By: Samantha Pederslie

‍

Are you looking to incorporate in the sunny state of Florida? Read on to find out everything you need to know in order to incorporate in Florida.

Incorporating in Florida

Incorporating in Florida provides a number of benefits. You are protected from any liabilities that may arise, can receive tax deductions, and can raise capital through selling shares. There are an array of resources online that make incorporating in Florida relatively simple for any entrepreneur. 

‍

What is the Cost of Incorporating in Florida?

The cost of incorporating in the state of Florida includes a base fee and some other additional fees that apply to different situations (mostly depending on your location and type of business.) The base fee is considered to be made up of the filing fee and the registered agent designation fee, which is $70. The Florida Department of State Division of Corporations has a number of additional fees on their site; these are the most common ones:

• Certificate of Status: $8.75
• Certificate Copy: $8.75
• Foreign name renewal: $87.50
• For-profit reinstatement: $600.00
• Non-profit reinstatement: $175.00
• Inactive business's resignation of registered agent: $35
• Active business's resignation of registered agent: $87.50

‍

Forming an LLC in Florida

In order to form an LLC in the state of Florida, you need to obtain a number of permits and licenses (and fill out paperwork.) The specific permits, licenses, and paperwork needed will vary depending on the industry that you wish to operate in. If your company has two or more members, it’s recommended (but not required) that you get an operating agreement. This document explicitly states the expected roles of each member in the company. As always, you can file these documents online in order to form your LLC in Florida.

‍

‍

Taxes and Fees for Filing for LLC

Filing for LLCs and corporations have two different sets of  fees. In this case, the LLC filing and registered agent fees comprise a base fee of $125. Here are the most common ones:

• Filing for LLC: $100
• Registered agents: $25
• Change the registered agent: $25
• Obtain a certified copy of record: $30
• Obtain a certificate of merger: $24
• Correction articles: $25
• Reinstatement: $100
• Annual report: $138.75
• Late fee for annual report: $400.00

As always, you should perform due diligence by frequently checking with the proper regulatory organizations about their policy. Depending on the industry you’re in, the terms for renewing an LLC in Florida can change.

Necessary Documents

To operate your business legally in Florida with a business license, you’ll have to fill out various required documents. Again, the types of documents that you’ll need to complete will vary depending on the type of license you’d like to obtain. Simply download an application, complete it, and submit the required additional documents.  

The IRS will provide you with a tax identification number (TIN), which is also required in order to operate your business legally.

Advantages of Incorporating in Florida

Florida is particularly popular for incorporating due to the fact that there is no personal income tax, which is a great benefit to your company. More often (in other states,) 5.5% income tax applies to corporations whose (applicable) goes over $5,000. “S” status companies are considered exempt from this tax. . After your first year of operation, you won’t have to file state income tax returns. Finally, in other states, you might find that you need at least $1,000 to legally create your business. This is not the case in Florida: you can legally establish your enterprise without any such minimums.

Florida’s laws make it simple for sole proprietors and entrepreneurs to start their enterprise, because a single person is legally allowed to hold multiple titles within a company. For example, you can be identified as the president, treasurer, and secretary of your company. 

Many consider Florida to be particularly business-friendly, given the fact that they have relatively minimal requirements when it comes to corporate reporting.

‍

‍

Making the Decision to Incorporate

Should you incorporate in the first place? Depending on the business type, you can gain varying benefits from liability protection and tax savings. If two or more people own your business, it's classified as a partnership. This means that all involved parties are responsible for their share of profits,  losses, and also liabilities. 

A partnership can create sizable liabilities to the partners, especially when one party doesn’t pay their share of the company’s debts. Given the nature of co-reliance, it’s generally best to choose partners who complement your skills. "Limited Liability" explicitly indicates that owners will not be held personally liable for business issues. In the case of co-founders, each party is obligated to pay self-employment tax, and taxes on their shares of the profit. Of course, these profit shares should be stated clearly beforehand in a business agreement. Additionally, each party is responsible for filing a tax return individually. 

If you’re thinking about mobilizing your business idea, look no further than MassLight for your technical needs. Check out our build-for-equity program where we bring you sophisticated, customized software in exchange for equity in your startup! Be sure to contact us if you’d like to tell us about your business idea, or if you have any questions. 

‍