How to open a corporation in Florida?

Forida is one of the most important states in the United States, with a high population density, a huge tourist attraction and, above all, many business opportunities. 

It is also among the best states to create a company, and also to open a corporation. It also has a lot of room to expand a business, and to find possible partners and investors, being one of the main economic centers of the country. 

That is why today we will bring you a complete guide on how to create a corporation in the State of Florida in the United States of America. Let's start then.

Why open a corporation in Florida?

There is documented evidence that Florida is an excellent option to open a corporation. On this occasion, we can mention at least 3 great advantages of creating your corporation in this territory.

• Limited liability: in this state, in general, the shareholders are not directly responsible for the debts and obligations of the corporation, the only responsibility they must bear being the one that has to do with the money they have invested in the company. 
• Incentives for business growth: in Florida, you can enjoy the so-called “Target Industry Incentives”, that is, incentives in the form of tax advantages for those who meet growth objectives for their businesses. We have at least two incentives: a targeted industry tax refund (QTI) and capital investment tax credits (CITC).
• Tax benefits due to the great stability and favorable tax climate for companies registered in Florida, greatly reducing the taxes you must pay to the state compared to other federal entities.

This allows corporations in this country to have a better range of action and better incentives to grow and establish themselves in this state, for example. which is an excellent option to start a new business or create a new corporation.

Stages to open a Corporation in Florida

1.Choose a business name

The first thing you should do is choose the name of your corporation. It should be a name that expresses your company's values, preferably one that is easy to remember and catchy, as it is better for marketing. 

The name must include the words Corporation, Company, Incorporated, Limited, or their abbreviations, which following the previous order would be: Corp, Co, Inc and Ltd. You cannot use without authorization the words Bank, Credit Union, Trust, Trustee or others related to the banking sector. 

You can find out if your name is legally available, you can search it on the United States Secretary of State website.

2. Register a DBA (optional)

3. Name the directors

It is important to emphasize the importance of forming an initial board of directors in this phase of the process. This step is of utmost importance, since this is where the company's bylaws will be established. 

This board of directors will be in charge of establishing relationships with regulatory entities, in addition to organizing the operation of the corporation, as well as the initial distribution of the shares once issued.

4. Aim for a registered agent in Florida

If you are using a registered agent, you must register it in the state of your choice. A commercial agent is a professional who is in charge of managing, negotiating or carrying out commercial operations on behalf of the company. Este puede tener a su cargo varias empresas, entre ellas la tuya. 

This agent must be duly registered with the competent bodies and have the necessary permits to do so.
There are many registered commercial agents in Florida, in fact, being one of the most important corporate centers in the country, there are agents who specialize in the creation of corporations, as well as getting the best possible deals for their clients.

5. Submit the articles of incorporation

The articles of incorporation are basically forms that you must fill out with information about the corporation you are forming, and that are used to request corporation status before the IRC. 

These forms also allow the United States tax authorities to have registration of your company, necessary for your corporation to comply with the regulations stipulated in North American laws and pay taxes in the United States.

These generally include: the name of the corporation, its purpose or corporate name, the name and address of the registered agent and the type and number of shares that will be established.

6. Redactar los estatutos de la corporación

The board of directors must draft the corporation's bylaws. These are nothing more than well-established rules that will establish the governance of the corporation and should contain the command structure and responsibilities of each party. These must contain:

• How many shares your corporation can establish.
• How many directors are required.
• The procedures for meeting and recording records.

It is important that this step is completed, since, despite not being necessary to be up to date with the state, they will be necessary later in case legal help is needed and to establish an operational order in the company.

7. Draft a shareholders agreement

The shareholders' agreement is a contract in which the responsibilities and interests of each owner are stipulated. This agreement will protect shareholders in the event that certain events take place. It will be used in two cases:

• If one of the owners dies.
• If the transfer of their shares to a third party occurs.

In general, this agreement is extremely useful to face unexpected events and establishes the actions that must be taken in case of any of these.

