If you are interested in setting up a corporation and have always wondered how to incorporate in Florida, we will help you learn all the steps you can take to establish your own Florida corporation and how doing so will result in the growth and expansion of your new business in the long run.
The state of Florida is packed with a lot of amazing opportunities for business growth and expansion, and this is no secret to several top firms across the globe. Many big companies have discovered the gold mine that Florida is, hence the decision to establish their business headquarters in the sunshine state.
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What is Florida Incorporation?
People often get confused when they think about an Inc vs LLC for their new business, but if you have ever asked “what is a Florida incorporation?” the answer is in understanding first what a Florida corporation is. A Florida corporation is an organization formed and established in Florida to act as a legal entity separate and distinct from its owners. This means that your corporation can enter contracts, make profits, own assets, can be taxed, and can sue and be sued under Florida corporate laws. It is a limited liability enterprise whereby the owners are not personally responsible for the business's debts or liabilities.
With these said, incorporating in Florida would not only mean that your organization would be registered in Florida, but it would also imply that your corporation would be governed under general corporation laws of the state of Florida.
What are the Advantages of Incorporating in Florida?
Florida is one of the top-ranked states for incorporation in the United States for good reason. Let's take a look at some of the benefits of incorporating in Florida:
Limited Liability Protection
Incorporating in Florida gives your company a limited liability status which implies that as a business owner or shareholder, your private assets are protected if your company incurs a loss or becomes indebted. More simply, because your organization is now considered a separate and distinct entity from you, your business will be held liable for its operation and debts instead of you.
Anonymity
By incorporating your business, you can keep your ownership interest anonymous – perhaps to avoid groundless lawsuits. You may not have to disclose the names of principals in the article of incorporation.
Perpetual Existence
This means that your corporation will continue to exist even if there is a change in ownership or if the shareholders die. In some other states, a change in business ownership is always considered a new business, but this is not the case with a Florida corporation as a change in ownership does not affect anything. It is owed to the fact that the company becomes its own entity once incorporated.
Ease of Transferability
Unlike running a sole proprietorship or partnership business, incorporating your business makes the transfer of ownership relatively easy and seamless. By just the assignment of the stock certificate, the Florida corporation and all its assets and accounts are immediately transferred to the new owner.
Tax Benefits
One of the greatest benefits of incorporating in Florida is the many tax benefits available to you as a business owner. They include:
- absence of personal income tax
- exemption from the 5.5% corporation tax for “S” corporations
- employee benefit deduction
- low-income tax rates
- Sole proprietorships and partnerships, on the other hand, do not enjoy as much tax benefits.
Low State Filing Fees
Incorporating your business in the state of Florida would require you to file a Florida article of incorporation with the Division of Corporations for a fee of about $70, which has a low cost compared to many other states.
Great Economy and Business Climate
Statistics from the International Trade and Administration, U.S. Department of Commerce, show that the state of Florida had the 2nd largest foreign trade zone network in the USA in 2020. It also ranks as the 8th strongest economy in the United States, making it easy for businesses to reach their growth and expansion goals.
The state and local governments work actively with economic development leaders to ensure a favorable business climate for companies of all types and sizes. The business-friendly tax policies are not the only thing that makes incorporation in Florida a great choice, compared to its competitors, the state is cost-effective when it comes to acquiring land, labor, and capital for business purposes. The great weather, infrastructural development, and quality of life are also some of the reasons many big companies are flocking to the sunshine state.
Who Should Consider Incorporating a Business in Florida?
The benefits mentioned above can be enjoyed by any kind of business wishing to incorporate their business in Florida – including profit and nonprofit organizations. Many people who start a nonprofit organization often wonder if their enterprise is worth being incorporated, and the short answer is yes, depending on the nature of your organization and what it seeks to accomplish.
Why incorporate in Florida? In most cases, the benefits of incorporating your non-profit business outweigh the outcome of not incorporating. Your nonprofit organization can incorporate in Florida if the following conditions hold:
- Your organization makes a profit from its charitable activities
- Your nonprofit company wants to apply for private and public grants (requesting for tax-exempt status with the IRS is easier when your company is incorporated, and this allows you to apply for both private and public grants)
- You wish to protect yourself from personal liability in the event of a lawsuit
- You engage in political activities that can lead to lawsuits
Here’s How to Incorporate in Florida
You may feel confused when deciding about registering an S Corp vs C Corp. But regardless of your choice, if you do not understand how to incorporate a business in Florida properly, you may not be able to enjoy the benefits a corporate structure offers.
