Florida’s economic landscape is made up of many corporations. In fact, they make up 99.8% of all Florida businesses. These corporations also employ approximately 3.6 million employees, which make up a total of 41% of the state’s workforce.
Some of the advantages of incorporating in the state of Florida are the low tax burden, access to capital, and the lower cost of living compared with other major economic hubs in the country.
The following guide will show you how to start a corporation or new business in Florida.
1. Select a name for your corporation
When deciding on a business name in Florida, you need to adhere to a few state naming guidelines.
General corporate name guidelines
- Aside from general partnership registrations, fictitious name registrations, and limited liability partnership statements, the name of your Florida corporation must be significantly different or distinguishable from existing business entities in the state
- The name cannot imply in any way that your corporation is connected or affiliated with a state or federal government agency or corporation
- Your Florida corporation name should not imply that the business is organized for any other purpose other than what stated in the Articles of Organization
- The name must contain one of the following words or abbreviations, company, corporation, Inc., Corp., etc
For further guidance on naming a Florida-based corporation, refer to the Florida statutes in relation to the corporation naming guidelines.
Trademark
Registering your corporation name as a trademark prevents others from using a similar or the same name for their product or service. In Florida, you can start by choosing your trademark style and ensuring the trademark is available by completing a name search and clarifying your reasons for filing the trademark. Thereafter, download and fill in the Trademark registration application Form and submit it to the Florida Department of State.
Entity name
An entity name is the state’s legal name to identify a Florida corporation. Therefore, it is the name that you would include on all of your formation and legal documents.
DBA (Doing-business-as) name
If you’re planning on doing business under any other name aside from your legal entity name, you need to register a DBA or (Doing Business As) name in Florida. The first step is deciding on a DBA name and then performing a name check availability search. Thereafter, submit official documents to register your DBA and then file the DBA registration Form with the Secretary of State.
2. Nominate a registered agent
Every Florida corporation requires a registered agent. The registered agent is also referred to as a statutory or service of process agent. Their primary role is to accept legal documentation and service of process on the corporation’s behalf.
The service of process agent is the corporation’s business contact with the state.
You may nominate anyone to be your corporation’s registered agent so long as they meet the following requirements:
- They must be available during normal business hours
- They must have a physical street address in the state where business activities are conducted [this cannot be a PO Box address]
- They must be at least 18 years of age or older
- They must consent to the appointment
3. Appoint initial directors at the organizational meeting
The next step in the Florida corporation formation process is holding an organizational meeting and appointing initial directors. Some other responsibilities that should be carried out during this initial meeting include creating and approving bylaws, determining the corporation’s share structure, and executing the Articles of Incorporation.
Your corporation will need to elect at least one director to oversee the operations of the business until the first shareholders’ meeting is held.
The director will be in charge of repealing and adopting the operational bylaws including any amendments to the governing documents and electing, removing, and supervising officers.
You must also elect an incorporator who will be responsible for signing and delivering the Articles of Incorporation. Either the incorporator or initial director should call an organizational meeting. A board of directors needs to be elected during this meeting, and officers will need to be nominated.
4. File Articles of Incorporation
Every Florida corporation must file Articles of Incorporation with the state. This step officially marks the creation of your business.
Your articles must include pertinent information such as:
- The business name, office address, and statement of purpose
- The Incorporator’s name, address, and signature
- Names and addresses of the director and officers
- The number of shares the business is allowed to issue
The Articles of Incorporation Form that the Florida Department of State issues is only intended to be used to form a business with one share class. If you intend on having multiple share classes, you should create your own articles.
Once you have included the relevant information, file the articles online or via mail to the following address:
New Filing Section
Department of State
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
5. Create and approve bylaws
Every business needs a set of rules and regulations that everyone involved must abide by. For Florida corporations, this is referred to as the corporate bylaws. They are essentially a constitution for your corporation making the priorities and rules clear to all business members.
The below information must be included in your bylaws:
- The guidelines for negotiating contracts
- The procedure for adding and amending bylaws moving forward
- How corporate records will be stored and managed
- The process of holding meetings, nominating directors and officers, and voting
- How the business is going to be governed
- The roles and responsibilities of officers and directors
- The process and procedure for handling disputes
- The date of the annual shareholder meeting
- What accounts for a quorum for voting purposes
- Fiduciary duties to the business
6. Select a share structure
Stock must be issued to each shareholder in exchange for cash, services, or property contributions. Enter each shareholder’s name and contact details in the business’s stock transfer ledger.
