements? Speak directly with a South Florida real estate attorney today:
Coral Springs Office: 9625 W Sample Rd, Coral Springs, FL 33065
Fort Lauderdale Office: 2933 W Cypress Creek Rd, Suite 201, Ft Lauderdale, FL 33309
Website: mypersonalattorneys.com
Local Coverage: Coral Springs, Fort Lauderdale, Parkland, Tamarac, Margate, and surrounding communities across Broward, Miami Dade, and Palm Beach Counties.
In simple terms, an operating agreement governs the internal relationship between an LLC and its owners, while a franchise agreement governs the relationship between a franchisor and the business operating under its brand.
An operating agreement answers questions about who owns the LLC, who manages it, how decisions are made, how money is distributed, and what happens when an owner wants to leave.
A franchise agreement answers different questions. It establishes the conditions under which the business can use the franchisor’s trademarks and business system and may address royalties, operating standards, territory, suppliers, training, reporting, renewal, transfer, default, and termination.
A business can be subject to both agreements at the same time. The important question is therefore not which document is more important, but which relationship and legal issue the particular provision addresses.
Understanding that distinction is important before signing either document.
What Is an Operating Agreement?
An operating agreement establishes many of the rules governing a limited liability company and its owners.
Under Florida’s LLC statute, an operating agreement governs relationships among members, relationships between members and the LLC, the rights and duties of managers, the company’s activities and affairs, and the process for amending the agreement. Florida law also permits operating agreements to establish specific consequences when a member or transferee fails to comply with their terms.
An operating agreement may address:
Ownership percentages and membership interests
Capital contributions
Voting rights
Management authority
Allocation of profits and losses
Distributions
Member compensation
Restrictions on transferring ownership interests
Admission of new members
Death or incapacity of a member
Buyout procedures
Dispute resolution
Dissolution of the company
Procedures for amending the agreement
The operating agreement therefore deals primarily with how the LLC and its owners operate together.
It is also important to distinguish the operating agreement from the LLC’s liability protection. The operating agreement establishes contractual and governance rules. It is not itself what creates the legal distinction between the LLC and its members.
What Does an Operating Agreement Actually Control?
Consider two people who form an LLC to purchase and operate a restaurant.
Their operating agreement might establish that one member owns 60 percent and the other owns 40 percent. It might also determine who manages the company, which decisions require member approval, how profits are distributed, and what happens if one member wants to sell their interest.
Those are internal questions.
The agreement may become particularly important when the owners disagree.
In DiMauro v. Martin, a Florida Fourth District Court of Appeal case involving an LLC created to develop and sell a residence, the parties’ amended operating agreement established obligations involving the property, construction funding, capital contributions, membership interests, and the parties’ responsibilities. Litigation later arose over those obligations. The appellate court rejected the trial court’s conclusion that the operating agreement was unenforceable for lack of mutuality of remedy and consideration, although it ultimately affirmed the denial of specific performance on other grounds.
The practical lesson is that an operating agreement is not merely an administrative document kept in a corporate file. Its provisions can become important evidence of the parties’ rights and obligations when an LLC’s members disagree.
What Is a Franchise Agreement?
A franchise agreement addresses a different relationship.
A franchise agreement is a contract governing the relationship between a franchisor and a franchisee. It generally establishes the conditions under which the franchisee can operate a business associated with the franchisor’s brand and business system.
Federal regulations define a franchise based on three elements: the right to operate under the franchisor’s trademark or other commercial identifier, significant control or assistance concerning the franchisee’s method of operation, and a required payment to the franchisor or an affiliate.
A franchise agreement may address:
Use of trademarks and other intellectual property
Territory
Initial franchise fees
Royalties
Advertising contributions
Required products or suppliers
Training
Operating standards
Reporting requirements
Insurance
Renewal
Transfer of the franchise
Defaults and cure periods
Termination
Post termination obligations
Dispute resolution
Personal guarantees
A franchise relationship can also involve other documents. The Federal Trade Commission’s Franchise Rule requires covered franchisors to provide prospective franchisees with a Franchise Disclosure Document containing 23 specified categories of information. The FTC states that the FDD generally must be provided at least 14 days before the prospective franchisee is asked to sign a contract or pay money to the franchisor or its affiliate.
For that reason, a prospective franchisee should not evaluate the franchise agreement in isolation.
Operating Agreement vs. Franchise Agreement
The simplest distinction is the relationship each document governs.
Operating Agreement
Franchise Agreement
Governs an LLC
Governs a franchise relationship
Primarily concerns the LLC and its members or managers
Primarily concerns the franchisor and franchisee
Establishes internal ownership and governance rules
Establishes franchise rights and obligations
Addresses voting and management authority
Addresses operation under the franchisor’s brand and system
May establish capital contribution and distribution rules
May establish fees, royalties and advertising obligations
May restrict transfers of membership interests
May restrict transfers of the franchise
Addresses internal disputes among owners
Addresses disputes between franchisor and franchisee
May establish buyout and dissolution procedures
May establish renewal, default and termination procedures
The two documents can therefore apply to the same business without serving the same function.
Can a Franchise Business Have Both Agreements?
Yes.
This is one of the most important distinctions for a business owner to understand.
Imagine that Maria and David form Sunshine Coffee LLC.
Their operating agreement provides that Maria owns 60 percent of the company and David owns 40 percent. It establishes who manages the LLC, how major decisions are approved, how profits are distributed, and what happens if one member wants to sell an ownership interest.
The LLC then purchases a coffee franchise.
The franchise agreement may require Sunshine Coffee LLC to pay royalties, use the franchisor’s trademarks, follow operating standards, use approved suppliers, maintain insurance, complete required training, and comply with reporting requirements.
The two agreements answer different questions.
If Maria wants to sell her 60 percent ownership interest, the operating agreement may determine what happens inside the LLC.
If the franchisor alleges that Sunshine Coffee LLC violated its brand standards, the franchise agreement may determine the parties’ contractual rights.
A proposed transfer can involve both agreements. The operating agreement may govern the transfer of Maria’s membership interest, while the franchise agreement may require the franchisor’s approval or impose other conditions on the transfer.
The Business May Have More Than Two Important Documents
A franchisee may also have to consider a lease, financing documents, personal guarantees, equipment agreements, development agreements, confidentiality provisions, or other contracts.
In that case, franchise agreements were accompanied by personal guaranties, a $200,000 loan, and a promissory note. The franchisee’s dispute with the franchisor eventually included claims involving alleged representations about profitability, product quality, and the experience of the franchisor’s personnel. The Florida Second District Court of Appeal reversed dismissal of the franchisee’s counterclaim because the allegations were sufficient to support the claims at the pleading stage.
The court also addressed standing under the Florida Franchise Act. It explained that the person who invested in the franchise has standing under the statute, but the pleadings did not make clear whether the investment had been made by the franchisee entity, the individual, or both.
The same litigation continued into 2025, when the Second District Court of Appeal affirmed the lower court’s ruling in a subsequent appeal.
The practical lesson is important: the legal obligations surrounding a franchise may extend well beyond the basic franchise agreement.
What Happens When a Franchise Relationship Breaks Down?
The terms of a franchise agreement can become particularly important when the relationship between the parties deteriorates.
