Starting a Florida Corporation
Florida has state of the art logistics and transportation infrastructure that makes it easier for small and medium sized enterprises to operate and also conduct trade within the country and internationally. Before you can begin business operations you will need to register a corporation in Florida and also ensure compliance with several other state requirements. Let’s look at the important aspects of the process of forming a new business in the state.
1. Name your Corporation
One of the important aspects of any new business formation is the name. The importance of a name lies in the fact that it helps in defining a business. Here are some things to consider when choosing a business name.
- The business name should consider the product or service being offered
- The name should be easy to pronounce
- If you are planning to start a Florida corporation then the name should contain words like “corporation”, “incorporated” or “company” pursuant to FL Stat § 607.0401 (2014)
- The name may also contain abbreviations like “Corp.”, “Inc.” or “Co.”
- The name should not contain any language that implies or states that the said corporation is connected to any federal or state government agency
- The chosen business name will be included in the Articles of Incorporation Florida and hence must be distinguishable from the name of any other entity existing in the database of Division of Corporations
Once you have identified a business name the next step would be to check for name availability. If the chosen business name is available then you can reserve it for a period of 120 days pursuant to FL Stat § 607.04021.
2. Appoint a Florida registered agent
If you are planning to form a Florida corporation then one of the mandatory requirements is to designate and maintain a registered agent in the state. The need for a registered agent is for initiating service of process pursuant to FL Stat § 607.0501 (2019). This requirement is necessary for both domestic and foreign corporations. A top registered agent service like IncParadise can help you to register a Florida corporation online or offline.
We can also be your registered agent in Florida as we are compliant with all requirements of the state and can fulfill the prerequisite for Service of Process. We can also assist you with annual business maintenance as required by the state.
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3. File Articles of Incorporation with the Florida Department of State Division of Corporations
You have thought of an idea and want to transform it into a startup, where do you start? You have to first decide on the type of business entity and if you are planning to start a Florida corporation then you will need to file the “Profit Articles of Incorporation” pursuant to Chapter 621, F.S. (Profit) and Chapter 607 – Florida Business Corporation Act § 607.0120, 607.0202, 607.0203, and 607.04021.
The Articles of Incorporation in Florida has to be submitted with the Department of State, New Filing Section; Division of Corporations along with a cover letter and a fee of $70. This fee includes the filing fee and the designation of a registered agent. We at IncParadise can assist you with the process to register a corporation in Florida.
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4. Choose the Corporation’s initial directors
It is important to note that not every form of business requires a board of directors but if you incorporate in Florida then you will need to choose initial directors of the said corporation. Normally, it is the stockholders who will be responsible for electing the board of directors. The role of the board members is to help you in making important decisions related to the business and also help in satisfying various state requirements. It is also important to ensure the corporation’s initial directors have been chosen prior to filing of the Articles of Incorporation in Florida. You can have any number of board members although the number does vary according to the complexity and size of the organization.
5. Prepare bylaws for Corporation
If you incorporate in Florida then as an incorporator you will have to adopt the initial bylaws for the said corporation pursuant to FL Stat § 607.0206 (2019) unless the power to adopt bylaws is reserved for the shareholders as mentioned in the articles of incorporation Florida. There are certain provisions that the bylaws may contain. For example, you can include a proxy statement and reimbursement to shareholders in soliciting proxies.
A corporation’s bylaws are also known as company bylaws and are a type of legal document that sets forth important rules and regulations that govern the day-to-day operations of the corporation. Although a corporation needs to have bylaws in Florida State, there is no requirement for filing with the Secretary of State or the Division of Corporations.
6. Get an EIN
Once you form a Florida Corporation, your business or company may be subjected to some form of taxes. This is where having an Employer Identification Number (EIN) can be beneficial as it will not only help you in filing taxes properly but may also be required for opening bank accounts. The EIN is a unique nine-digit tax ID number also known as the Federal Employer Identification Number (FEIN) and is issued to businesses by the Internal Revenue Service (IRS). You can apply for and obtain the EIN before or after you register a Florida corporation online.
7. Hold an organizational meeting
An organizational meeting is also known as a corporate meeting and is considered as one of the basic formalities of any professional corporation. Once you have decided to form a Florida Corporation, you will need to conduct an organizational meeting to define and execute the following tasks:
- Drafting the Articles of Incorporation Florida also known as the articles of formation or new business formation documents in different states
- Officer elections
- Distribution of corporation’s initial shares
- Drafting as well as approving all corporate bylaws
In order to incorporate in Florida, you need to hold an organizational meeting and you should have a clear agenda. The agenda may vary from one corporation to another but it takes into account the above and also focuses on certain other areas like voting for acceptance of the corporate seal or adopting the banking resolution of the said corporation.
8. Open a bank account
Once you start a Florida corporation; it is imperative that you have a business account for your company. This account is known as a business bank account or checking account. The primary aim of this account is to ensure your business finances including expenditure and earnings remain separate from your personal account. This will not only help in proper management of finances and auditing but also help in smooth filing of tax returns. Some of the top reasons for using a business bank account are:
- Helps in limiting your personal liability
- Accurate bookkeeping can be extremely challenging and a business bank account makes it easier
- Having a business bank account helps in building trust and credibility with existing and future clients
Starting a business bank account will definitely maximize the benefits of incorporating in Florida and hence it is essential to consider certain aspects prior to taking a decision of opening such an account. Some of the key aspects include bank fees, transaction limits, additional debit cards, and ease of accounting integration.
9. File your annual report
Normally, in most states in the USA, one of the important yearly reports submitted by a business is the Annual Report. If you register a corporation in Florida then an annual report has to be submitted with the Florida Department of State pursuant to FL Stat § 607.1622 (2019). Submission of an annual report will ensure your company is able to maintain a good standing with the state and as a result, it can continue to operate.
The first annual report has to be delivered to the Division of Corporations or submitted online between January 1 and May 1 in the year following the year you register a corporation in Florida.
For example: If you register a Florida corporation online on Nov 05, 2021 then you will have to file your annual report between January 1 and May 1, 2022. Subsequent annual reports have to be filed by May 1 of each calendar year there onwards. If you fail to file your annual report on time then there is a late fee of $400.