How to Register a Corporation in Florida?
You can start a Florida corporation in any industry in the state as it is home to the 3rd largest civilian labor force in the country. We have created this guide that provides information on several aspects of new business formation and operation like incorporation process, benefits of incorporating in Florida, preparing bylaws, naming your business, organizational meeting, and opening a bank account among others.
A traditional or C corporation is one of the oldest forms of business. There are specific advantages that this type of a business entity has and hence if you start a Florida corporation then you can leverage such advantages. Some of the biggest corporations based in Florida include Jabil Inc., Publix Super Markets Inc., Southern Glazer’s, H.I.G. Capital, World Fuel Services Corporation, L3Harris, and NextEra Energy Inc., among others. In order to start your business in the state, you will need to register your Florida Corporation online or offline but it is important to understand the different types of corporations that can be formed in the state. They are:
- C corporations
- S corporations
- Nonprofit corporations
- Professional Service corporation
- Social Purpose corporations
- Benefit Corporations
Entrepreneurs and small business owners normally opt for a C or an S Corporation as they have salient benefits over other forms of business entities.
What is a Florida Corporation?
A traditional corporation also known as a C Corporation is one of the oldest legal entities in the world. If you incorporate in Florida then it would be an entity with its own rights as well as responsibilities. A traditional Florida corporation can be categorized in accordance to its tax status. Some examples of these categorizations include, a C-Corporation or an S-Corporation. A traditional corporation has the following:
- Directors – Whether you register a Florida corporation online or offline, directors are an important part of the corporate structure. They are elected by shareholders and are responsible for the overall planning and management of the company. For example, they are responsible for approving different types of corporate activities and transactions.
- Officers – They are specific persons hired or employed by the board of directors. They are mainly responsible for handling all day to day operations of the entity.
- ass=”mt5″>Shareholders – The shareholders are the owners of a corporation. Their ownership in the said corporation will be according to the apportioned ownership interest in the entity.
What are the benefits of incorporating in Florida?
Florida is a great state for startups as it has a pro-business environment and robust infrastructure. If you are planning to form a Florida Corporation then you can leverage several advantages including Foreign Trade Zones (FTZ) and Opportunity Zones. Some of the significant benefits of incorporating in Florida are:
- Helps in generating capital – Every company or new business requires capital to initially begin operations and to sustain its operations in the long-term. Once you form a Florida Corporation; you may also require capital depending on the type of business activity. This is one of the important benefits of incorporating in Florida and some of the options for small business loans or capital include Enterprise Florida Microfinance Guarantee Program, Angel investors, Venture capital, and Bootstrapping among others.
- Tax Climate – When you start a Florida corporation, one of the things you need to consider is the tax climate. Currently, Florida is ranked among the top 5 best states where a good tax climate is concerned. The state does not have an individual income tax and its corporate income tax rate at 4.50% is lower than New Jersey’s (11.50%), Pennsylvania’s (9.99%), Iowa’s (9.80%), Nebraska’s (7.81%), and Kansas’ (7.00%) among others.
- Business incentives – One of the benefits of incorporating in Florida is that the state offers a variety of incentive programs for different types of businesses as well as industries. Some of the top incentive programs include:
- Capital Investment Tax Credit
- High Impact Performance Incentive
- Brownfield Incentives
- Quick Response Training (QRT) Machinery and Equipment Sales Tax Exemption
- Research & Development Equipment Sales Tax Exemption
- Clean Energy Incentives
- Research and Development Tax Credit
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.
IncParadise can assist you with new business formation in California!
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.
Know more about starting a Florida Corporation
There is a process to incorporate in Florida and more often than not, you will be face-to-face with questions that are integral towards making an informed decision. The questions may vary from benefits of incorporating in Florida to disadvantages or even dissolving a corporation. Hence, we have created this section of “Frequently Asked Questions” for addressing some of the most common queries that a startup or entrepreneur may have.
Why is Florida a great place to start a Corporation?