Case Study: Burger King Franchise Terminations
In Burger King Corp. v. Mason, a long running dispute between Burger King Corporation and a group of franchisees involved development agreements, at least 27 franchise agreements, financing arrangements, leases, supply accounts, royalties, and alleged defaults.
Burger King attempted to terminate all 27 franchises. After extensive litigation and multiple trials, the courts determined that some of the terminations were valid and others were not. In an earlier appeal, the Eleventh Circuit reported that the franchisees ultimately prevailed in nullifying the terminations of 14 franchises, while Burger King successfully defended the termination of 13.
The litigation also addressed what happened after properly terminated franchises continued using Burger King’s trademarks. The court held that continued use of the trademarks after valid termination could constitute trademark infringement.
This case demonstrates why provisions concerning default, termination, renewal, transfer, and trademark use after termination deserve careful attention before a franchise agreement is signed.
Does a Franchise Agreement Give the Franchisor Control Over the Entire Business?
Not necessarily.
Franchise agreements can impose substantial operating requirements while leaving the franchisee as an independently owned business.
In Ferrer v. Jewelry Repair Enterprises, Inc., the Florida Fourth District Court of Appeal considered whether a franchisor could be held responsible for an injury caused by the owner of a franchisee.
The franchise agreement required standardization of products and services and contemplated regular support from the franchisor. But the court found that the agreement did not give the franchisor substantial control over the franchisee’s day to day management. The franchisee remained an independently operated entity with authority over hiring and firing employees. The court therefore affirmed summary judgment for the franchisor.
The case illustrates an important point: franchise standards and franchisor control are not necessarily the same thing.
The specific language of the agreement can matter when a dispute later concerns responsibility for the franchisee’s conduct.
What Should You Review in an Operating Agreement?
Before signing an operating agreement, business owners should understand how it addresses situations that could create disagreements later.
Ownership
Who owns the LLC, and in what percentages?
Management
Who has authority to make ordinary business decisions? Which decisions require approval from other members?
Money
How are capital contributions, profits, losses, and distributions handled?
Transfers
Can a member sell or transfer an ownership interest freely, or must the other members or the company approve the transaction?
Death or Incapacity
What happens if a member dies or becomes unable to participate in the business?
Disputes
What happens if the owners disagree about a major business decision?
Exit and Dissolution
How can an owner leave the company, and what happens if the LLC ultimately needs to wind down?
Florida law gives operating agreements substantial flexibility, but that flexibility has statutory limits. For example, an operating agreement cannot eliminate certain duties or authorize conduct involving bad faith, willful or intentional misconduct, or knowing violations of law.
What Should You Review in a Franchise Agreement?
A prospective franchisee should approach a franchise agreement differently.
Important provisions may include:
Initial franchise fees
Continuing royalties
Advertising fees
Territory
Required suppliers
Equipment requirements
Training
Operating standards
Reporting requirements
Insurance
Renewal rights
Transfer restrictions
Default provisions
Cure periods
Termination rights
Post termination restrictions
Personal guarantees
Noncompetition provisions
Dispute resolution
The Franchise Disclosure Document should also be reviewed alongside the franchise agreement. The FTC advises prospective franchisees to review all 23 numbered items in the FDD and ask for clarification about information they do not understand before investing.
How Florida Law Applies to These Agreements
Florida law treats operating agreements and franchise agreements differently because they govern different relationships.
For LLCs, Florida Statutes section 605.0105 provides that an operating agreement governs relationships among members, between members and the LLC, the rights and duties of managers, the company’s activities and affairs, and procedures for amending the agreement. Florida law gives LLC members substantial flexibility to establish their own internal rules, subject to statutory limitations.
Franchise relationships involve both state and federal requirements. The FTC Franchise Rulerequires covered franchisors to provide a Franchise Disclosure Document containing 23 specified categories of information, generally at least 14 days before a prospective franchisee signs the agreement or makes a required payment. Florida law also addresses certain franchise related misrepresentations and provides remedies under section 817.416.
The practical distinction remains simple: the operating agreement governs the LLC’s internal affairs, while the franchise agreement governs the relationship between the franchisor and franchisee. A Florida business operating as a franchise may therefore need to comply with both.
Pay Particular Attention to the Exit Provisions
Business owners often focus on how they will open the business. The documents also need to address what happens when the relationship changes.
An operating agreement may determine what happens when an LLC member wants to leave, dies, becomes incapacitated, or wants to sell an ownership interest.
A franchise agreement may establish what happens when the franchisee wants to sell the franchise, fails to meet contractual requirements, seeks renewal, or faces termination.
These provisions can have substantial practical consequences.
A franchise agreement may also contain obligations that continue after termination, particularly concerning trademarks, confidential information, unpaid amounts, proprietary materials, and other protected aspects of the franchisor’s business system.
The Burger King litigation demonstrates why post termination provisions can matter. After certain franchises were properly terminated, continued use of Burger King’s trademarks became a separate legal issue.
“An operating agreement and a franchise agreement may govern the same business, but they answer very different questions. The operating agreement establishes how the owners and the LLC will function together. The franchise agreement establishes the rights and obligations between the business and the franchisor.”
Questions to Ask Before Signing Either Agreement
Before forming an LLC, purchasing a franchise, or doing both, a business owner should be able to answer several basic questions.
Who owns the business?
The operating agreement should make the LLC’s ownership structure clear.
Who controls the business?
The LLC’s management provisions and the franchise agreement’s operating requirements can address different aspects of control.
Who gets paid, and how?
An operating agreement may govern distributions among LLC members, while a franchise agreement may establish royalties and other payments to the franchisor.
What happens if someone wants out?
The operating agreement may govern the transfer of an ownership interest, while the franchise agreement may impose additional requirements concerning a transfer of the franchise.
What happens if the relationship breaks down?
Default, dispute resolution, buyout, renewal, and termination provisions can become extremely important once the parties disagree.
Are there personal guarantees?
An individual owner can sometimes take on obligations separately from those of the business entity. The franchise agreement and related documents should be reviewed carefully to determine whether a personal guarantee is required and what it covers.
Operating Agreements and Franchise Agreements Are Not Substitutes
An operating agreement does not replace a franchise agreement, and a franchise agreement does not replace an LLC’s operating agreement.
They solve different legal and business problems.
For an LLC, the operating agreement helps establish the rules governing ownership, management, decision making, financial arrangements, transfers, disputes, and other internal affairs.
For a franchise, the franchise agreement establishes the contractual relationship with the franchisor and addresses the conditions under which the franchisee may operate under the franchisor’s brand and business system.
A business that uses an LLC to operate a franchise may therefore need to understand both documents and how they interact.
For business owners in Coral Springs, Broward County, and throughout South Florida, reviewing these agreements before signing them can help identify provisions that may affect ownership, management, financial obligations, transfers, disputes, and the future of the business.
You may know someone who is a commercial litigation attorney, but have you ever found yourself wondering “what is commercial litigation?” As experienced commercial litigation lawyers ourselves, we at Reinfeld & Cabrera, P.A. are here to answer your questions on commercial litigation.
What is commercial litigation?
Let’s start with commercial law: commercial law, also known as a part of business law, applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales. Therefore, commercial litigation is any dispute which may arise in any business activities and which most often results in court proceedings to settle the issue. Usually these disputes are focussed on property or finances with some examples being corporate governance, banking transactions, mergers and acquisitions.
