| If you are interested in starting your own business in | | | | the state filing fee is $70.00. For an LLC, the state filing |
| Florida, there a variety of things you need to consider | | | | fee is $125.00. |
| before you get your new business off and running. | | | | Dealing with Business Partners. If you have more |
| You may not be sure where to start or feel intimidated | | | | than one person who will own the business, then you |
| by the prospect of having to deal with starting a new | | | | may want to consider entering into an agreement |
| business. The purpose of this article is to provide you | | | | which defines the relationship between and among the |
| with basic information you need, step by step and in an | | | | business owners and the corporation or LLC. Such an |
| easy to follow format, as to how start and incorporate | | | | agreement would govern management issues, |
| your business in Florida. In starting a new business, you | | | | distribution of profits, capital contribution requirements, |
| should proceed as follows: | | | | sale and transfer of ownership rights, termination of |
| Choose a legal entity. Before you begin your | | | | ownership, and other issues. If your business is a |
| business, you will need to operate your business in | | | | corporation, then you should consider entering into a |
| some way or another. Generally, you can operate | | | | shareholders agreement. If your business is an LLC, |
| your business as a sole proprietorship, corporation, or | | | | then you should consider entering into an operating |
| LLC. If you operate your business as a sole | | | | agreement. |
| proprietorship, "you" are the business. This means that | | | | Get an EIN. Once you have incorporated, your |
| all of the debts of the business will be your personal | | | | next step is probably to open a bank account for your |
| debts. In other words, you will be 100% personally | | | | new business. Before you do that, however, you will |
| responsible for all of the debts of the business. With | | | | need to get an Employer Identification Number ("EIN") |
| such liability exposure, operating your business as a | | | | for your business. You can obtain an EIN for your |
| sole proprietorship is generally not a very good idea. | | | | business entity through the IRS either online or over the |
| So, ultimately, your options come down to forming your | | | | phone. |
| business as a corporation (i.e., an "S" corporation), or as | | | | Registration of Taxes in Florida. Depending on the |
| a LLC. | | | | type of business you plan to operate, you may have |
| LLC's or "S" Corporations. LLC's and "S" | | | | to collect and pay sales tax to the State of Florida. To |
| corporations are very similar and offer significant | | | | register to pay sales tax, you must contact the Florida |
| benefits to a business owner. We compare the two | | | | Department of Revenue and obtain a certificate of |
| forms of business enterprise as follows: | | | | registration by completing and submitting form DR-1, |
| (a) Limited Personal Liability. "S" corporations and LLC's | | | | Application to Collect and/or Report Tax in Florida. In |
| both have the significant benefit of providing limited | | | | addition, your business may have to register to pay |
| personal liability to its owners. This means that the | | | | unemployment taxes in Florida. Form DR-1 may also |
| owners of the corporation or LLC are not personally | | | | be used to register your business to pay |
| responsible for the debts and obligations of the entity, | | | | unemployment taxes in Florida. You would need to |
| unless the owners are engaging in some kind of illegal | | | | contact the Florida Department of Revenue for further |
| or fraudulent conduct. | | | | information. |
| (b) Ownership requirements. "S" corporations may be | | | | Licensing. With a new business, you will likely need |
| owned only by U.S. citizens or resident aliens and | | | | to obtain an occupational or business license through |
| cannot generally be owned by other corporations or | | | | your county and/or city. Check with each government |
| entities. LLC's do not have these ownership restrictions. | | | | unit to apply for an appropriate business license. If you |
| Therefore, if you are planning on having a foreign | | | | are planning on providing professional services (e.g., real |
| citizen or corporate entity with an ownership interest in | | | | estate agent, architect, podiatrist, etc.), then you may |
| your business, then an LLC, rather than an "S" | | | | also need to register at the state level with the Florida |
| corporation, may be the right form for your business. | | | | Department of Business and Professional Regulation. |
| (c) Pass Through Taxation. Both "S" corporations and | | | | Financing. In starting a new business, you may |
| LLC's offer the significant advantage of "pass through" | | | | need outside financing to cover the expenses of |
| taxation. This means that income and profits of the | | | | getting your business going. One source of potential |
| business are not taxed at the entity level. Instead, | | | | financing is obtaining a loan through various loan |
| those profits pass through directly to the shareholders | | | | programs administered by the Small Business |
| owners and are reported on the owners' individual | | | | Administration ("SBA"). You can contact a local SBA |
| income tax returns. In reference to taxation, however, | | | | office to ascertain whether your business may qualify |
| "S" corporations offer an advantage over LLC's in that | | | | for a business loan through the Small Business |
| the shareholders of an "S" corporation do not have to | | | | Administration. |
| pay payroll taxes (social security or medicare taxes) | | | | Other Sources of Assistance. You can obtain |
| on their portion of the business' profits. | | | | additional assistance and guidance in starting your |
| In general, for a prospective small business owner in | | | | business in Florida through such agencies as SCORE |
| Florida, the likely choice of business is either an "S" | | | | and Small Business Development Centers ("SBDC"). |
| corporation or an LLC. | | | | There are numerous SCORE and SBDC offices |
| Get Incorporated. Once you have chosen your | | | | throughout Florida. These agencies provide counseling |
| corporate structure, you must incorporate the entity by | | | | and all sorts of other business-related assistance to |
| filing your entity's articles with the Florida Department | | | | entrepreneurs and new business owners. |
| of State, Division of Corporations. For a corporation, | | | | |