USA – FLORIDA Law and Practice Contributed by: Eduardo M. Soto and Fabio Giallanza, Weiss Serota Helfman Cole + Bierman, P.L
Key advantages include corporate-level tax efficiency, liquidity (for public REITs) and diversified real estate exposure. 5.4 Minimum Capital Requirement Florida law generally does not impose a statutory minimum capital requirement to form or maintain enti - ties commonly used to invest in real estate, including corporations, LLCs and partnerships. A corporation may be validly organised with a single shareholder and minimal stated capital, and similarly, an LLC or partnership may be formed without a minimum capi - tal contribution beyond what is contractually agreed among the owners. That said, adequate capitalisa - tion remains a practical and legal consideration, par - ticularly in real estate transactions involving lenders, counterparties or third-party claims. Undercapitalisation may be considered by courts when evaluating veil-piercing claims, especially if combined with failure to observe entity formalities or evidence of misuse of the entity. In practice, initial capital is typically driven by the acquisition price, lender equity requirements, working capital needs and jurisdiction- specific closing costs rather than entity law mandates. As a result, real estate investors often capitalise enti - ties at levels sufficient to support the intended project and demonstrate economic substance, even though no formal minimum is required by statute. 5.5 Applicable Governance Requirements Governance requirements for entities used to invest in Florida real estate vary by entity type and are primar - ily dictated by state law and the entity’s governing documents. Corporations are governed by a board of directors responsible for overall management and strategic decisions, with officers handling day-to-day operations. Corporations must observe formalities such as adopting by-laws, issuing shares, maintain - ing corporate records and approving material actions through board or shareholder resolutions. Annual or periodic meetings are customary, although many actions may be taken by written consent, particularly in closely held entities. LLCs offer significantly greater flexibility. An LLC may be structured as member-managed or manag - er-managed, allowing investors to tailor governance
to passive or active ownership models. The operat - ing agreement is the central governance document and typically addresses decision-making authority, approval thresholds for major transactions, transfer restrictions, allocations and distribution mechanics. LLCs are not generally required to hold formal meet - ings unless specified in the operating agreement, reducing administrative burden. Partnerships are governed by partnership agreements or default statutory rules and often involve shared management unless otherwise agreed. The Corporate Transparency Act (CTA) was originally intended to require beneficial ownership reporting for most US and foreign entities, but its scope has been significantly curtailed by executive action and rulemaking under the Trump Administration. In March 2025, FinCEN issued an interim final rule exempting all US-formed entities and US persons from report - ing, limiting CTA compliance solely to foreign entities that are registered to do business in a US state. As a practical matter, this scenario is relatively uncommon in real estate structures, which typically rely on US- formed holding entities, leaving most domestic real estate investments outside the current CTA reporting regime unless future regulatory changes expand its reach. Across all entity types, maintaining adequate records, respecting separateness and following stated gov - ernance procedures is critical to preserving limited liability, satisfying lender requirements, and support - ing enforceability of the ownership structure in real estate transactions. 5.6 Annual Entity Maintenance and Accounting Compliance Annual maintenance and compliance costs for real estate holding entities vary by entity type, jurisdiction and complexity of operations. At a baseline, corpora - tions and LLCs incur state annual report or franchise tax fees, registered agent fees and basic legal main - tenance to preserve good standing, typically ranging from nominal amounts to several hundred dollars per entity per year, depending on the state. Governance- heavy entities, such as corporations, may incur addi - tional legal costs related to board actions, annual
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