How to start a corporation in Florida?
What is a Florida corporation?
Corporation is a business activity which has legal status in the eye of law. It can sue and can be sued by its name. It is a separate distinctive entity form its owners.
Who incorporates a corporation in Florida?
Florida Department of State, Division of Corporation is a filing agency and does not render any legal, accounting, or tax advice or consultancy. This office also does not provide you with corporate seals, minute books, or stock certificates.
What are the brief steps to start a corporation in Florida
It is recommended to hire a CPA or legal consultant to incorporate a corporation in Florida due to a technicality and legal process otherwise you may do this by following simple steps.
- Select and apply online to check the availability of corporation name
- Arrange a principal office for official correspondence
- Decide the purpose or aims and objectives of the corporation
- Decide the number of shares of stock
- Appoint initial officer or directors (optional at this stage)
- Appoint a registered agent
- Prepare and Submit articles of incorporation
- Prepare bye-laws for the corporation
- Apply for license / registration for particular business
- Open a Bank account (optional)
- Apply for EIN
- Apply for sale tax registration number (optional)
- Can I register a corporation other than my home state?
- Convert C Corporation to an S Corporaiton for the tax purposes
- Can a Corporation be used as an LLC?
How to check the availability of name of the corporation?
In Florida, the preliminary name search and reservation is no more available from the office of Division of Corporation. Now you can make a preliminary search through www.sunbiz.org official website of Division of Corporation.
What is a principal office for a corporation?
The office used for official correspondence may call the principal place or office of a corporation. The principal address must be a street address for incorporation purpose. You may also use P.O. Box address as a mailing address.
How to draft purpose of the corporation?
Purpose defines the details about corporations’ aims and objective. Why you are forming a corporation. What is the logic behind your initiative? What corporation will do etc?
How do decide shares of stock for a corporation?
You may decide as many shares you want to register for incorporation. This must not be nil or zero.
Appoint initial officers or directors of a corporation?
You may appoint any time initial officers or directors to operate your corporation. This is optional for you. But you may require for bank account or other registration or licensing purpose.
Who is the principal agent of a corporation?
Every corporation in Florida must have a principal agent for service of process in the state. He may be an individual or corporation who agrees to accept legal papers on behalf of the corporation. A registered agent is authorized to do business in Florida.
How to file articles of incorporation in Florida?
The articles of incorporation must include the corporate name, address, purpose, signature, and address of an agent, the number of shares, the names and addresses of initial officers or directors and the name and address of incorporator. The filing fee is $70. There are additional fees if you want certified copies of your articles. You can file articles online or by postal mail.
How to prepare bye-laws of a corporation?
You can draft bye-laws by including all internal procedure, policies, and procedures. Bylaws are an internal corporate document. Bye-laws are not filed with the state. No corporation is not legally bound to have corporate bylaws.
What license or registration is necessary for a Florida corporation?
Normally in Florida, you have to get license or registration from relevant state office for all kind of activities to be performed by the corporation.
How to open a bank account for a Florida corporation?
Any officer of the corporation may obtain a bank account for a corporation on behalf of the corporation after getting the permission from the directors.
How to obtain EIN for a Florida corporation?
You may apply with the principal agent for employer identification number (EIN) from IRS. IRS is the issuing authority of EIN. EIN is mandatory for corporations. You may also apply online through the official website of IRS.
What are the states’ annual requirements for corporations in Florida?
All Florida Corporations must file an Annual Report yearly to maintain “active” status. The first report is due in the year the following formation. The report must be filed electronically online between January 1st and May 1st. The fee for the annual report is $150. After May 1st a $400 late fee is added to the annual report filing fee.
How to register with Florida sale tax?
Every state has its own process for sale tax. In Florida, You can register to collect and pay sales and use tax using official website.
Once you are registered, we will send you a Certificate of Registration (Form DR-11), a Florida Annual Resale Certificate for Sales Tax (Form DR-13), and tax return forms. Place the Certificate of Registration in a visible area of the business.
Who can form a corporation in Florida?
- Resident of US and resident of Florida can start a corporation in Florida
- Resident of US and not resident of Florida can start a corporation in Florida
- Non-resident of US can start a corporation in Florida
Register a Corporation other than home State
A state of Florida resident can create a corporation other than Florida to conduct business in the other state, but cannot bypass for the tax purposes. Follow the examples below to understand.
Example One-A Florida resident intends to conduct business in California
The corporation will be formed in the State of California as a California Domestic Corporation with the Secretary of State to physically conduct business.
Example Two-A Florida resident intends to incorporate business in California to save taxes
It is a complex procedure and most professionals advise to avoid it to maintain two states. A State of Florida resident will incorporate California Corporation with the CA Secretary of State, and will file a certificate of Authority to conduct business in the State of Florida. You must incorporate in the state you are physically conducting business either a foreign entity or a domestic entity.
Convert Florida C Corporation to a Florida S Corporation
You can file an election with the Internal Revenue service to elect C Corporation to an S Corporaiton by filing a Form 2553.
Advantages and Disadvantages for the Conversion: You will avoid paying double taxes to the Internal Revenue Service, because it is a pass through entity and the corporation does not pay taxes. Profit and Loss will be transferred to the stockholders to report on their income tax returns. You cannot defer taxes for the future years. You can defer taxes in C Corporation, So, we strongly advise you to consult a professional.
Use Corporation as a Limited Liability Company
Unfortunately, A corporation does not have a flexibility to use a Corporation as an LLC. It can be converted from a corporation to an LLC or Vice Versa, but an election cannot be filed to use a Limited Liability Company.
How To Add Additional Name(s) Under Existing Florida Corporation?
A fictitious business name can be added to your existing corporation, but it does not give you a legal protection.You can add as many as Florida DBA under the corporation to advertise a business.
