In this guide, we have outlined the steps in starting a small business in Florida. Florida is known as the sunshine state. In the United States, it is the nation’s third-biggest by population.
It is a state that boasts of hundreds of miles of beach and glamorous cities. The state has a unique natural beauty, as well as no state income tax and most importantly, relatively low property taxes.
Florida has over 19 million residents who are entrepreneurially minded. A lot of them are interested in starting a small business in Florida. We have therefore provided a comprehensive guide on starting a small business in Florida.
The Steps in Starting a Business in Florida
Here are the general steps involved in starting a business in Florida.
- Choose your entity type
- Register your company with the Department of State
- Register the business name
- Register for an Internal Revenue Service Employer Identification Number (EIN)
- Register with the Florida Department of Revenue (DOR)
- Fund the Business
- Register for the new hire program
- Apply for a business license, permit or registration
- Check local regulations and requirements
- Open a business bank account
1. Choose your entity type and business structure
This step depends on the business type or industry. There are businesses that require a specific type of business structure depending on the industry or the required licenses of the profession.
It is at this stage that you will also decide whether your business is for-profit or not-for-profit.
It is important to also note that the business type you choose can have implications for taxes, as well as other business operation aspects.
Your options for business structures in Florida are:
- Corporation
- Limited Liability Company (LLC)
- Partnership, General Partnership
- Limited Partnership
- Sole Proprietorship
It is advised that you consult with your legal and financial advisors in order to determine the best fit for your business.
2. Register your company with the Department of State
Register with the Department of State by completing and submitting the Articles of Incorporation found on Florida’s Department of State Website. To register for this, the following information has to be gathered:
- Business Name
- Principal Place of Business Address & Mailing Address
- Registered Agent’s Name, Address & Signature
- Corporate Purpose
- Effective Date
- Stock Shares
- Payment
Business Name
Your business name needs to be distinguishable. It cannot be the same as that of another business even when modified by articles, pluralization, abbreviations, or punctuation.
You can search your proposed business name at the Division of Corporations. At that division, if you see “INACTIVE” or “INACT,” that means the name is available for use. On the other hand, if you see “ACTIVE,” “ACT,” or “INACTIVE/UA,” that means the name is not available for use.
Principal Place of Business Address & Mailing Address
This talks about the street address where your business will be located. If your mailing address will be different (P.O. Box or otherwise), you will also need to submit that.
Registered Agent’s Name, Address & Signature
The registered agent is the individual who will accept the service of process on behalf of the business entity.
It is important to note that the registered agent may be an individual or a business with an active Florida filing.
However, a business may not serve as its own registered agent. An individual or principal associated with the business may be the registered agent.
Corporate Purpose
You will need to define one specific purpose for your business, such as “digital marketing” or “practicing medicine”.
Effective Date
Typically, a corporation’s effective date is regarded as the date the Division of Corporations receives and files your articles of Incorporation unless you specify an alternative date.
It is important to note that the date can be no more than five business days prior to or 90 days after your articles of Incorporation are received by the DOC.
If you are establishing a corporation, you must enter the number of stock shares your corporation will use.
The number of shares that your corporation will use is dependent on the number of people who own a portion of the corporation.
For example, if the corporation will have just one owner, you can establish it with just one share. That could be valued 100% ownership.
However, if you have several owners, you can establish it with as many shares as needed, each share having an equal interest in the company.
Payment
Submitting your payment is also important when you file your Articles of incorporation. If you want to pay by credit card, you will need to file online. If not, you can mail in your documents with a money order.
3. Register the business name
According to the Fictitious Name Act (s.865.09, F.S.), it is required that any person or business entity register a “fictitious name”, also known s a “doing business as”(dba) name, with the Florida DOS prior to conducting business in the state.
However, if you have filed as a sole proprietorship, and your business has a name that is not your own, you must register this as a fictitious name. Also, if you have formed a corporation, LLC, or other separate legal entity, and the business name is by no way what you registered, you will need to file a fictitious name.
To check the specific requirements as well as exemptions from this step, visit the Florida DOS website to learn more.
4. Register for an Internal Revenue Service Employer Identification Number (EIN)
An Employer Identification Number serves the same purpose to a business as a Social Security Number serves to an individual.
With that number, you will be able to open your bank account for business, you can be able to establish business credit, hire employees more easily, and apply for business licenses.
To obtain an Employer Identification Number, fill a Form SS-4 with the IRS. You will, however, only need an EIN in the circumstances such as:
- Your business has employees
- You filed as a corporation or partnership
- Your business is involved with a trust, estate, non-profit, or farmers’ co-op
If none of the above applies to you, then you are not required to register for an Employer Identification Number.
However, for a business savings account, loan, BLOC(business line of credit), or even other business accounts, most banks will require one.
5. Register with the Florida Department of Revenue (DOR)
Paying for Sales and Use Tax, as well as Corporate Income Tax, are some of the common reasons you need to register with the Florida Department of Revenue. We will talk about each.
Sales & Use Tax
When it comes to Sales and Use Tax, you will need to register as a Sales and Use tax dealer. These taxes apply to the sale, rental, lease, or license of certain services, commercial property, and goods.
The sales and Use Tax is to be collected at the time of each sale and is due to the DOR at the end of each reporting period.
Corporate Income Tax
All corporations, LLCs, and partnerships that are doing business in Florida must file for Florida’s Corporate Income Tax.
There are many tax incentives that you may adopt in order to abate these costs. Examples are operating within a designated rural county, and rehabilitating a brownfield site or site that has been contaminated with dry-cleaning solvent.
For you to file Corporate Income Tax, your business has to submit the Florida Form F-1120. This can be done on or before the first day of the fourth month following the close of your business’ tax year.
It is important to note that if your business owes more than $2500, you are eligible to pay estimated taxes which are due on the last day of each quarter of your business’ tax year.
6. Fund the Business
There are various ways to fund a new business. They are:
- Business Administration (SBA) loans
- Short-term loans
- Credit cards
- Crowdfunding
There are others also. Florida’s Small Business Development center provides helpful resources and offers free financial advice for new entrepreneurs regarding funding options.
7. Register for the new hire program
All employers are required by federal and state law to report newly hired and re-hired employees to the DOR. There are a variety of ways to report new hires, including online, electronic reporting, and by mail or fax.
To get more information, check the website of the Florida Department of Revenue, Child Support Services for Employers.
8. Apply for a business license, permit or registration
For businesses that deal with a skilled trade, most likely, you will need to apply for a business permit or license.
There is a wide range of industries that Florida’s Department of Business & Professional Regulation (DPBR) licenses. Industries such as:
- community association managers,
- geologists and
- restaurants.
While businesses like private investigators and agricultural dealers are licensed by Florida’s Department of Agriculture & Consumer Services (DACS).
If you are searching for information on permits, licenses, and registrations, the State of Florida’s Business Information Portal provides information on all that.
9. Check local regulations and requirements
There is a need to check local regulations by local county and municipal governments. They might also require additional permits as well as licenses.
Therefore it is necessary that you check your local county or city’s website to ensure you are familiar with local ordinances, as well as any other requirements that they are asking for, for opening a new business.
10. Open a business bank account
Having a bank account is a good idea. This will help you keep business and personal finances separate. This will go a long way to reduce confusion at tax time or during audits.
The steps listed above are general steps when it comes to starting a business in Florida. Are there steps you think shouldn’t be on this list when it comes to starting a Small Business in Florida? Please share your thoughts below.