Why is commercial litigation necessary?
During the day-to-day events of any business, many legal matters may arise and need to be dealt with. Because commercial industries fall under both private and public law, these legal matters are of utmost importance to the smooth running and wellbeing of your business. As any business owner, large or small, will know, you cannot run a business without finances and paperwork. Things like taxes, employee contracts and property rental agreements are all legal matters and any number of issues may arise in these areas when running a business. So it is important for any issue either to be avoided through well drawn-up contracts and negotiations or to be dealt with quickly and efficiently in court to avoid growing expenses and wasting business hours on the problem.
What does a commercial litigation lawyer do?
The aim of a commercial litigation attorney is primarily to represent you and your business in a court of law during a commercial litigation case. However, a commercial litigation attorney can be tremendously useful when consulted beforehand to try to avoid ever having to go to court (as this may turn into a costly experience). They are extremely knowledgeable and skilful in all aspects of commercial law. A good commercial litigation attorney will be able to guide you through any and all aspects of your business which may fall under the wing of commercial law.
Do I need a commercial litigation attorney?
The short answer is: if you have a business or partake in any business dealings, yes. The long answer: a commercial litigation attorney can help you in all legal business matters in or out of court. These may include a breach of contract, sales disputes, contract negotiation and preparation. And whether your business is a brand new small start-up business or a massive multi-national corporation, chances are you will eventually need a good commercial litigation attorney.
So now that you know a bit more about commercial litigation, you can see the importance of knowing a good commercial litigation attorney. If you don’t already know one, let Reinfeld & Cabrera give you a free consultation and never worry about commercial litigation again.
There is something different about dealing with a family business. The people answering the phone may know the people making the decisions. The person whose name is on the door may still be around when you have a question six months later. And when something goes wrong, there usually isn’t an impressive chain of departments available to explain why nobody knows who is responsible.
A family owned law firm can have some of those same characteristics.
That does not make family ownership a substitute for legal experience. If you need an attorney in Coral Springs, you still want someone who knows the relevant area of Florida law. You need someone who understands your particular problem, and can explain what your options actually are. The fact that a law firm is owned by a family does not magically accomplish any of those things.
What it can change is the relationship you have with the firm.
What Does Family Owned and Operated Actually Mean?
In a family owned and operated business, the people behind the company have a personal connection to what happens there. Their reputation is attached to the business. Their relationships with clients can continue for years. And the people who own the firm may also be involved in the day to day work.
For a law firm, that can be valuable. Legal matters are rarely as simple as handing someone a document, collecting a fee, and saying goodbye. A client may have questions later, another legal issue may come up. Perhaps a matter that seemed straightforward at the beginning may take an unexpected turn. Knowing who to call can make a real difference.
This is one reason some people prefer working with family owned businesses. They want to know who they are dealing with. People want to have a sense that the relationship matters to the people on the other side of the desk.
A Relationship That Can Continue Over Time
For clients in Coral Springs and throughout Broward County, that kind of relationship can be useful. Especially when legal needs extend over ongoing estate planning and business succession strategies with a local family in Broward County.me. Estate planning, probate, real estate transactions, business matters, and other legal issues can bring people back to the same law firm at different stages of their lives. Having attorneys who already understand the background can save everyone from starting the story from page one.
There is also a practical advantage to knowing how a firm is structured. Before hiring any attorney in Coral Springs, it is reasonable to ask who will actually handle your matter. You want to see how directly you can communicate with the attorney. There needs to be consistency – and whether the same people will remain involved as the case or transaction develops.
Those questions matter regardless of whether a firm is family owned. But they can be especially relevant when a firm’s owners are also actively involved in its work.
Managing Local Legal Matters Across Broward County
For families and business owners living in Coral Springs, Parkland, Fort Lauderdale, and surrounding South Florida communities, legal challenges rarely exist in a vacuum. An estate planning decision can directly impact a commercial real estate holding, and a family business succession plan can intersect directly with probate or guardianship administration.
Working with an established local firm means your legal team understands the specific procedural tendencies of the 17th Judicial Circuit Court and regional municipal codes. Rather than treating your matter as a routine transaction processed by an anonymous case manager in a distant corporate hub, a boutique local practice evaluates how your legal choices affect your daily life, your business balance sheet, and your long term family security in Broward County.
Family Businesses Understand Some Familiar Problems
Family ownership can also matter to people who run their own businesses. A family owned business often understands that legal decisions can affect relationships as well as balance sheets. Ownership, contracts, real estate, succession planning, and disputes can sometimes overlap with personal concerns.
For business owners in Coral Springs and the surrounding Broward County community, having a law firm that understands that overlap can be useful.
Family Owned Does Not Mean Every Firm Works the Same Way
None of this means that every family owned law firm operates in exactly the same way. Some are small. Many have several attorneys and staff. Some owners are heavily involved in client matters, while others have a more traditional management role. The label itself tells you only part of the story.
The better question is what the firm’s family ownership actually means for you as a client.
You can look at the firm’s practice areas and experience, but you can also ask how the attorneys work, who you will deal with, how communication is handled, and whether the firm is built around relationships that continue after one legal matter is finished.
You Know Who You Are Calling
One of the less glamorous advantages of a family owned law firm is also one of the easiest to appreciate: knowing who you are dealing with.
When a legal issue comes up, clients generally do not want to spend half their morning explaining the same situation to a new person. They want to reach someone who knows the matter, understands the history, and can tell them what happens next.
A family owned and operated firm can be well suited to that kind of continuity. The attorneys who own the business may remain closely involved with clients and their legal matters over time. For someone dealing with an estate, a property transaction, a business concern, or another ongoing legal issue, having a familiar point of contact can make the process considerably easier to navigate.
It also gives clients an opportunity to develop a relationship with the attorneys they rely on. You may initially contact a lawyer about one issue and return years later with another. By then, you are no longer starting with a blank page. The attorney may already understand your circumstances, your priorities, and the history behind the new question.
Direct Attorney Accountability Versus Corporate Law Factories
The modern legal landscape is increasingly dominated by large institutional law firms featuring multi tiered phone trees, layers of paralegals, and shifting case managers. When clients call with urgent questions about a probate timeline or a real estate closing, they are often forced to re-explain their entire situation to a stranger.
A family owned law firm operates on a completely different model of accountability:
Direct Communication Lines: You speak directly with the attorneys whose names are on the door and who actively manage your legal filings.
Institutional Memory: Because the firm builds multi generational relationships with local families, your historical legal context is preserved for future needs.
Aligned Interests: The firm’s local reputation in Northwest Broward County depends entirely on transparent communication, reliable case preparation, and dedicated client advocacy.
Talk With Our Attorneys
If you are considering a family owned law firm in Coral Springs, the easiest way to see whether the relationship feels right is to have a conversation.
What are the differences between LLCs and corporations in Coral Springs? This may seem like a complicated question but that is why we at Reinfeld & Cabrera P.A. are here to help you decide which business model best suits your needs.
To help you get your head around things it is important to remember that corporations in Coral Springs can be broken down into S corporations and C corporations.
