A corporation, or “corp”, is a type of business entity that provides legal protections for owners, directors and officers of a company. Unlike an LLC, a corporation is owned by shareholders who hold stock in the company.
Corporations are independent legal entities, completely separate from their owners and managers. This legal separation protects owners’ personal assets from the debts and liabilities of the company. A corporation has the ability to own assets, enter contracts and sue or be sued in its own name.
A Florida corporation is created by filing incorporation documents with the Florida Division of Corporations. This company can do business in any U.S. state, but its legal home is in Florida. The company’s internal governance by the state laws of Florida.
Individuals and businesses from all over the U.S. choose to incorporate in Florida in order to take advantage of specific benefits. Here are some of the top benefits of setting up a corporation in Florida:
Florida has fewer compliance requirements for corporations than many other states. This lack of boundaries helps to lower both startup costs and long term compliance costs.
For example, Florida does not impose a minimum capital requirement for a corporation. This means that in Florida you can form a corporation without depositing a significant amount of money or committing assets upfront. This lowers the barrier to entry for entrepreneurs starting corporations. Additionally, Florida does not mandate corporations to declare a par value for their stock, which is the minimum floor price which shares can be sold for. This allows the corporation’s board of directors to set the value as they see fit.
Florida also prioritizes the privacy of corporate shareholders. The state does not disclose or keep records of corporation stockholders, although it does disclose the identities of directors, officers, and Registered Agents.
When choosing a state to incorporate in, business owners have the opportunity to forum shop for the laws and legal system they believe will provide them fair decisions. Florida’s court system has broad experience in corporate law and also specializes in specific types of commercial law. For example, many parties chose Florida as the forum for maritime and admiralty law disputes.
Here are the steps you need to follow to incorporate in Florida.
Your Florida corporation can have any name you choose. However, your business name has to be unique. The name cannot be similar to any company already registered in Florida.
The name of your Florida corporation also needs to include one of the following corporate endings:
Inc. – or “Incorporated”
Co. – or “Company”
Corp. – or “Corporation”
IncNow‘s Incorporation Specialists can check if your preferred business name is available in Florida before you incorporate.
Florida law requires you to appoint a Florida Registered Agent for your corporation. If you are not located in Florida, you need to appoint a company, like IncNow, to be your Registered Agent.
A Florida Registered Agent needs to meet the following requirements:
- Maintain a physical street address (not a P.O. Box) within the State of Florida.
- Be available during standard business hours (9:00 A.M. to 5:00 P.M., Monday through Friday).
The main purpose of a Florida Registered Agent is to receive “Service of Process” on behalf of the corporation. This includes official court filings, such as lawsuits and subpoenas, as well as state tax notifications.
You need to file Articles of Incorporation in Florida in order to officially form your Florida corporation. This is the document that brings the corporation into existence by making it part of the public record.
The Articles of Incorporation must include:
- The name of the corporation, including a corporate ending;
- A street address for the corporation, as well as a mailing address if the two differ;
- The purpose of the corporation;
- The number of shares of stock that the corporation is authorized to issue (IncNow recommends 1,500);
- The name, street address, and signature of the company’s Registered Agent; and
- The signature of the incorporator.
The State of Florida does not require the name and address of the company’s directors to appear in the Articles of Incorporation. However, a company can choose to include this information voluntarily.
The Articles of Incorporation need to be filed with the Florida Secretary of State’s office. The filing can be completed online or by mail. This filing requires paying two separate fees totaling $70. The first is a $35 filing fee. The other is a $35 fee for designating a Registered Agent.
Beyond the public filing, Florida corporations need to prepare specific internal company documents to ensure proper governance and legal standing:
- Corporate Bylaws: The internal rulebook for governance and operations.
- Stock Certificates: Physical evidence of share ownership.
- Stockholder Agreement: A contract outlining the rights and obligations of shareholders.
- Corporate Minute Book: A centralized record of meeting minutes and major decisions.
- Organizational Resolutions: The initial “Action of Directors” required to officially appoint officers and issue stock.
IncNow’s Complete Corporation package includes all of these necessary documents, professionally prepared for your Florida corporation.
You will need to obtain a federal tax ID number, called an Employer Identification Number or EIN, for your Florida corporation from the IRS after it is formed. AN EIN number is required to pay taxes, hire employees, and open corporate bank accounts.
Business owners can apply for an EIN directly through the IRS website or by mail. The application process requires completing and submitting IRS Form SS-4.
The cost to form a Florida corporation depends on the level of service you need. The mandatory base filing fee paid to the Florida Division of Corporations is $70.
IncNow offers two distinct formation packages for Florida corporations:
- Basic Corporation Package ($189): The Basic Corporation Package covers the filing of your Florida corporation and includes one full calendar year of Delaware Registered Agent Service.
- Complete Corporation Package ($298): The Complete Corporation Package includes the filing of your Florida corporation, one full calendar year of Delaware Registered Agent Service, and all necessary internal company documents to ensure compliance.
Exclusive Offer: Use the discount code Save50 at checkout to receive $50 off the Complete Corporation package.
Corporations can choose to be treated as either a C-Corporation or S-Corporation for federal tax purposes. Here are the key details about these two tax elections:
- S-Corporation (S-Corp) – This tax election functions as a “pass-through” entity where the corporation itself does not pay taxes on its income. Rather, the company’s income, deductions and credits pass directly through to the shareholders and are reported on their personal tax returns. The S-Corporation is typically used by small businesses, as there are certain restrictions that need to be met. An S-Corp can only have 100 individual shareholders, all of which need to be U.S. citizens or residents. This means that an S-Corp can not have any foreign shareholders, and cannot be owned by other business entities.
- C-Corporation (C-Corp) – This is the default tax election for a corporation. C-Corps are subject to what is often called “double taxation”. This is due to the fact that the corporation pays the corporate tax rate on income generated by the business. Then when profits are distributed to shareholders in the form of dividends, that money gets taxed again as part of their personal income. C-Corps do offer several advantages however to make up for the additional taxation, like increased deductions and less restrictions on issuing stock.
Read more about corporation tax tips.
Florida state law requires corporations registered in the state to file an Annual Report each year. The Florida Annual Report is a simple but crucial requirement for maintaining a corporation’s good standing status.
To file the Florida Annual Report, you will need to provide your company’s Florida file number. You can find the Florida file number in the company’s Articles of Incorporation. The Florida Annual Report requires the following information:
-
- Company Name – The company’s full corporate name;
- Tax ID Number – Federal Employer Identification Number (FEIN/EIN);
- Principal Office Address – The principal office address of the company;
- Mailing Address – The company’s mailing address (if different from the principal office);
- Officers and Directors – The names and addresses of all officers and directors; and,
- Email Address – A valid email address of official communications from the Florida Division of corporations.
There is a $150 fee that needs to be paid in order to submit the Florida Annual Report. The report is submitted online at the Florida Division of Corporations website sunbiz.org.
The Florida Annual Report needs to be filed before May 1st of each year. The state of Florida charges a $400 late fee for late Annual Reports.