Florida is now the third largest state in the nation according to population – surpassing New York for the first time in 2014.
It has hundreds of miles of beautiful beaches that give any business owner easy access to a miniature work holiday or a great place to host clients.
Aside from the natural beauty of the area and the large work pool, it is also one of the few states that does not levy a state income tax on residents.
This has brought a great deal of entrepreneurial interest to the state from people interested in starting a business in Florida.
Starting a Business in Florida Begins with Choosing A Structure
Most businesses will need to choose from one of three business categories: limited liability company (LLC), for-profit corporation, nonprofit corporation, or a partnership.
A list of steps needed for Florida business registration can be found at the SunBiz website which is provided by the state of Florida.
The website not only has most of the forms, but they also allow you to submit them online.
Establishing a limited liability company (LLC) in Florida offers protection for personal assets and positions you for potential tax advantages.
Members of an LLC in Florida are able to report income on individual tax returns using a Schedule C and they do not have to pay a corporate income tax.
There are other advantages for those interested in starting an LLC too:
There is no restriction on the number of members which can be part of the business, and there is flexibility in the way management is structured and the way profits are divided.
There are also fewer formalities involved in running an LLC in Florida.
LLCs are allowed to have an unrestricted number of subsidiaries, and there is no formal requirement for corporate minutes or resolutions which can make management much easier.
As for the disadvantages, these include the initial and ongoing fees which are more expensive compared to general partnerships and sole proprietorships, limited flexibility in transferring ownership, and minimal protection under case law because of the relative newness of the business structure.
The fees for filing an LLC in 2018 include $100 in filing fees and $25 for a registered agent designation.
Optional fees include $30 for certified copy or $5 for a certificate of status.
Like an LLC, a for-profit corporation can be owned by a group of people, but the main difference here is that a corporate structure is required to pay corporate income tax.
Whether you incorporate as a C Corp or an S Corp, there are advantages to running a corporation in the Sunshine State.
Some of the most significant advantages to forming a corporation in Florida are the low tax rates, a relatively skilled and inexpensive work force, and the substantial access to foreign investment in some parts of the state.
Other advantages include limited personal liability for shareholders and company principles, perpetual existence regardless of ownership changes, increased ability to raise investment money, and no minimum capital requirements.
Enterprise Florida lists numerous incentives for those thinking about incorporating in Florida as well as some specific tax advantages.
Reserved for charities and religious institutions, a non-profit corporation is usually exempt from taxes entirely.
Besides the clear tax advantages of this business structure, the Florida Association of Nonprofits works to support leadership, management, financial policy, and public policy for it’s a network of 52,000 nonprofits within the state.
The fees for filing a for-profit OR non-profit corporation in 2018 include $35 in filing fees and $35 for a registered agent.
There is an optional fee of $8.75 to obtain a certified copy or certificate of status.
A general partnership, a limited liability partnership, a Florida limited partnership, or a foreign limited partnership all fall under this same umbrella.
They are not frequently used because of the additional steps necessary – creating a business partnership is more involved and expensive and should be reviewed at the SunBiz website.
Registering a DBA in Florida
If you want to conduct business under a name other than your own, also known as ‘doing business as’ (DBA), you will need to register the name with the state of Florida.
There are several steps for a fictitious name registration in Florida and it has an additional fee of $50 as of 2018.
When you run a business in any state, you will be responsible for various federal, state, and local taxes (unless you have started a non-profit.)
Florida small business taxes are known to be some of the most reasonable in the nation.
Here’s a look at how they break down:
Federal Business Taxes
These are collected across the board by the IRS and may include income tax, self-employment taxes, estimated taxes, excise tax, and employment tax.
Florida State Business Taxes
Depending on the type of business you run, there are a variety of business taxes in Florida.
These may include fuel taxes, pollutants tax, gross receipts tax, reemployment tax, and sales and use tax.
A full list can be found at the Florida Department of Revenue website.
Local Business Taxes
These are taxes collected by local cities or county tax collectors.
Each county has a different set of requirements for the taxes collected from businesses operating within their borders.
The county tax collectors websites are a great place to obtain this information.
If you are operating within the city limits of a municipality, you should also contact them to learn if there are additional city taxes.
Even if all of this sounds like a lot, just keep in mind Florida is ranked in the top 10 in the Tax Foundation’s State Business Tax Climate Index for 2018.
Obtaining a Business License
Many industries require a specific state of Florida business license– but not all.
While most businesses fall under the domain of one of these two departments, other licensing agencies oversee specific professions such as nurses, clinical social workers, pharmacists, and tattoo artists.
Starting a Business in Florida – The Final Word
If you’ve been thinking about starting a business in Florida, the state has many incentives to draw you in and keep you there.
Not only do they offer great tax rates and easy setup, they also offer a new business startup kit to make the process easier.
The Florida Small Business Development Center is another great resource to obtain training to launch, grow, renew, or transition your Florida business.