How to legally start your business in Florida

How to Start a Business in Florida:

Florida consistently ranks among the top states for business. There is no income tax in Florida, and it has favorable government policies and competitive costs. When you start a business in Florida, future growth is easy. We’ll walk you through all of the crucial steps once you have your business plan ready to go.

1. Identify your type of business

It’s important to identify your type of business as this can impact how you move through the next steps.

There are three primary business structures: DBAs, Corporations, and LLCs.

  • A DBA, “Doing Business As,” designates a partnership, general partnership, limited partnership, or sole proprietorship. It’s a different name, or fictitious name, that individuals and partners use as their business name.
  • A Corporation is a separate entity that provides liability protection to the owners. Its structure includes shareholders, directors, and officers. Some professions must identify themselves as a corporation – doctors, lawyers, architects, etc.
  • An LLC, “Limited Liability Company,” is a separate entity but provides easy management and taxation. In recent years, it has replaced both DBAs and Corporations in popularity.

2. Select a company name

This will likely have been part of your business plan already. This is an important step However, it comes into play is making sure your company name choice is available in Florida and does not have any existing trademarks.

3. Form and register your business

Florida has specific requirements for registering your business. You’ll need to fill out the correct paperwork and following these steps.

To form an LLC:

  • File paperwork with the Florida Department of State Division of Corporations
  • Designated a Registered Agent
  • Hold an Organizational Meeting
  • Elect S-Corporation status with the IRS by filing IRS Form 2553
    • An LLC can be taxed as an S or C-Corporation. Speak to your tax advisor about this before completing this OPTIONAL step. It adds complexity to your LLC that most people would rather avoid.

To form a Profit or Non-Profit Corporation:

To file a DBA in Florida:

  • Register through the sunbiz.org portal
  • Search your desired name in the sunbiz.org fictitious name database
  • Register your name with the Florida Department of State Division of Corporations

4. Register for taxes

Just like you have a social security number, your business requires an EIN (employer identification number). This is required for Corporations and LLCs and optional for DBAs. However, it’s often best to obtain an EIN anyway because otherwise, you will need to use your personal SSN on documents.

You can apply online with the IRS for an EIN, or you can use IRS Form SS-4.

5. Create business banking and credit accounts

It’s important to establish company accounts for two reasons. For one, it allows you to keep your personal and business life separate. Second, it helps you build a company credit profile that can help you qualify for loans or credit lines when you need them later.

To apply for these accounts, you’ll likely need your filed paperwork, your EIN, a company resolution authorizing your company to open the account (signed by owners, members, officers, directors, etc.). Thus, it’s important you complete all the prior steps leading up to this.

6. Obtain permits and licenses

If you want to do business in your specific city or county in Florida, you’ll need a license for that. You can visit the Florida Department of Business & Professional Regulation website to get information about licensing for different types of businesses.

7. Maintain Florida’s business requirements

While there are not many, there are some ongoing requirements in Florida that you should be aware of for DBAs, LLCs, and Corporations.

  • DBA: You’ll need to renew your Fictitious Business Name with the county after 5 years (unless you change it).
  • LLC: As an LLC, you’re required to file an annual report each year on May 1. The report has a filing fee of $139.
  • Corporation: Corporations must file the “Statement of Information” or annual report, which provides Florida with an update on your business address and other information. You can e-file this report by May 1. There is a $400 late fee for all for-profit corporations who do not meet the deadline.

All businesses are required to pay a franchise tax due on the last day of April, June, and September as well as the last day of the tax year. This franchise tax is calculated as a percentage of the company’s net income for the year.

Conclusion:

Starting your own business yourself can feel challenging and overwhelming at times. We hope we gave you guidance and a place to start. Remember, it’s recommended that you seek professional advice with anything relating to law and taxes!

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Legal Lotus, P.A. is a Miami-based law firm specializing in family law, civil litigation, and the drafting of contracts, partnerships, and wills.

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