Legal Question in Business Law in Florida

It is typical that the Seller giving you financing for the purchase and or Landlord would want a guarnatee by 1 or more of the principals, hopefully not spouses. This is generally hammered out during the early negotiations and sets forth the limitations on the sales agreement; hopefully you used counsel in the purchase.

As to the S Corp, I would not advise a Corporation as the entiy of choice; and if you have already done so, my best recommendation is to pay to have it converted as soon as possble utilizing the new Florida Statute to get better creditor protection than a corporation. Go to my wesite at www.dansasso.com and pull up the business practice area, and the business section under the picutre - this should enlighten you an your partners some; and don't try to do it yourself when it comes to "phantom tax", bankruptcy protection, and selective holding of a partner's distributive profits. Hope this helps.

As a Franchise Attorney I agree that a personal guaranty is standard practice, especially with landlords. They don't want to worry about proceeding against a corporation that might or might not have assets. Try to negotiate this out, or limit the personal guaranty to only one individual. It will help a lot if you are represented by an attorney. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation