From Idea to Incorporation: Legal Steps to Launch Your Business in Florida

The Sunshine State is home to epic theme parks, like Walt Disney World; major universities, like Florida State; and mega grocers, like Publix. But in addition to those massive brands, it’s also home to around 2.8 million small businesses. Whatever you’re selling; someone in Florida is buying, whether they’re tourists, beachgoers, snowbirds, or lifelong residents. 

With two coasts, numerous thriving metropolitan areas, and a rich history and culture, you’re sure to find Florida offers a warm welcome to business owners like you. Read on to learn how to start your own Florida LLC or other small business. 

Understanding Business Structures in Florida

Like anywhere else in the U.S., there are several types of business structures you can start in Florida. The most common include:

• Sole Proprietorships: This is one of the most popular types of businesses, but it isn’t a legal business structure. It’s simple to start and run, but you don't receive any liability protection because it isn’t an official business entity.

• LLCs: A Limited Liability Company is the most popular choice of legal business structure, and for good reason. It isn’t complex, offers great flexibility at a reasonable cost, and provides liability protection to keep personal assets safe.

• S Corps: An S Corporation can help business owners save on taxes. It offers the same liability protection as an LLC but comes with stringent requirements that can’t be met by every business owner.

• C Corps: The largest business structure, C Corps are usually a better choice for bigger, fast-growing companies that want to trade publicly, look for outside funding, and expand rapidly. Forming a C Corp is more involved, but it offers great protection and stability for large businesses.

• Nonprofits: If your business focuses exclusively on the greater good, you may want to start a nonprofit. Requirements are tough to meet, but running a nonprofit can be extremely rewarding.

Choosing the Right Business Structure

So, with all those options, how do you choose the business structure that best fits your needs? It can be overwhelming, but there are a few things to consider:

• If your goal is to get started right away without spending a lot of time or money, and you’re comfortable with some financial risk, a sole proprietorship might be your best bet.

• If you want to pay less on self-employment and other business taxes, and you don’t plan on having a ton of shareholders or members from outside the U.S., you could qualify for an S Corp.

• If your driving force is super fast growth and you want to get investors and backing by leveraging ownership shares, a C Corp could work.

• If you know your organization will exclusively give back to a larger cause and you are confident you can meet all the requirements of a 501(c)(3), you might be able to start a nonprofit.

• If you’re looking for maximum flexibility at a minimum cost, with all the liability protection you need in case of unexpected legal events, an LLC is a perfect fit.

Most of the time, an LLC will meet all of your business needs. They are quick and simple to acquire, formation fees are usually very reasonably priced, and you can choose to do it yourself or get help from a business formation expert. In no time at all, you could have your Florida LLC up and running. How?

Registering and Forming Your Business in Florida

In many states, you go through the Secretary of State for business formation needs. In Florida, the state formation agency is called the Division of Corporations (don’t let the name fool you — LLCs are also handled here, and not just corporations). 

When you’re ready, you can start the formation process by filing Articles of Organization with the Florida Division of Corporations, following these steps:

• Choose a business name. It can’t be used by any other business in Florida and must include some variation of “LLC.” Do not begin using the name until your business is approved by the state.

• Supply your business address. You’ll need a principal place of business address, which should be a Florida street address, and a mailing address (if different from the principal address), which can be a P.O. Box. 

• Designate a Registered Agent. A Registered Agent is someone who receives important legal documents on behalf of your business. You’ll need their name and address when you form your business. You’ll also need their signature — electronic or otherwise — to file.

• Write a statement of purpose. This is only required if you’re starting a business in a certain profession, such as law or medicine. If you aren’t in a required profession, you can still submit a statement of purpose, but it isn’t required.

• List a manager. You may be the LLC manager, or you may list another authorized representative. This is an optional step.

• Provide contact information. You’ll need to list your own name, address, and email to receive notifications and updates about your business status. You can also update the effective date of your business (if you aren’t starting it until a future date) and request a certified copy of your Articles of Organization or a Certificate of Status.

• Pay and file. The fee for a Florida LLC is $125, made up of $100 for business formation and $25 for Registered Agent designation. You may also choose to pay $30 for a certified copy, or $5 for a Certificate of Status.

If you aren’t a Florida resident, you’ll need to get a Florida street address, which you can do by using a Virtual Address service. 

Compliance With State and Federal Regulations

To keep your business in good standing, you’ll need to comply with all Florida regulations, as well as federal laws. 

In Florida, every LLC is required to file an Annual Report to be considered “active.” You must file starting the year after formation and every year thereafter between January 1 and May 1. Filing an Annual Report with the state costs only $5, but if you do not file by the deadline, you’ll be assessed a $400 fine. If you fail to file your Annual Report altogether, your business will be dissolved by the Division of Corporations.

While you can continue operating under the registered name of your business for as long as you want, there may come a time when you wish to use a different name. In that case, it’s a little more complicated than simply starting to use the new name. In many states, you would file what’s called a DBA, or “Doing Business As.” In Florida, this is referred to as a fictitious business name. In order to legally operate under the fictitious name, you must register it with the state and pay the $50 fee. The name is good for five years, at which point it must be renewed to continue legally using it.

You’ll also want to research necessary business licenses and permits before you start your business. While there aren’t any specific state-wide licenses required, there may be permits needed for conducting international business or to meet land use requirements. 

Intellectual Property and Trademark Registration

Intellectual property is a sticky subject because it involves intangible assets, like your business name, logo, or slogan. Registering your business name during formation isn't always enough, especially if you plan to grow beyond Florida borders. To ensure no other business can use your name, logo, or other assets, you might need to file for a trademark.

You can file for a federal trademark, but you can also file for a Florida trademark or service mark, which will keep other businesses from claiming a mark that is too similar to yours or could be confused for yours. 

To do this, you can file with the Department of State and pay the fee of $87.50. You may also send a written request for the state to conduct a trademark search. This can help speed up the trademark approval process.

Tax Considerations for Florida Businesses

Every Florida business (with the exception of nonprofits) will have to pay state and federal taxes. LLCs use a “pass-through” taxation system, in which the business’s profits are reported on the owner’s personal income tax. S Corps use a similar procedure while also reducing the overall tax burden. C Corps are less favorable at tax time, and may be subject to “double taxation,” in which the business’s profits are taxed, along with shareholder distributions. 

Securing an EIN, or Employer Identification Number, can be a major benefit to your business. This tax ID tells the IRS who you are so you don’t need to use your Social Security number, keeping your personal information secure and protecting your privacy. You will also want to plan ahead for accounting and bookkeeping, whether that’s using software to DIY your records or utilizing an accounting service. It always pays to seek advice from a trusted CPA or tax professional to ensure taxes are filed correctly, with no nasty surprises.

Ultimately, starting a Florida business may seem like a lot, but you can be on your way to business ownership with a minimal investment of time and money. The best way to get started is by using a business formation professional to support and guide you through the process. They will deal with paperwork, forms, and red tape so you can keep your eyes on the prize — starting your business.