8. Hold the first meeting of the board of directors

The first meeting of the board of directors, regardless of how many directors there are in the corporation, must be attended by all of them. Otherwise, the corporation will lack direction and clarity when making important decisions. It is necessary for all directors to be clear about their place within the company, in addition to their responsibilities. That is why at the initial meeting the following points must be established:

• The company's bylaws must be adopted.
• Designation of corporate officers.
• Authorizations to issue shares.

On the other hand, if your organization will later apply for S Status, you must also establish it at this official meeting: making each of the directors understand the requirements of this corporate Status.

9. Issue shares

Now comes the time to issue the shares and put them up for sale. At this moment the number of shares that each owner will have is established, but also if you want to make an initial public offering. At the initial meeting, as we already said, you must establish which directors have the authorization to issue shares. Having established this, you must have a record of the following:

• The buyers of the shares.
• How many shares they bought.
• How much the shares cost, a price that will be given by the market from the initial price that you established.
• When the shares have been purchased.

For a person or institution to be the owner of your shares, you must deliver a physical certificate or a digital one with which it is established how many shares belong to them.

10. Get an EIN

The Employer Identification Number, or EIN in English, is essential to comply with the statutes of the United States tax authorities and the IRS. This is necessary so that the aforementioned service can track your corporation and make sure that you are up to date with your taxes, basically. Its scrutiny will depend on the type of corporation you have, as we already established in previous paragraphs.

11. Apply for licenses and permits in Florida

You're almost done, now you just need to obtain the necessary permits. For this, however, you will have to do some research work. You must be clear about what permits you must obtain, and for this, a professional is almost essential. To obtain permits you need to go to different entities, mainly city councils, governorates and federal entities and authorities of the industry to which you belong. 

You can find information about this on the Small Business Administration website.

What to do after registering your corporation in Florida?

Of course, after registering your corporation the work continues. The process in the United States is usually quite fast, and much of it is through the internet. It's even faster if you hire a business agent, like businessenusa.com. 

After having registered, you must follow the steps that we are going to describe below so that everything goes well in your company and you have as few problems as possible.

Have a bank account for your corporation

Among the main steps you should take is create your business bank account in the name of your corporation. This step will separate the profits and banking operations of the corporation from those of its owners, allowing there to be a clear distinction between the entities that manage the company's money.
To open a business bank account you must present:

• The corporate resolution
• The articles of incorporation and
• Your employer identification number.

This way, the bank will be able to create your account, linking it with the tax services of the States United.

Register the company at the state and federal level for taxes

Next, you will need to register your business at the state and federal level. In Florida, you have many advantages for this, since the organizations are very open to receiving new companies. In the State of Florida, you will need to have your Employer Identification Number on hand, and contact regulatory bodies, representatives of your industry, and city councils under the jurisdiction of the Florida government. 

There are many places on the Internet where you can find this information, but you can also do it with your registered commercial agent.
To carry out this process, it is very likely that you will have to go to different entities, such as city halls, or local offices of the IRS, which, in the state, is represented by the Florida Department of Revenue. 

This step goes hand in hand with obtaining the necessary permits to operate in a specific territory. If your corporation has branches in different states, you must also register it in each of them, so that it can operate legally in any of the States where you want to offer your services.

Keep your Florida corporation in compliance

In principle, to keep your corporation up to date in Florida you have to follow the same steps as in the rest of the country, since these types of details are described in the IRC, which applies throughout the federation.

You must make sure that you fully comply with each of the requirements demanded by the IRS, for this, it is necessary that you take into account the requirements of the type of corporation that you created. You can consult the IRC to find out exactly what they are, and how often you must submit, depending on each case, the profit and loss report of your corporation. This must be done before the IRS and you need to have a person in charge of this task.

You must hold at least one annual shareholder meeting, although the first one should be held shortly after formation. At this annual meeting, a new board of directors is elected and new bylaws are noted, among which the date of the next meeting must be described, which must be held promptly, either in person or through electronic channels.

In addition, meetings may need to be held during the course of the fiscal year, which must be preceded by a meeting notice. Which must contain information about the place and date of the meeting and whether it is an ordinary or special meeting, also called extraordinary.