The most important difference between S corporations and C corporations, simply put, is based on taxation. C corporations have one tax, on a corporate level, on its net income, and another tax to the shareholders when distributions are made. In contrast, S corporations have only one level of taxation and all of their income is allocated to the shareholders. In spite of this C corporations have better tax planning flexibility and have the ability to protect shareholders from direct tax liability. S corporations, on the other hand, are restricted by limitations, such as the number and type of shareholders they can have (no more than 100 shareholders, and shareholders must be US citizens/residents). C corporations have no restrictions on ownership.
Now that you know the basic differences between S corporations and C corporations, lets move on to understanding what LLCs are. LLC stands for Limited Liability Company. LLCs combine the corporate advantage of limited liability protection with the partnership advantage of pass-through taxation. Thus the LLCs income is not taxed at the entity level; however, if the LLC has more than one owner a partnership return should, in general, be completed. Income or loss is passed through the LLC and reported on owners’ individual tax returns.
When considering incorporating a small business in Florida, LLCs or S corporations are arguably top choice. Therefore we have decided to break down the differences between these two formations for you.
Firstly LLCs cannot issue stock. Instead they offer “memberships.” In contrast S corporations can issue stock and are owned by the shareholders. Secondly members or hired managers directly manage their LLCs. In comparison directors and officers manage S corporations. S corporations have certain restrictions that are not applicable to LLCs. One such example is that S corporations are limited to 75 shareholders, while LLCs are not restricted in their number of members. Finally while LLCs have a limited life span of approximately 30 years, S corporations have an unlimited life span.
With all this in mind, you should have just enough information to begin the process of incorporating your business. With the help of experienced attorneys such as Reinfeld & Cabrera P.A. the differences between LLCs and Corporations should be but a small hurdle on your road toward success.
Thinking about buying a business and becoming a first time commercial owner in Florida? Look no further than Reinfeld & Cabrera, P.A. as we have put together a quick guide of basic advice and information that you will need when buying a business and becoming a first time commercial owner in Florida.
The Florida Business Corporation Act (FBCA) is massive legal ‘instruction manual’ that many first time commercial business owners in Florida find confusing at best. Add to this the Sarbanes–Oxley Act (SOX), and buying a business and becoming a first time commercial owner begins to look more than overwhelming.
To put your mind at ease leave the complicated legal jargon to professionals like Reinfeld & Cabrera, P.A. and take a look at the top tips that many first time commercial business owners in Florida wish they had known before buying a business.
Select and prioritize: Managing multiple business enterprises at once will inhibit your effectiveness and productivity. Focus on one thing, perfect it, and build on that.
Do what you love: A business developed around something that you are personally interested in will stand a greater chance of success. Maximize on your strengths and talents. You will shine.
Be concise in your pitch: Always be ready to pitch your business. However keep it to the point and remember less is more.
Do not be a know-it-all: Know where your knowledge lacks and revert to advisors and mentors who will fill in the gaps and assist you in becoming a better businessman.
Be frugal: Learn to manage your cash flow effectively. Consult with mentors and advisors. Make sure you have a handle on your expenses and income.
There is no such thing as the perfect plan: Making mistakes are all part of the adventure. The ability to learn from your mistakes is what will mould you into a successful businessman.
Know when it’s time to quit: If your business doesn’t work out don’t panic. Reflect on the pitfalls and mistakes and use them to guide you in your next business venture. Just remember failure is to be expected, but a true entrepreneur will overcome hardship.
While this is not a definitive list of advice, these are 7 tips to get you started.
With all the legal protocol surrounding buying a business and becoming a first time commercial owner in Florida, it is essential that you choose attorneys who will look after the best interests of you and your new business while providing your company with outstanding representation in the commercial world. Choosing attorneys, such as Reinfeld & Cabrera, P.A. allows you the peace of mind to focus on the things that have inspired you in buying a business and becoming a first time commercial owner in Florida.
A contract is one of the most frequent legal transactions that you will be involved in at any one point in your adult life. No matter what situation you find yourself in that requires a contract, having a basic understanding of contract law is crucial in building solid agreements that will be legally enforceable should a disagreement crop up.
In a nutshell a contract is an agreement that is legally enforceable between two or more parties. The word party includes an individual person, company, or corporation. Contracts made in Coral Springs are governed and enforced by laws in Florida. With this basic definition in mind here is a run down of the overall benefits of having a contract.
Having a watertight contract leaves you open to get right in and do the job itself without worrying about all the legal issues. A few of many benefits of having a contract include; protection for both parties should a dispute arise; ensuring that the agreement entered into by parties is fair; and that all details of the agreement are explicit – this includes that all definitions are stated and agreed to by all parties to the contract. In other words making sure that everybody is on the same page. Therefore if things do go wrong it is always a good idea to have all your bases covered and to make sure that the relationship between both parties is clearly defined in a contract.
A further benefit to having a contract drawn up is that written agreements are far easier to put into effect and enforce than verbal agreements. A professionally drafted contract will be a physical reference point that you can revert to in moments of need. Moments of need include; disputes between parties; recalling important details; or a means of orientation for newcomers to the agreement.
If all of the above factors have still not convinced you that a contract is nothing but beneficial then perhaps the idea of you being the master and commander of your agreement will grab your attention. If you don’t have a written agreement local and state laws will dictate some of the rules for your agreement. If a dispute arises which has not been covered by a written contract, the issue may be taken to court to be resolved. This could leave you on the short end of a very costly stick.
So, under what circumstances do we recommend that you make use of a contract? From rental agreements, business partnerships, and employment contracts, to contracts of sale, prenuptial agreements, and wills, the list is truly endless.
The laws governing contracts in Coral Springs can become overwhelming however, experienced attorneys, such as Reinfeld & Cabrera P.A. are always here to help you.
Two people can have the same business idea and end up with very different legal problems.
Imagine two friends opening a design company in Coral Springs. They agree to split everything 50/50 and decide to form an LLC. The filing takes care of the immediate problem: the company now exists.
It does not answer what happens if one of them puts in more money. Or stops working. Or wants to sell his share. Perhaps he dies. Or decides that the company should be sold while the other wants to keep it.
Those are business formation questions too.
The Florida Department of State recorded 561,143 new domestic LLC filings in 2025, and its most recent quarterly figures show more than 3 million active Florida LLCs. There are more than 4.1 million active business entities of all types in the state.
There is nothing unusual about forming an LLC in Florida.
The filing itself is usually straightforward. Deciding what the company should look like, who should own it, how it should operate, and what happens when circumstances change can require considerably more thought.
What Do You Need to Decide Before Forming a Business in Florida?
Start with the people involved.
If you are forming a business by yourself, many of the ownership questions are relatively simple. If there are two, three, or ten owners, they become part of the legal structure.
Who owns the company?
Who makes decisions?
Where does the money come from?
Who contributes equipment, intellectual property, or work?
Can one owner sell an interest without the others agreeing?
What happens if an owner wants to leave?
What happens if the business loses money?
Those questions do not appear on a basic Sunbiz filing form.
They still need answers.
The choice of entity comes after some of those questions, not before them.
Florida recognizes several forms of business organization, including corporations, limited liability companies, partnerships, limited partnerships, and limited liability partnerships.
For many small businesses, the main discussion will be whether an LLC or corporation makes sense. That is a legal and tax decision, not a matter of choosing whichever form happens to be most popular.
Should You Form an LLC or a Corporation?
There is no universal answer.
