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