Are you concerned about your responsibility and keeping your assets safe from businesses? As a business owner or entrepreneur, you need to think about how important your business structure is. When a company is incorporated in Florida, it becomes an independent legal entity from its owners.
Forming a corporation in the state of Florida can offer you several benefits. Low state filing fees, excellent limited liability safeguards, no minimum capital requirements, and a low corporate income tax rate are just a few examples.
If you have no idea about incorporating in Florida, here’s a detailed guideline for you. In this article, you will also learn how to register a business in Florida. And finally, you can better choose how to set up your business. Let’s dive into the details!
Why Incorporate in Florida?
Incorporating in Florida refers to the system of creating a legal business structure known as a corporation within the state of Florida. Basically, forming a corporation in Florida permits businesses or companies to run financially independently.
Most business owners prefer to keep their business finances and personal assets separate. When another company or person sues a corporation in court, the business owner is not financially responsible for the corporation’s debts or lawsuits.
Now, if you want to incorporate in Florida, you have a few options like:
- Corporation.
- Sole proprietorship.
- Partnership.
- Limited Liability Corporation (LLC).
Florida offers different types of business facilities for new entrepreneurs. When you incorporate in Florida as a business owner, you must complete the necessary steps and paperwork to establish a corporation in accordance with state law. By incorporating a corporation, you can get several advantages-
- First, it will give you limited liability protection. This means the owner’s personal assets or property are safe from the corporation’s debts and legal liabilities.
- Secondly, a corporation can still continue even if the management and ownership change.
On the other hand, An LLC is another legal business structure, especially for small business owners or entrepreneurs. It is also capable of providing liability protection for your personal assets.
This means the business owners are not responsible for the business’s debts and liabilities. Instead, the LLC is seen as a separate legal entity that can own property, sign contracts, and run a business. The LLC’s owner can benefit from these advantages as a “member” of the company. This provides small business owners with many of the same benefits as sole proprietorships or partnerships.
What Is a Florida Corporation?
If you have determined to open a business in Florida, the main thing you should consider is the type of business structure. A corporation is a legal entity totally separate from its owners, who are known as shareholders.
When you form a corporation, it becomes a separate legal entity that can survive changes in ownership. Each corporation has shareholders rather than one person. A corporation’s board members are responsible for their future planning, financial decisions, internal regulations, and policy changes. It is also noted that all active shareholders are capable of voting.
When another company or person sues a corporation in court, the business owner is not financially responsible for the corporation’s debts or lawsuits. There are several steps to open a corporation in Florida. Before moving on,
let’s explore the types of corporations:
Florida Corporation Types
- C Corporation: Basically, a C-corporation is considered the most traditional and prominent type of corporation. It is a different legal entity from its owners, usually known as shareholders. A C-corporation provides limited liability protection for its owner’s personal assets. That means if your corporation is responsible for any lawsuits or debts, your personal property will be safe.
- S Corporation: S-corporation or S-corp, is another business entity offering certain tax advantages. One of the major benefits of an S-corp is that it allows for pass-through taxation. Similarly, like other corporations, it will provide liability protection for your personal assets. When you form your corporation as an S-corp, it also gives flexibility in profit distribution to shareholders.
- Professional Corporation: A professional corporation is preferable for professionals in specific fields like doctors, lawyers, engineers, accountants, etc. The main reason for this type of corporation is to limit owners’ liability in case other owners do something wrong or are careless.
- Non-Profit Corporation: It is a legal entity organized for charitable, religious, social, educational, etc. The main purpose of this corporation is to avoid taxes and limit liability. Non-profit Corporations are established for public interest and community benefits rather than to make money.
How do I Incorporate in Florida?
Are you ready to form a corporation in Florida? If you are determined, you must follow a few steps to open a corporation in Florida.
- Select a Corporate Name
After determining the type of corporation, the first step is to choose a corporate name. In the state of Florida, all corporations must have a unique name, and your name cannot be the same or similar to any other business in the state.
