How to Start a Business in Florida – Part 2: Legal

We recognize that starting a business can be simultaneously satisfying and frustrating. With the lowest income taxes in the nation, Florida is an excellent place to start your business. In an effort to make the process painless and easy to understand, we have outlined seven steps across a three part blog series focused on getting your business started. Part 2 of this blog series features the critical step of getting everything legal. If you’ve missed Step 1 – visit our blog about structure. 

2. Write a Business Plan: This plan is needed to obtain financing or potential investors for your business and requires asking yourself some questions to determine in which direction you want your business to go. What sort of problem am I trying to solve? What will set my product (or service) apart from others already in this business? Who are my potential customers? How can I get, and keep, their attention? What will it take for me to convert them into buyers/users of my product/service? What type of marketing presence will work best for my business? What type/size office space will I need? The US Small Business Administration website is a very good resource for developing a business plan:

3. Build a Team – Attorney, CPA, Payroll, & Insurance: You cannot know it all, you need members on your team that can handle very specific functions so that you can focus on your business. Having the proper members on your team will allow you to overcome some of the bumps you will face as your business grows. We have a list of CPAs, payroll companies, and insurance agents that provide great services at reasonable prices. Always make sure to do your own research. How much insurance coverage will your company require – for the business itself and possible employees? How much money are you expecting to be coming in/going out? Will you have employees? Are there contracts needed to be drafted? How about vendor contracts? Engagement letter? Answering these questions will help you determine the type of professional assistance you will need when starting a new business.

4. File any necessary documents with the State (license, permits, etc.): As discussed above, some business structures require that you file document with the Florida Department of State. Each of these requires an annual registration as well as an annual fee of around $75.00 to $150.00.

If you chose to use a corporate structure, you will need to file Articles of Incorporation. Articles of Incorporation must include the following: the name of the corporation, including a corporate suffix (Corporation, Corp., Incorporated, Inc., Company, or Co.), the principal place of business, the mailing address of the corporation, the specific purpose for the corporation, the number of shares of stock that this corporation is authorized, the name and address in Florida for the registered agent, and the names and addresses of the incorporator (which is the person who prepares, signs and files the Articles of Incorporation). If there is more than one shareholder, we recommend you enter into a shareholder agreement in order to establish ownership interest and management, create boundaries for duties, and to create a mechanism for resolving disputes between the shareholders and winding down the business if needed.

For an LLC, you will need to file Articles of Organization. The Articles of Organization must contain the following: the name of the LLC, (which must contain the words limited liability company, L.L.C., or LLC), the mailing address for the business, the street address of the principal office, the name and address in Florida of the register agent, the name and address of each person authorized to manage and control the LLC, and the effective date of the LLC. While it is not currently required to include the name and address of each person authorized to manage and control the LLC, it is beneficial to include it as financial institutions generally require this information to be recorded with the Florida Department of State in order to open an account. It is also required for the Department of Financial Services to issue Workers’ Compensation. We recommend the owners enter into an operating agreement, which can be very similar to a shareholder’s agreement.

5. Get an EIN: A federal employer identification number (EIN) is a nine-digit number the IRS assigns to businesses for tax filing and reporting purposes. The IRS uses the EIN to identify the taxpayer. EINs must be used by most business entities such as corporations, partnerships, and LLCs. Most sole proprietors do not need an EIN and can use a social security number instead. However, an EIN is required to set up a bank account, hire employees, have a Keogh or Solo 401(k) retirement plan, buy or inherit an existing business that you operate as a sole proprietorship, incorporate, form a partnership, form an LLC, or file for bankruptcy. Even though it is not legally required for you to register an EIN, we recommend that you don’t skip this step.

We hope we have helped answer your questions and we would love to be on your team and help your business grow! Call to set up a consultation with Mallory Brown or Thomas Thompson at (850) 386-5777.

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