Florida is considered to be an excellent place to start a business especially if you are planning to start a Florida corporation. The state has a strong economy with a GDP of $1.1 trillion as of 2020. There are many benefits of incorporating in Florida like the pro-business state tax policy along with several high growth industries like agriculture, tourism, aerospace and aviation, life sciences, international trade, and financial services. There are several other reasons why entrepreneurs prefer Florida and they are:
- Overall low tax burden
- Access to investment capitalists and angel investors
- Consistent growth and revenue in the tourism sector
- Foreign trade zones and opportunity zones
- Variety of business incentive programs for small businesses
- Low startup costs
- Availability of small business grants
How much does it cost to incorporate in Florida?
If you are planning to register a corporation in Florida then there is a one-time cost of $70 for both domestic and foreign corporations and this includes a filing fee of $35 and registered agent designation of $35.
What are the annual costs associated with a Florida Corporation?
If you form a Florida Corporation then there are certain annual costs associated with new business formation pursuant to the 2019 Florida Statutes, Title XXXVI – Business Organizations, Chapter 607 – Florida Business Corporation Act. One of the important annual costs is that of an annual report and the fee is $150. Apart from the annual report, there will be other costs if you register a Florida corporation online like name reservation fee of $35. You will also need to obtain a business license or permit and the fee depends on the type of business activity.
Are there any disadvantages in forming a Corporation in Florida?
There are several aspects you need to consider in order to start a Florida corporation and these include advantages as well as disadvantages. Although the benefits of incorporating in Florida far outweigh the disadvantages, it is important to identify the same. The main disadvantages are:
- Double Taxation – Unlike an S corporation or a limited liability company, a C corporation is subject to double taxation. This simply means that a corporation is taxed on the profits and the shareholders on any distributions received from the business.
- Regulatory Complexity – If you register a Florida corporation online then you will be required to adhere to its strict regulatory requirements and that can reduce flexibility in many areas including to the company structure or minutes of the meeting.
Who can be a registered agent for your Florida Corporation?
The 2019 Florida Statutes, FL Stat § 607.0505 (2019) states that each domestic and foreign corporation transacting business in this state has to continuously maintain a registered agent. If you are planning to incorporate in Florida then you can hire IncParadise as we are well versed with the Florida statutes and requirements of incorporation. We can help you to file Articles of Incorporation in Florida and be compliant with annual business requirements and regulations. We are one of the top registered agents in the state and have assisted with the formation of more than 10,000 businesses.
Do all Corporations need a business license in Florida?
Yes. If you form a Florida Corporation then you will not be able to make your business operational until you apply for and obtain the relevant business licenses and permits. The type of business license required will depend primarily on the business activity and also on the location of the business as Florida issues both industry specific licenses and county licenses or permits. You can subscribe to our Business License Research Report service as it provides detailed information on several aspects of licensing in the state.
How to qualify a Foreign Corporation in Florida?
You can start a Florida corporation as a foreign entity but the process of incorporation would be different from that of a domestic entity. As a foreign corporation, you will not be able to transact in the state until you obtain a certificate of authority from the Department of State pursuant to FL Stat § 617.1501 (2019). This process is also known as Profit Qualification or Foreign Qualification. You will be required to submit an original certificate of existence and a cover letter along with the Application by Foreign Corporation for Authorization to Transact Business in Florid pursuant to FL Stat § 607.1503 (2019).
How do I dissolve my Florida Corporation?
Once you register a corporation in Florida, it becomes operational but if you want to close your business then there is a process that you will be required to follow. This process is called “dissolution” and you will be required to submit Articles of Dissolution pursuant to FL Stat § 607.1403 (2019). You can file these articles online (e-filing) or submit the Profit Articles of Dissolution application with the Amendment Section to the Division of Corporations along with a cover letter and filing fee of $35. It is important to note that the articles of dissolution for a corporation are different for corporations that have issued shares and those that have not issued any shares.
Ready to Start a Florida Corporation?
Florida is considered by entrepreneurs as one of the top states to register a new business. You can choose a wide variety of business structures although the benefits of incorporating in Florida makes the corporate structure extremely popular. There is a process to form a Florida corporation and it requires submission of documents and inclusion of information pertaining to the business.
IncParadise is one of the reputable registered agents in the state and can assist you with any query pertaining to incorporation and also help you to form a corporation in Florida. We also offer a wide variety of additional services in Florida like foreign qualification, and EIN assistance.