In this case, you can search the business name database at the division of corporations to see if the name you want to use is available or not. Your company’s name must include the words “corporation,” “incorporated,” “company,” or an abbreviation of one of these words.
- File Articles of Incorporation
To form a corporation, you must file Articles of Incorporation in Florida. It is a document filed with the state to create a corporation. You can apply for this by mail or online. When you file an article of incorporation, it will provide the basic information about your Florida corporation, including:
- Corporation’s Name
- Principal Office Street Address
- Mailing Address
- The corporation’s purpose
- Registered Agent Name and Address.
- Signature
- Appoint a Registered Agent
Florida, like other states, requires that your business have a “registered agent.” A registered agent is a person or business that a company chooses to receive legal and official documents like lawsuits, tax notices, and official mail on behalf of the company or corporation. The registered agent is the business’s point of contact with the state government.
A registered agent can be an individual or a company. The major responsibility of a registered agent is to receive all types of legal documents and notifications on behalf of your business. It will ensure your business entity follows the laws and is aware of any kinds of legal actions that could affect you or your business.
When you want to appoint an individual as your registered agent, make sure that they have a physical address there. And when your chosen registered agent is a company or business entity, be sure it has been granted Florida authority to do business.
On the other hand, a registered agent protects the owners’ personal information by keeping their home addresses out of public records. This means that any corporation can use the registered agent as a public contact point for official business.
- Create Your Corporate Bylaws
After forming a corporation, corporate bylaws allow you to provide detailed instructions about how your corporation will be run. The term “corporate bylaws” refers to an internal corporate document that outlines the fundamental operating principles of a corporation. The company’s founder or directors usually write it.
But it’s true! The state of Florida is not required to create corporate bylaws when the Florida Department of State approves the certificate of incorporation. But it is recommended for several reasons that can benefit your corporation.
With this bylaw, you can ensure things like how directors are elected, how meetings are run, how the officer roster and summary of duties are used, and what voting rules are followed. Moreover, it will outline ownership rights, annual meetings, and the appointment and removal of officers and directors.
- Appoint Your Corporate Directors
To form a corporation, you must appoint corporate directors, also known as board directors or board members. The board of directors is responsible for the overall management and long-term direction of the corporation.
Corporate directors look after the interests of shareholders and make decisions about your business’s future plans, how the business is run, what the obstacles are, how much finance it has, and how successful it will be in the long run. They can also set the company’s internal policies, approve major business initiatives, and monitor the executive management team.
- Get Your Business Licenses and Permits
In Florida, you need a business license and a permit to legally run a business. But depending on where and how your business is set up, you may need different legal documents.
Most businesses in Florida need a general license from the local government where they are located. This is also known as a business tax receipt or an occupational license. Aside from these, additional permits may be required, which must be filed with the county or the state.
Certain professions or occupations in Florida may require specialized licenses. For example, doctors, lawyers, engineers, real estate agents, etc. On the other hand, if your business involves selling alcoholic beverages, you will need to get the appropriate permissions from the Florida Division of Alcoholic Beverages and Tobacco.
- Issue Stock
Issue stock refers to the shares of stock that a corporation has given to its shareholders. When you form a corporation, the articles of incorporation will specify how many shares of stock your corporation is permitted to issue. These authorized shares basically represent the maximum number of shares that the corporation is permitted to issue.
There’s a point to remember the stock is a symbol of ownership in your company. When shareholders buy a share of the company, they also buy a small piece of your business.
Shareholders who own issue stock have certain rights and advantages, like voting on important issues that affect the company, such as selecting directors or approving major actions. Usually, the stock is issued through the issuance of stock certificates, which serve as proof of ownership.
- File the Florida Annual Report
An annual report is a document that explains in detail what your business has done over the past year. Annual reports give state officials important information, like the names and addresses of the company’s directors or top members, as well as the company’s address and the address of its registered agent.