Without wasting any more time, the steps to incorporating your Florida business include the following:
- Select your Florida corporate name
- File your Articles of Incorporation for Florida
- Obtain a Federal Employer Identification Number (EIN)
- Pay Florida incorporation fees & costs
- Prepare your corporation's bylaw
- Find a registered agent
1. Select Your Florida Corporate Name
If you want to incorporate your company in Florida, have your desired business structure in mind (usually anyone among a Florida LLC, a Florida corporation, or a Florida DBA, aka fictitious name). Then, come up with a name for your corporation. The Sunbiz website allows you to easily find a corporation in Florida to prevent you from registering a company name that is already in use. The website shows you useful information ranging from business names to who owns a company in Florida.
All of these help you narrow down your corporate name choice to ensure it's not taken by another company. It is also important to know that to pass this stage, your Florida organization name must include the words “corporation,” “company,” “incorporated,” or the abbreviations “Inc.,” “Co.,” or “Corp.”
2. File the Articles of Incorporation for Florida
The next step to take is to file a form called Florida Articles of Incorporation with the Florida Department of State. The form establishes the formation of your company and would include the following information:
- Your firm's name
- Street address of your Florida business office as well as its mailing address (if they are different from each other)
- Purpose of your corporation
- Name, signature, and street address of your Florida registered agent
- Creation date of your Florida corporation (if it differs from the filing date)
- Name and address of your business incorporation (i.e., the person who prepares and signs your Florida Articles of Incorporation)
3. Obtain a Federal Employer Identification Number (EIN)
You must have an EIN if you plan to hire employees for your Florida corporation, open a bank account for your business, and apply for credit. An Employer Identification Number is a unique number issued by the IRS to business entities for tax reporting purposes. Application for the identification number is available on the IRS website and is completely free.
4. Pay Florida Incorporation Fees & Costs
Along with filing the articles of incorporation, you will be required to pay a Florida corporation filing fee to the Division of Corporations if you wish to incorporate your business in the state. In answering the question “how much does it cost to incorporate a business in Florida?”, it is important to know that additional Florida corporation filing fees may be required aside from the base fee.
How Much Does It Cost to Incorporate in Florida?
The cost of incorporating in Florida depends on things such as the type and nature of your corporation. Business incorporation fees in Florida start at $70.
5. Prepare Your Corporation's Bylaw
A bylaw is a legal document that sets principles, rules, and procedures in place to govern an organization's day-to-day operations. Your Florida corporate bylaws are not public and do not need to be filed with the state, but they may be requested by banks, creditors, the IRS, and investors to prove your corporation's legitimacy.
6. Find a Florida Registered Agent
A Florida registered agent is an individual or business entity appointed by a corporation or LLC to receive service of process in the state of Florida. You will be required to appoint a registered agent when you file your Articles of Corporation with the Florida department of state.
Your registered agent will be your corporation's first point of contact when it comes to receiving tax documents and summons. This agent can be anyone (including yourself), and you do not necessarily have to live in Florida to set up a Florida corporation as long as you supply your registered agent's name and Florida street address (registered office). A physical location in Florida is required to receive important mails and documents regularly.
Need Help with Florida Corporation Registration?
Do not let the requirements and procedures intimidate you. Starting a corporation in Florida can be a walk in the park when you have someone to walk you through the entire process, taking the burden off you. At Cueto Law Group, we offer Florida incorporation services that take care of the tedious paperwork involved with forming your own corporation in Florida.
We run a complete incorporation package that includes all the parts for stating a Florida corporation or LLC. The expert lawyers at Cueto Law Group will put you through completing your initial forms, drafting your corporate bylaws, applying for your EIN with the IRS, and we will also recommend a reliable registered agent for your new corporation in Florida.
Want to get started on your corporation registration in Florida? Contact us via telephone at 305-777-0377 or via email at [email protected].
Our Conclusion on Starting a Corporation in Florida
Knowing how to start a corporation in Florida may have you feeling like you are fully armed to begin the process all by yourself. While this may be true, many business owners get overwhelmed and exhausting handling the paperwork on their own, which is why we always recommend that you hand over the responsibilities to experts who know the ins and outs of the Florida corporate law and won't miss a thing while helping your business become incorporated in Florida.
FAQs on How to Open a Corporation in Florida
Can I Open a Corporation in Florida Online?
Yes. Forming your corporation in Florida has been made easy with the option to incorporate online. The Florida Division of Corporations provides online access to the relevant forms you need to establish your business in Florida. Incorporating in Florida online is faster and more seamless than mailing your filings.
Is Florida a Good State to Incorporate?
One great thing the state of Florida is known for is its pro-business climate, as employers and employees enjoy low tax burdens. Business owners get to pay only 5.5% on their corporate income tax return and employees do not have to pay personal income tax.
How Long Does It Take to Incorporate in Florida?
It can take anywhere between 5 and 20 business days to incorporate in FL. Mail filings usually take about 3-4 weeks, and online filings take around 2-3 business days. If the application is rejected, it will take another one month to process your Florida incorporation.
