Florida Corporation
Forming a Corporation in Florida
How to Form a Corporation in Florida. Benefits, process, forms and a step by step guide.
Some people have the dream of building their own business or marketing an idea.
For these people living in Florida, the dream is not that far
away.
Forming a corporation in Florida is neither a hard process nor an endless one.
Many sources both online and in print will help with this process.
Each state has slightly different laws surrounding the creation
of a corporation, but the benefits are worth the small amount of
trouble.
Advantages of a Florida Corporation
There are quite a few advantages of creating a Florida corporation as opposed to a DBA or an LLC.
First, Florida corporations have an unlimited life.
Business owners do not need to re-file or re-form a corporation after just a few years.
Second, Florida corporations offer limited liability protection to shareholders, which give more protection to investors.
In addition, shares in a Florida corporation are transferable.
Finally, by creating a corporation in Florida it is possible to reduce personal income taxes.
With these advantages in mind, what are the steps to forming a Florida corporation?
Forming a Corporation in Florida
The steps to forming a corporation in Florida are not much different than forming a corporation in most states.
The first step in the creation of a Florida business is to choose a name for the business and check with the Florida Department of State Division of Corporations for availability.
When doing this step make sure to follow trademark law before picking a name others might have.
In addition, Florida law requires that the name include the words company, incorporated, corporation, or the abbreviations of those with the same names.
The name must also not be linked to any government or state agency.
The second step in the Florida corporation creation process is to appoint or recruit a director.
Florida law requires at least one director, they must be at least 18 years old, and the bylaws of the corporation must state how the corporation is to be directed.
Next, file with the Florida Division of Corporations Website, which contains samples and instructions on how to fill out the proper Florida business forms to create the Florida corporation.
There is only a simple fee of 70 dollars and the process can be completed online.
Fourth, if the bylaws were not already drafted, it is important to create them.
Florida laws do not prescribe a certain form or format, but generally, bylaws include how the business is conducted and responsibility of corporate officers.
The fifth step in the process is to hold an organizational meeting. Florida Statute chapter 607.0205 covers organizational meetings for anyone unfamiliar with this process.
Essentially, the
meeting includes appointing directors, corporate officers, adoption of
bylaws, authorize issuance of stock, set accounting year, choose a bank,
and finally, select a corporate seal.
The Organizational Meeting
This initial meeting must be recorded in meeting minutes and kept on file.
Like the organizational meeting, Florida business statutes govern the next step in the process, which is issuing stock certificates to the initial owners.
A stock certificate is a Florida business form that certifies ownership of a number of shares in the corporation.
Licensing, Banking, and Taxes
The next consideration is to obtain any required local licenses. Depending on the type of business, local considerations such as chemical laws, merchandise purchasing requirements, or other operating permits may be required.
To get information on any of these, contact the local chamber of commerce.
Finally, picking a bank and determining tax issues are the last two steps in the creation of a Florida corporation.
For this purpose the state has a start-up kit for any new business and once the creation documents have been filed for creation, the start-up kit will be sent to the filer.
Florida’s current tax law rates corporations at a 5.5% tax rate, but the first 5000 dollars of net income is exempt from taxation.
While
these are the steps for creation of a corporation in Florida, what
other issues does a business owner need to know?
Required Annual Reporting
In addition to the general steps, like most states, Florida requires business owners to complete a couple of other steps.
First, every corporation in Florida must file an annual report with the Division of Corporations.
The filing fee for the report is 150 dollars.
The legal documents needed can be found listed under Florida statute chapter 607.1601 and chapter 607.1602.
In addition to the state, law also requires that business owners send a financial disclosure to shareholders within 120 days of the proclaimed fiscal year.
As seen, the creation of a Florida corporation is not a hard process. It does require a little bit of work, but the creation process is designed to be quick and easy to let business owners deal with harder problems like marketing and hiring employees.
Online and printed resources are a great resource to helping with the process.
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