In Florida, businesses must file an annual report with the Florida Department of State to stay active and in good standing with the state. An annual report is a form you must fill out yearly to show the state that you can run a business.
- Get Your EIN Number
An EIN number is also known as a Federal Tax Identification Number. It is a nine-digit number that separates the identity of a business from the identity of its owner. It identifies a business entity and is used for tax purposes in the United States. Each EIN is different so that the IRS can quickly identify a business entity.
It is like a Social Security number (SSN) for your business. A good way to protect one’s identity is to use an EIN instead of the business owner’s Social Security Number. Most businesses, whether they are LLCs, corporations, or sole proprietorships, are required to have an employer identification number.
Here are some of the most common reasons why you need an EIN:
- Hiring Employees.
- Opening a business bank account.
- Applying for business licenses.
- Applying for business loans.
- Setting up a business entity.
Florida Incorporation Advantages
We have already explored the steps to opening a corporation in Florida. Now, let’s discuss why it’s important and what advantages you can get from a Florida corporation. Take a look below:
- Limited Liability Protection
Liability protection is one of the best reasons to incorporate in Florida. Shareholders in a Florida corporation are usually not personally responsible for the business’s debts or lawsuits. When you form a corporation in Florida, that means it is a totally separate legal entity.
- Tax Benefits
Tax benefits are vital to attracting new businesses. In Florida, There is no state income tax on personal income. And this is one of the best things for business owners or entrepreneurs. S-corporation is another type of business entity that offers you certain tax advantages. S corporations do not have to pay a corporate income tax in Florida.
- Strategic Location
Another thing that makes Florida Corporation great is its strategic location. You can get easy access to domestic and international markets. Florida State is also considered the gateway to Latin America and the Caribbean. Because of this, its location makes it an ideal hub for international trade and logistics. The state’s ports, airports, transportation, and infrastructure facilities can give you the biggest business opportunity.
- Flexibility in Business Structure
When you want to do business in Florida, you can choose your business structure, whether you want to start a corporation, an LLC, a partnership, or a single-person business. Florida has a variety of options that can fit your needs. This flexibility allows you different types of advantages, such as liability protection, taxation, and management.
What Can Business Globalizer Do for You?
Due to the lack of a state income tax, Florida is regarded as a state that is extremely accommodating to small business owners. Because of this, it has become a popular location for entrepreneurs.
But you might think that forming an incorporation in Florida is time-consuming and difficult. Yeah, it’s right. When you want to form an incorporation, it’s normal to face several problems. Don’t worry; Business Globalizer is here to help you. We helped numerous companies with our premium business consultation and formation services.
We, Business Globalizer, are quite a renowned service provider. We basically focused on helping non-residents and foreign entrepreneurs achieve their goals. We are a one-stop solution for entrepreneurs and businesses. From starting your company formation in the USA, opening payment gateways for you, or getting an EIN or ITIN number, almost all kinds of services can be provided by Business Globalizer.
FAQs
Q1: How much does it cost to incorporate in Florida?
Answer: If you want to start a business in Florida, you must first pay the state filing fee. You must designate a registered agent for your company and pay a fee. In addition, you will be required to pay for a certified copy of your Florida Articles of Incorporation.
Q2. How long does it take to incorporate in Florida?
Answer: When you incorporate a business in Florida, it usually takes a few weeks to get everything set up. But the exact time frame can vary depending on things like the type of business entity you have and how complicated your business structure is.
Q3. Can You Incorporate Florida Anonymously?
Answer: No, you can not incorporate in Florida anonymously. While incorporating a business in Florida, the business owner’s names and addresses must be made public. Because of this, you can not be anonymous when starting a business in Florida.
Wrapping Up
Finally, if you have decided to incorporate in Florida, it is one of the best choices for you and your business entity. You know, you will get several advantages while forming a corporation in Florida. You can get personal liability protection, tax breaks, and many other facilities. You can also easily access domestic and international markets through Florida.