An LLC and a corporation have different rules governing ownership, management, transfers, and other aspects of the business. Their federal tax treatment can also differ.
An LLC with one member is generally treated by the IRS as a disregarded entity for federal income tax purposes unless it elects corporate treatment. A domestic LLC with two or more members is generally treated as a partnership unless it elects to be treated as a corporation.
A corporation is a different legal structure, with shares, directors and officers forming part of its statutory framework.
That does not mean a corporation is inherently more sophisticated or an LLC is inherently better for a small business. The appropriate structure depends on what the owners are trying to accomplish.
An attorney and accountant may also need to look at the same proposed business from different angles. The attorney is concerned with the legal structure and documents. The accountant is concerned with tax treatment and financial consequences. Those questions overlap, but they are not the same question.
What about a partnership?
Partnership structures can also be appropriate in some circumstances. Florida has statutes governing general partnerships, limited partnerships, and limited liability partnerships.
The point is not that every entrepreneur needs a tour through every entity available under Florida law.
It is that “LLC or corporation?” is sometimes too early a question.
First figure out what the ownership and business arrangement actually looks like.
“I like to know what the owners expect the business to look like before we start talking about forms. A company with one owner and a company with four owners may both be called an LLC, but the legal questions can be completely different.”
How Do You Choose a Name for a Florida Business?
The name has to work legally as well as commercially.
For a Florida LLC, the name must be distinguishable on the records of the Department of State and must contain an appropriate designation such as “LLC.” A Florida profit corporation has its own naming requirements and must likewise use a distinguishable name. The state recommends searching its records before filing.
There is an important qualification to the old idea that another business simply cannot have “the exact same name.”
The state’s naming rules concern whether a proposed name is distinguishable on its records. That is a narrower question than whether nobody anywhere has rights in the name.
A Sunbiz search is not a trademark search.
That distinction becomes important if the business will spend substantial money on a brand, website, signs, advertising, packaging, or other intellectual property.
What if the business uses another name?
Florida also allows registration of a fictitious name, commonly called a DBA, when a person or business operates under a name different from its legal name. The registration is intended to tell the public who is conducting business under that name. It does not give the registrant ownership of the name or prevent someone else from registering or using it.
So there are several different concepts that people often lump together:
The legal name of the entity.
A fictitious or DBA name.
Trademark rights.
They are not interchangeable.
How Do You Form an LLC in Florida?
A Florida LLC is formed by filing Articles of Organization with the Division of Corporations.
The filing identifies the LLC and its registered agent and provides other information required by Florida law. The registered agent must have a physical street address in Florida.
The current filing instructions also make something important clear: the Division of Corporations is an administrative filing agency. It does not provide legal, accounting, or tax advice, and it recommends that legal counsel review formation documents when appropriate.
That tells you something about the limits of the filing process.
The state can process your Articles of Organization. It does not decide whether the ownership arrangement between you and your business partner is sensible.
How Do You Form a Corporation in Florida?
A Florida profit corporation is formed by filing Articles of Incorporation.
The document includes the corporation’s name, principal office, registered agent and other required information. A corporation must also identify the number of shares it is authorized to issue.
Again, the terminology matters.
LLC: Articles of Organization.
Corporation: Articles of Incorporation.
The two entities also operate under different statutory frameworks after formation.
The Florida Department of State specifically recommends legal review of Articles of Incorporation when the circumstances call for it.
That can be particularly relevant when the corporation will have several shareholders, unusual ownership arrangements, outside investors, or other provisions that go beyond the minimum filing requirements.
Do You Need an EIN for a Florida Business?
The answer depends on the business.
The IRS treats a single member LLC differently from a multi member LLC for federal income tax purposes. A single member LLC that has not elected corporate treatment is generally disregarded for federal income tax purposes. A multi member domestic LLC is generally treated as a partnership unless it elects otherwise.
That does not mean a single member LLC can simply ignore EINs.
The IRS says an LLC will need an EIN if it has employees or certain excise tax obligations. A single member disregarded LLC that does not have those obligations may not need an EIN for federal income tax purposes, although it may still obtain one for purposes such as opening a bank account or satisfying another requirement.
The old rule that a corporation “definitely” needs an EIN while an LLC simply gets to choose is therefore too crude.
The entity, its tax classification, its employees, and its activities all matter.
What Licenses and Tax Registrations Does a Florida Business Need?
There is no single Florida business license that covers every company.
The requirements depend on what the business actually does.
A business selling taxable goods or services may have to register with the Florida Department of Revenue before beginning those activities. The Department provides an online registration system that determines applicable tax registrations based on information about the business.
Other businesses may have professional licensing requirements, industry specific permits, local requirements, or regulations tied to their location.
A restaurant and a software consultant can both be Florida LLCs. Their regulatory obligations can be very different.
That is why “get your business license” is not much of a checklist.
The useful questions are:
What does the business sell?
Where does it operate?
Does the industry require a professional or occupational license?
Can the business collect a tax that requires registration?
Does the local government impose additional requirements?
Those questions produce a much more accurate answer.
What Documents Should Business Owners Have?
The state filing establishes the entity. It does not necessarily establish the relationship between its owners.
This becomes especially important with a multi member LLC.
Florida law expressly recognizes operating agreements and allows people who intend to become LLC members to make an agreement that will become the company’s operating agreement when the LLC is formed. The operating agreement governs important aspects of the company’s internal relationship.
An operating agreement can address issues such as:
Ownership percentages
Management
Voting
Contributions
Distributions
Transfers of ownership
Admission of new members
Withdrawal of a member
Events affecting the business when a member dies or becomes unable to participate
Procedures for resolving disagreements
Not every LLC needs the same document.
A one person consulting business does not present the same problems as a four person company whose owners are contributing different amounts of money and labor.
A Florida LLC Dispute Shows Why the Agreement Matters
In Dinuro Investments, LLC v. Camacho, a dispute among members of an LLC reached the Third District Court of Appeal. The case concerned when an individual LLC member could bring claims against other members in an individual capacity rather than bringing a derivative action on behalf of the company. The court adopted a framework distinguishing direct injuries from injuries belonging to the LLC itself and also recognized the importance of contractual or statutory duties owed directly to a member.
The case involved a real estate development company, not a hypothetical neighborhood startup.
That is useful precisely because disputes between owners do not stay theoretical for long once money and contractual rights are involved.
The operating agreement can become one of the documents the lawyers have to examine when trying to determine what the members agreed to and what rights they have.
Proposed quote — Stuart Reinfeld: “Two people can be completely comfortable with a 50/50 arrangement when the business is making its first dollar. The harder conversation is what happens when they disagree about the hundred thousandth dollar.”
What Happens After the Business Is Formed?
This is where the old six step checklist stopped too early.
Once the entity exists, the owners still have to run it.
Depending on the business, that can include:
Obtaining an EIN
Opening business banking and accounting systems
Establishing ownership and management records
Adopting an operating agreement or corporate governance documents
Obtaining licenses and permits
Registering for applicable Florida taxes
Preparing contracts
Hiring employees and addressing employment requirements
Maintaining the registered agent
Filing annual reports
Florida LLCs must file annual reports to maintain active status. The filing period runs from January 1 through May 1 of the applicable year, and failure to file can result in administrative dissolution. Corporations have the same basic annual reporting requirement.