A special or extraordinary meeting is held when a decision is about to be made that significantly affects the corporation. Los estatutos deben contener requisitos de notificación únicos para este tipo de casos.
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Frequently Asked Questions

How much does it cost to register a corporation in Florida?

The process of creating a corporation in Florida is quite inexpensive. If the United States is famous for something, it is for having excellent conditions to create companies and corporations. However, in Florida, the conditions are especially good, which is why many prefer to create their corporations here, due to its stability and diversity of opportunities. 

This will depend on the industry, the state in which you create it, and whether you do it through a registered agent or if you do it on your own. Costs, however, typically do not exceed $125 for an LLC, although this will depend on the industry. On the other hand, it can take a lot of time and effort, since different and very important steps must be taken to complete the incorporation.

Is it easy to register a corporation in Florida?

Registering a corporation in the United States is not a difficult task, however, we cannot say that it is an easy task either. You need to coordinate many things, fill out the correct forms and choose the correct Statuses. Advice, knowledge and legal guidance are needed to know what steps must be taken and carry them out.

Fortunately, there are companies that are in charge of carrying out these procedures for you, and depending on the type of corporation, the states and the verification and validation processes, the time may vary, although, in general, the formation of a company is much faster in the United States than in other countries, due to the conditions and guarantees of the law. This can usually take between 20 and 25 days.

What is the difference between a C-Corp or S-Corp?

There are several differences:

• C-Corps have double taxation, they must pay taxes on the company's profits such as shareholder dividends. S-Corps delegate all tax responsibility to the shareholders.
• C-Corps can have as many investors as they want, and from any origin, while S-Corps can only have a maximum of 100 shareholders, and all must be individuals, permanent residents or US citizens.
• C-Corps can have several types of shares, while S-Corps can only have one type of shares.
• C-Corps are less scrutinized by the IRS, but must submit quarterly earnings reports. S-Corps are more scrutinized, but must submit annual earnings reports.

Do I need a C-Corp or S-Corp in Florida?

To know the answer to this question you must think about what the short, medium and long-term objectives of your company are. C Corporations, for example, are suitable for companies with a much broader projection, that is, those seeking much greater financing in less time. 

You must also consider tax burdens, there are companies that cannot afford to cover these expenses depending on the industry. Smaller companies often choose S Status, which allows the tax burden to be delegated to shareholders, thus reducing tax costs.

What taxes do corporations pay in Florida?

Companies and corporations have to pay similar taxes, although, in general, this will depend on the industry in which they operate, the state in which they are located, and another variable. However, the most common are the following

• Federal income tax.
• State income tax.
• Sales and use tax.
• Sales surtax.
• Reemployment tax.
• Withholding taxes.

However, corporations have many tools to deduct taxes, so many end up paying much less than others. entities, at least on a percentage basis.

Specifically for Florida, however, corporate taxes reach 5.5%, and you can obtain tax incentives by achieving objectives, thanks to the programs that we have mentioned in this same article and that especially benefit new companies and corporations registered in Florida.

How to dissolve a corporation in Florida?

To dissolve a corporation, both in Florida and anywhere in the country, you must complete a series of steps that you cannot skip, since, otherwise, the closure could extend for many years and there could be legal consequences against the directors. If you want to dissolve your company, you must take the following actions:

• Voting to dissolve the corporation: Like all major decisions in a corporation, the decision must be made under the presence and vote of all the directors of the company, for which you must schedule a meeting.
• Submit the articles of dissolution: the articles must be presented to the Division of Corporations of the Department of the State of Florida.
• A fee must be paid. $35 processing fee, if you present the papers yourself, the dissolution will be done while you are in the office. If you do it online, it may take 2 to 3 business days.
• Notify creditors and claimants. This will decrease liability risks and potential legal consequences. Any debts and taxes that the company has accumulated must be remedied.
• The final steps will be taken, which include liquidating corporate liabilities, gathering the company's assets, and disposing of business assets that shareholders will not claim.