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’re protected from any liabilities that may arise, you receive tax deductions, and you 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 is made up of a base fee as well as 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; we’ll list the most commonly-paid ones here:
- 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
If you want to form an LLC in the state of Florida, you need to obtain a number of permits and licenses, and fill out paperwork. The type of permits, licenses, and paperwork that you’ll need to file will vary depending on the industry that you wish to operate in. If your company has two or more members, it’s recommended that you get an operating agreement. It’s not required, but it 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 an LLC has its own set of fees that are different from corporation fees. In this case, the LLC filing and registered agent fees are considered the base fee ($125.) Once again, we’ll list 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.
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. Once you decide on what application you’d like to fill out, you can download it online and then receive a list of the required supplementary documents.
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. In other states, corporations can be charged 5.5% income tax on their taxable income when it exceeds more than $5,000.
Your company will be exempted from the 5.5% corporation tax in Florida if it falls under the “S” status, since it’s considered non-taxable. After your first year of operation, you won’t have to file state income tax returns. Additionally, Florida is more flexible in that there’s no minimum capital requirement to create a corporation. In other states, you might find that you need at least $1,000 to legally create your business.
Florida’s laws make it simple for sole proprietors and entrepreneurs to start their business, 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, or should you not incorporate? Depending on the business type, you can gain varying benefits from liability protection and tax savings. If you have two or more people owning your business, it would be classified as a partnership. This means that all involved parties are responsible for their share of the profits, their share of the losses, and also their 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. In an LLC, 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. In the case of an LLC, the owners are protected from personal liability occurring from business-related actions.
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