The stock has no par value in the state as this is the default rule in Florida.
So there’s no need to state whether or not corporate shares have a par value. While Florida corporations may establish a par value for their shares, it is not a state requirement. If you choose to do so, the par value must be included in the articles.
7. Obtain an EIN
An EIN is also referred to as an Employer Identification Number. It’s a tax identification assigned by the IRS to all business entities in the states. It works like a social security number, but for your business.
Obtaining an EIN is free of charge from the Internal Revenue Service.
All you need do is complete the online application using the EIN assistant or download and complete IRS Form SS-4 and mail it to the IRS at the following mailing address:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
8. File Florida state taxes
The following state business taxes, also referred to as corporate taxes are due by all Florida corporations irrespective of the type of business or federal taxes due:
- Corporate income tax: All Florida corporations must pay corporate income tax. It’s also referred to as franchise tax and is payable by all business entities existing in the state, deriving income, or conducting business.
- Sales and use tax: Florida corporations are liable for sales and use tax. It’s imposed on taxable services and products and is collected from the buyer at the time of sale.
- Reemployment tax: Formerly known as the unemployment tax, reemployment tax is payable by eligible businesses in Florida. It’s used to provide a temporary or partial income to employees who lose their jobs. However, it’s only applicable if the employees lose their jobs through no fault of their own.
9. Florida business licenses and permits
Florida corporations must apply for the following license:
- Seller’s permit: This is also referred to as an Annual Resale Certificate for sales tax if you intend to sell products and services or engage in business in the state. Apply via the Florida Department of Revenue website or download and complete the Form and send it via mail to the following address:
Account Management MS 1-5730
Florida Department of Revenue
5050 W. Tennessee St.
Tallahassee FL 32399-0160
Business licenses vary based on your corporation’s location and activity. Professional Corporations may need to apply for a professional business license. Feel free to refer to the Florida Division of Library and Information Services to find out if your corporation requires additional licenses and permits to operate in the state.
10. Annual report requirements in Florida
Florida corporations are required to file an annual report every year to remain in good standing with the state. You’ll file the first report in the year following your corporation’s official formation. The Florida annual report should be filed online between the 1st of January and the 1st of May.
11. Costs of starting a corporation in Florida
The filing fees below apply to all Florida corporations:
- DBA name: $50
- Articles of Organization: $70
- Annual report: $150
- Florida Certificate of status: $8.75
Next steps after forming a corporation
After forming your Florida corporation, you’ll need to remain compliant by completing a few necessary steps. These steps are important whether your corporation is a large or small business.
Open a business bank account
A separate bank account is necessary to separate business assets from personal assets. It’s just another layer of protection in the event that your business ever faces legal ramifications or, in other words, is sued.
Another reason for a corporate bank account is to sync your bank account with business accounting software to manage your finances more efficiently.
Build your business’s credit score
A number of factors are involved in establishing and building a credit score for your corporation. You’ll need to start by getting listed with the essential business credit agencies, establish your business’s fundability and establish credit lines.
A good credit score is essential for qualifying for credit cards, getting better interest rates, and higher amounts of credit.
FAQs
A Florida LLC or limited liability company does have some characteristics of a corporation. However, it is a hybrid and shares similarities with companies structured as partnerships as well. LLCs are easy to form and manage, and they provide the liability protection of big corporations.
From an economic angle, Florida is good for businesses. Additionally, Florida’s business laws are flexible. Some other reasons to incorporate in Florida include tax benefits and incentives for business growth.
If you’re looking for business entities in the state of Florida, refer to the SunBiz Secretary of State website. It provides an option to look up an entity, tax number, registered agent, business name, or document number.
Florida corporations are for-profit businesses designed to make a profit unless they are registered as nonprofits. They are also separate legal entities, meaning it’s separate from their business owners and protected from liability.
Some of the benefits of a Florida corporation include no corporate or personal income tax, exemption from property tax, limited liability protection, business continuity, hassle-free transfer of ownership, and better access to capital.