The annual report is not a financial statement. It updates the state’s records about the entity.
That is a small administrative obligation with a very concrete consequence if it is ignored.
The company can disappear from the state’s active records even though the owners are still thinking about it as an operating business.
Why Should Business and Personal Finances Be Kept Separate?
Someone forming an LLC or corporation is creating a separate legal entity. The way the business is actually operated should reflect that.
That includes maintaining appropriate financial records and avoiding the casual mixing of company and personal money.
Florida courts have recognized the separate nature of business entities while also addressing circumstances in which members or shareholders seek to impose liability on individuals behind the entity.
In Dinuro, for example, the Third District discussed the limited liability associated with an LLC and the distinction between claims belonging to the company and claims belonging directly to an individual member.
There is no magic bank account that makes an owner immune from personal liability.
There is also no good reason to make the company’s records harder to understand than they need to be.
If the business buys equipment, the records should show who bought it.
Perhaps an owner puts money into the company, the transaction should be documented appropriately.
If the company signs a contract, the correct legal entity should be identified.
These are ordinary business practices. They also become very important when an owner later has to explain what happened to the company’s money or property.
What Can Go Wrong When Business Partners Do Not Plan Ahead?
Consider a common situation.
Two friends form an LLC. One contributes $100,000. The other contributes less money but works full time in the business. They decide to own the company equally because, at the time, that feels fair.
Three years later, the business is profitable.
The working owner believes his contribution should give him greater control. The other owner believes the original 50/50 agreement is still the agreement.
Neither is necessarily behaving irrationally.
They simply reached the point where the assumptions they made at the beginning no longer answer the questions they now have.
That is the sort of problem an operating agreement can address before the dispute exists.
Florida’s appellate courts have dealt with similar questions in actual LLC disputes. In Demir v. Schollmeier, the Third District considered an agreement between LLC members and concluded that the agreement governed their relationship even though it was not titled an “operating agreement” and was not executed at the time the LLC was originally formed.
The case involved a particular dispute and particular contractual language. It does not mean that every informal agreement between business partners will produce the same result.
It does illustrate why the arrangements between owners deserve attention when the company is being created.
When Should You Talk to a Business Attorney?
You can form a Florida business through the state’s online filing system without hiring a lawyer to click the buttons for you.
The harder question is whether the business has legal decisions that deserve advice before those buttons are clicked.
That is particularly true when:
There are multiple owners
Owners are contributing different amounts of money or labor
The business will have investors
Ownership may change
The business involves intellectual property
The company will own significant property
The owners are family members
The business is buying another company
The company will enter substantial contracts
A professional license is involved
The owners want restrictions on transfers
The business may eventually be sold
The owners have different ideas about management or control
In those circumstances, the formation documents are only part of the legal work.
The attorney may need to look at the proposed ownership structure, operating agreement, contracts, licensing requirements, intellectual property, real estate, or other issues before the business begins operating.
“The state filing tells you that the entity exists. It does not tell you whether the arrangement between the people who own it will work. That is usually where the more interesting legal questions begin.”
Frequently Asked Questions
How do I form a business in Florida?
You generally begin by choosing an appropriate legal structure, selecting a name, designating a registered agent, and filing the required formation documents with the Florida Department of State. The business may also need tax registrations, licenses, permits, and internal ownership or governance documents.
Is an LLC or corporation better for a Florida business?
Neither is automatically better. The appropriate structure depends on ownership, management, taxation, financing, liability considerations, and the way the owners expect the business to operate.
What is the difference between Articles of Organization and Articles of Incorporation?
Articles of Organization are used to form a Florida LLC. Articles of Incorporation are used to form a Florida profit corporation.
Do I need an EIN for a Florida LLC?
It depends on the LLC’s circumstances and federal tax classification. A single member LLC that is disregarded for federal income tax purposes may not need an EIN solely for federal income tax reporting if it has no employees and no applicable excise tax obligations, although an EIN may still be needed or useful for other purposes.
Do I need a business license in Florida?
There is no single license required for every Florida business. Requirements depend on the business activity, industry, location, and applicable state or local rules.
What happens after I form an LLC in Florida?
The owners may need to obtain an EIN, establish business banking and accounting procedures, prepare an operating agreement, obtain licenses and permits, register for applicable taxes, and maintain the entity’s state records and annual filings.
Does a Florida LLC need an operating agreement?
Florida law recognizes operating agreements as governing documents for LLCs. Whether a particular business needs a detailed agreement depends on its circumstances, but an operating agreement can establish important rules concerning ownership, management, transfers, and the relationship among members.
Can I use a different name from my company’s legal name?
Yes. A Florida business can generally register a fictitious name, commonly called a DBA, when it operates under a name different from its legal name. The registration does not give the business exclusive ownership of that name.
Starting a Business in Coral Springs or Broward County
Someone opening a business in Coral Springs deals with the same Florida entity laws as someone forming a company elsewhere in the state.
The local details can still matter.
A business may have a physical location, employees, professional licensing requirements, local regulatory issues, or tax and registration obligations connected to where it operates. A company working from a home office can have a different set of practical issues from a restaurant, medical practice, construction company, or retail store.
For business owners in Coral Springs and throughout Broward County, the formation decision should therefore account for the business that actually exists rather than an imaginary generic “Florida business.”
That is also why two businesses that both file as LLCs can need very different legal documents.
Talk With a Florida Business Attorney
If you are forming a business in Coral Springs, Broward County, or elsewhere in Florida, Reinfeld & Cabrera, P.A. can review the proposed structure, ownership arrangement, formation documents, and other legal issues involved in setting up the company.
A consultation can also be useful when the basic filing is straightforward but the relationship between the owners, the company’s contracts, its property, or its future plans raises questions that a state filing form cannot answer.
This article provides general information about Florida business formation and is not a substitute for legal, tax, or accounting advice concerning a particular business.
A business does not have to accept an unpaid invoice as the cost of doing business.
When another company, customer, contractor, or client stops paying, the first step is usually figuring out exactly what is owed, why it is owed, and what evidence supports the claim. From there, a creditor may negotiate payment, send a formal demand, pursue a lawsuit, or, if a judgment is obtained, use Florida’s judgment enforcement procedures to pursue available assets.
There is an important difference between winning a debt case and collecting the money.
A judgment establishes a legal obligation. It does not automatically put a check in your company’s bank account.
Florida’s courts handle an enormous civil caseload. The state’s 2023-24 statistical report shows nearly 2.4 million county civil filings statewide, including small claims and other county civil matters. Florida’s trial courts as a whole manage more than two million civil case filings annually.
Business debt collection is only one part of that system, but the basic lesson is useful: a claim for money needs to be treated as a legal claim, not merely as an increasingly irritated series of emails.
What Should You Do When a Business Owes You Money?
Start by establishing the debt.
Look at the contract, invoice, purchase order, delivery records, emails, payment history, account statements, and any other documents showing what was agreed and what happened afterward.
Ask a few straightforward questions:
What did the debtor agree to pay?
What did your business provide?
When was payment due?
How much has been paid?
What remains outstanding?
Has the debtor disputed the amount or the underlying work?
Does the contract contain provisions concerning interest, attorney’s fees, venue, or dispute resolution?
Did anyone personally guarantee the obligation?
That last question can become important.
