Saved Money by Having Your Accountant or CPA Draft Corporate Legal Documents?

You wouldn’t go to your dentist for your taxes or your doctor to paint your house, right?  So why allow your accountant or CPA to draft critically important legal documents for your business?

Recently a number of clients seeking my help to fix problems and solve disputes have uttered the statement, “well, my accountant drafted that document for me”.  When non-lawyers try to prepare important legal documents for business, the business owner cannot go back to the accountant or CPA to fix the disaster because they lack the competence to do so.  It is actually a third-degree felony in Florida to practice law without a license, not to mention the fact that it upsets real lawyers because those people can cause a great deal of harm.  So, for those accountants and CPAs thinking you are doing someone a favor preparing contracts, bylaws, shareholder agreements, operating agreements, and the like . . . beware.

Accountants and CPAs have special training and experience in financial matters and taxes, not in business law.  Business lawyers do that and Florida Bar Board Certified business litigators are the only recognized experts in the field.  Florida’s business laws change and update in response to an ever changing commerical landscape.  It is a full time job for lawyers to keep on top of these laws.  Accountants and CPAs plainly are not qualified to prepare important legal documents under these laws.  For example, as of January 1, 2015, we have new limited liability company laws in Florida that apply to all LLCs regardless of how old they are.  Would an accountant or CPA know what changed and why?

Setting up or forming a business in Florida is relatively easy on sunbiz.org.  But, determining which corporate entity offered under Florida law is most appropriate is something to discuss with a business lawyer.  You also discuss the tax implications with your accountant or CPA, but the analysis is different.  By the way, there is no such thing as an “S Corp” as a corporate entity.  That is a tax election as compared to a “C Corp” or other choices, like sole proprietor and partnership, as to how you are treated for tax purposes.

The recognized corporate entities under Florida law are: (i) a corporation, regulated by Chapter 607 and identified by “Inc.”, (ii) a limited liability company, formerly governed by Chapter 608 and now by Chapter 605 and identified appropriately by “LLC” after the name, and (iii) a partnership, which is regulated by Chapter 617 and can have several identifiers depending on what kind of partnership it is.  For reasons your accountant or CPA can’t explain to you, the LLC is now the most common form of corporate entity used in Florida.

Depending on the circumstances of each business, it might need or be best served by having certain documents that govern its operations and internal structures.  These are commonly called “corporate governance documents”.  A corporation has bylaws and shareholder agreements.  LLCs have operating agreements, and partnerships, of course, have partnership agreements.  There are certain laws that apply to each and some of these can be bent and some can be changed.  However, an accountant or CPA that doesn’t have a license to practice law in Florida is not the right person to prepare those, just as the young person in the fast food drive-thru window probably isn’t the right person to prepare your taxes or give you tax advice, right?!

So what about contracts, non-competes, non-disclosures, and other important and useful business documents?  Yes, when not serving time for the felony, your accountant or CPA is the perfect person to prepare those for you and they can also run 60 mph and lift heavy objects as if they were a pen! Folks, don’t ask your accountant or CPA to break the law and prepare these legal business documents.  Get a good and experienced business lawyer and ask that person.  Florida has laws that impact all of these documents and lawyers, not accountants, CPAs, or anyone else, are responsible for knowing those laws and preparing documents that properly use those laws and don’t violate them.

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