If the customer is an LLC or corporation, the company’s debt does not automatically become the owner’s personal debt. A creditor needs a legal basis for pursuing an individual separately, such as a guaranty or another applicable theory of liability.
That is one reason the paperwork deserves attention before anyone starts threatening to sue.
What Evidence Do You Need to Collect a Business Debt?
A creditor’s strongest evidence often consists of ordinary business records.
A signed contract is useful. So are invoices showing the amounts due, records showing that goods were delivered or services were performed, correspondence acknowledging the balance, and payment records showing what happened afterward.
Sometimes there is no single document that tells the whole story.
Florida recognizes an account stated claim in appropriate circumstances. The Florida Supreme Court has explained that an account stated depends on an agreement concerning the amount owed and an obligation to pay that amount.
Florida’s standard jury instructions describe an account stated as involving transactions for which a specific amount is due and note that an account statement is not automatically conclusive if evidence establishes fraud, mistake, or error.
So an unpaid invoice should not be treated as magic evidence.
A debtor can dispute what was billed, whether the work was completed, whether the goods were delivered, whether the amount is correct, or whether the person receiving the invoice had authority to incur the obligation.
The more clearly the business can reconstruct the transaction, the easier it becomes to evaluate the claim.
Should You Send a Demand for Payment Before Suing?
Often, yes.
A demand letter can identify the amount claimed, explain the contractual or factual basis for the debt, establish a deadline for payment, and give the debtor an opportunity to resolve the matter before litigation.
It can also reveal what the actual dispute is.
A company that responds, “We agree that we owe $40,000 but need 90 days” presents one problem.
A company that responds, “Your employees never completed the work and we owe nothing” presents another.
And a company that stops answering altogether presents yet another.
The demand process therefore has a practical purpose beyond giving someone one final chance to pay.
It can help establish what the parties actually disagree about.
Can You Sue a Business for an Unpaid Debt?
Yes, when the facts support a legally recognized claim.
The appropriate cause of action depends on the transaction. A creditor may have a breach of contract claim, an account stated claim, an open account claim, or another theory depending on the circumstances.
The contract itself can also determine what remedies are available.
Florida law generally gives five years to bring a legal or equitable action founded on a written contract or other liability founded on a written instrument. The limitations period is different for various other types of claims, including claims based on unwritten obligations.
That makes one piece of advice particularly important:
Do not assume you have plenty of time because the debtor keeps promising to pay.
A business can spend months or years hearing variations of “the check is coming” while the legal clock continues to run.
A recent Florida case illustrates the problem.
An Unpaid Legal Bill That Stayed Unpaid for Years
In LAD Commercial, LLC v. Eagle Trace at Vero Beach Homeowners’ Association, Inc., the Fourth District Court of Appeal considered a breach of contract claim arising from unpaid legal services.
The invoices totaled $20,179.08. The alleged unpaid work dated back years, and the defendant argued that the claim was barred by the statute of limitations. The litigation ultimately required the appellate court to examine when the cause of action accrued and how the contract’s payment provisions affected that analysis.
The lesson is not that every unpaid invoice becomes a statute of limitations dispute.
It is that waiting can turn a collection problem into a limitations problem.
What If the Debtor Disputes the Debt?
Then the case needs to be analyzed rather than treated as a simple collection matter.
Suppose a contractor invoices a business for $75,000. The business refuses to pay and says the contractor abandoned the project.
Now there are factual questions:
Was there a contract?
What work was required?
What work was actually completed?
Were there change orders?
Did the customer approve them?
Was the work defective?
Did the customer terminate the contract?
What damages did either side suffer?
The invoice alone cannot answer those questions.
Commercial litigation often turns on reconstructing the transaction from the documents and testimony rather than simply proving that an invoice exists.
Can You Sue the Owner of an LLC Personally?
Not merely because the LLC owes the money.
An LLC is a separate legal entity, and the existence of a business debt does not automatically create personal liability for its members.
A personal guaranty can change that.
So can other circumstances, depending on the facts and applicable law.
This is an area where careless collection advice can create a serious problem. A creditor should identify the actual legal basis for pursuing an individual instead of assuming that the person who owns the company and the company itself are interchangeable.
If the contract says that the company’s owner personally guarantees payment, that provision deserves close examination.
If there is no guaranty, the analysis is different.
What Happens If You File a Business Debt Lawsuit?
The case moves into the ordinary civil litigation process.
Depending on the claim and amount involved, that can include:
Filing the complaint
Serving the defendant
Receiving the defendant’s response
Conducting discovery
Negotiating a settlement
Resolving motions and disputed legal issues
Preparing for trial if necessary
Obtaining a judgment
Florida’s civil procedure system was significantly updated beginning January 1, 2025. The changes emphasize active case management, deadlines, initial discovery disclosures, supplementation, and discovery proportional to the needs of the case.
That does not mean every unpaid invoice will turn into a dramatic courtroom battle.
Many cases settle.
Some are resolved through motion practice.
Some proceed to trial.
And some defendants simply fail to respond, creating a different procedural situation.
The important point is that filing a lawsuit starts a legal process. It does not mean the creditor can immediately take the debtor’s property.
What Happens After You Win a Judgment?
This is the part that the old article barely addressed.
A judgment is not the same thing as payment.
Florida law provides several mechanisms for enforcing money judgments.
Under Florida Statute § 77.03, a judgment creditor can seek a writ of garnishment after obtaining a judgment. Garnishment can reach certain money or property held by a third party for the judgment debtor, subject to the requirements and limitations of Florida law.
Florida’s execution statutes also provide for levy and sale of certain property to satisfy a judgment. Section 56.061 identifies categories of property subject to execution, including certain real and personal property and corporate stock.
Florida also permits a judgment creditor to acquire a judgment lien on certain personal property, including property subject to execution and certain payment intangibles and accounts.
Those remedies can matter when a debtor has assets but simply refuses to pay.
They also have limits.
Property may be exempt. Other creditors may have priority. Secured creditors may have existing rights. Bankruptcy can change the situation entirely.
A judgment gives the creditor legal leverage and enforcement tools. It does not create assets that do not exist.
Can You Garnish a Business Bank Account?
Potentially, but garnishment has a specific legal procedure.
Florida Statute § 77.03 provides for issuance of a writ after judgment. Florida law also permits pre-judgment garnishment in certain circumstances, but the requirements are considerably more specific. Section 77.031 requires a verified motion or affidavit containing particular factual allegations, including the nature and amount of the claim and why the plaintiff believes the defendant will not have sufficient property available for execution.
That is a good example of why “just garnish their account” is not legal strategy.
There is a procedure.
There are requirements.
And there may be defenses and exemptions.
What If the Debtor Has Assets but Still Refuses to Pay?
Florida’s judgment enforcement statutes give creditors tools for investigating and reaching certain property.
Chapter 56 includes proceedings supplementary, which can be used in appropriate circumstances after a judgment. Florida law also addresses discovery concerning a judgment debtor’s assets and execution procedures.
A judgment creditor may therefore have options even when the debtor has not voluntarily written the check.
But those options depend heavily on what the debtor actually owns, how the assets are titled, whether other creditors have claims, and whether exemptions or other legal restrictions apply.
That investigation can become particularly important when a business appears to be operating normally while claiming that it has no money to satisfy a judgment.
Can You Recover Attorney’s Fees and Interest?
Sometimes.
Attorney’s fees are not automatically awarded simply because a business wins a lawsuit.
A contract may provide for attorney’s fees. Florida Statute § 57.105(7) provides reciprocity for certain contractual attorney’s fee provisions, allowing the prevailing party to recover reasonable attorney’s fees in an action concerning a contract when the statutory requirements are met.
Florida’s courts have also dealt with the issue in collection cases.
In Ham v. Portfolio Recovery Associates, LLC, the Florida Supreme Court considered whether a contractual attorney’s fee provision could become reciprocal when the creditor pursued an account stated claim rather than suing directly under the underlying credit agreement. The Court held that the statutory reciprocity provision applied because of the relationship between the account stated claim and the underlying contract.
That is a useful warning against treating attorney’s fees as an automatic add-on to every debt.
The contract, the cause of action, and the applicable statute all matter.
Interest also has its own rules. Florida Statute § 55.03 establishes the framework for the interest rate applicable to judgments and provides for quarterly adjustments based on the statutory formula.
What If You Already Have a Judgment but Still Have Not Been Paid?
Then the legal problem has changed.
You are no longer trying to establish that the debtor owes the money. You are trying to enforce an established judgment.
That can involve:
Judgment liens
Garnishment
Execution
Discovery concerning assets
Proceedings supplementary
Negotiated payment arrangements
Other enforcement mechanisms permitted by law
Florida Statute § 55.081 provides that a judgment generally cannot remain a lien on Florida real or personal property indefinitely; the statutory period is 20 years from entry of the judgment, subject to the statute’s provisions.
That does not mean a creditor should wait 19 years and see what happens.
It means Florida gives judgments a legal life that can extend well beyond the original lawsuit.
What If the Business Is Closing or Moving Assets?
This is where timing can become particularly important.
A creditor who has reason to believe that a debtor is transferring assets, shutting down operations, or reorganizing its affairs may need legal advice quickly.
Florida law contains procedures governing execution, judgment liens, proceedings supplementary, and other post-judgment remedies. The appropriate response depends on what is actually happening and what assets are involved.
A creditor should also avoid taking matters into its own hands.
Threatening customers, seizing property without legal authority, making false accusations, or attempting to bypass court procedures can create entirely new legal problems.
Collection is supposed to recover a debt.
It should not create another lawsuit.
How Long Do You Have to Collect a Business Debt in Florida?
There is no single limitations period for every business debt.
For example, Florida Statute § 95.11 generally provides a five-year limitations period for an action founded on a written instrument. Other claims can have different periods.
The nature of the obligation matters.
So does the date on which the particular cause of action accrued.
A creditor should identify the legal claim before assuming that an old invoice is still enforceable.
This is one reason an attorney should review an aging account before the business simply writes it off or sends another routine reminder.
A Business Debt Is Still a Business Problem
An unpaid $5,000 invoice can be irritating.
Some unpaid $50,000 invoice can disrupt payroll.
An unpaid $500,000 obligation can change whether a business can continue operating.
That is why debt collection should be approached in proportion to the amount at stake, the strength of the evidence, the debtor’s financial position, and the cost of pursuing the claim.
There is also a relationship question.
A company may want the money without destroying a valuable customer relationship. Another company may have reached the point where continuing to negotiate makes little economic sense.
Those are business decisions.
The legal job is to identify the available remedies and the consequences of using them.
When Should You Hire a Business Debt Collection Attorney?
Legal advice can be particularly useful when:
The amount owed is substantial
The debtor disputes the debt
The contract contains complicated provisions
A personal guaranty is involved
Several businesses or individuals are connected to the transaction
The debtor has stopped responding
You suspect assets are being moved
The debt is approaching a limitations deadline
You need to file a lawsuit
You already have a judgment
You need to investigate enforcement options
Bankruptcy has been threatened or filed
The earlier the legal analysis occurs, the more options may still be available.
That does not mean every $2,000 invoice needs a lawsuit.
Sometimes a well-supported demand gets the check.
There are cases where a payment agreement makes commercial sense.
Sometimes litigation is necessary.
And sometimes the debtor’s financial condition makes collecting the judgment itself the hardest part.
Frequently Asked Questions
How do I collect a business debt in Florida?
Begin by documenting the debt, reviewing the contract and supporting records, and determining whether the debtor disputes the amount or the underlying obligation. Depending on the circumstances, collection may involve a demand for payment, negotiation, litigation, judgment, and post-judgment enforcement.
Can I sue a business for an unpaid invoice?
Yes, when the facts support a legally recognized claim. The appropriate claim depends on the transaction, contract, records, and applicable Florida law.
Can I personally sue the owner of an LLC for the company’s debt?
Not automatically. An LLC is a separate legal entity. Personal liability generally requires its own legal basis, such as a personal guaranty or another applicable theory.
Could I recover attorney’s fees in a business debt lawsuit?
Possibly. A contract, statute, or other legal basis may authorize recovery. Florida Statute § 57.105(7) provides for reciprocal attorney’s fee rights in certain contract actions when the statutory requirements are satisfied.
Can I garnish a debtor’s bank account in Florida?
Potentially. Florida law provides procedures for garnishment, including post-judgment garnishment under § 77.03. Exemptions, procedural requirements, and the identity of the account holder can affect whether garnishment is available.
What happens after I win a judgment?
The creditor may have several enforcement options, including garnishment, execution, judgment liens, and proceedings supplementary, depending on the debtor’s assets and the circumstances.
How long do I have to sue for an unpaid business debt in Florida?
It depends on the legal claim. Florida generally provides five years for actions founded on a written instrument, while other claims can have different limitations periods.
Is a judgment the same as getting paid?
No. A judgment establishes the legal obligation, but the creditor may still need to use available enforcement procedures to collect the judgment.
Collecting Business Debts in Coral Springs and Broward County
A business in Coral Springs may sell services to another Broward County company, supply goods to customers across South Florida, or have contracts with companies anywhere in the country.
The location of the debtor, the terms of the contract, the applicable law, and the debtor’s assets can all affect the collection strategy.
For a Coral Springs business dealing with a significant unpaid account, the first useful step may be a review of the transaction itself: the contract, invoices, communications, payment history, and any documents showing what the debtor agreed to pay.
From there, the appropriate path may be a demand, negotiation, lawsuit, judgment enforcement, or some combination of those steps.
The important thing is to know which problem you actually have.
An unpaid invoice is one problem. A disputed contract is another. An unpaid judgment is a third.
Treating all three as “someone hasn’t paid us yet” is how a relatively straightforward collection matter can become unnecessarily expensive.
Talk With a Coral Springs Business Litigation Attorney
If your business is owed money by a customer, contractor, company, or other party, Reinfeld & Cabrera, P.A. can review the underlying transaction and discuss the legal options available for pursuing the debt.
That may mean evaluating the contract and records before a lawsuit is filed. It may mean negotiating payment. It may mean litigating the claim. And if you already have a judgment, the analysis may shift toward enforcement.
The right approach depends on the debt, the evidence, the debtor, and the remedies available under Florida law.
This article provides general information about Florida business debt collection and is not a substitute for legal advice concerning a particular debt, contract, lawsuit, or judgm
What are the 
Thinking about 
A 
