How to Start a Business in Florida
Want to start a business in Florida? Smart move! With a low corporate income tax and no personal income tax, Florida is a great state for starting a business. At a basic level, starting a business is easy—just start selling something. But if you’re concerned about protecting your assets, boosting your credibility, and (most importantly) following the law, you’ll have to do a few more things. Our rigorous how-to guide will tell you everything you need to know.
Ready to Start a Business in Florida?Let's Get You Started
Pick a Business Structure
Name Your Business
File Formation Paperwork
Draft Internal Records
Get FL Business Licenses
Organize Your Money
Get Business Insurance
Understand Your Tax Burden
File Florida Annual Report
Build Your Business Website
Apply for Trademarks
1. Pick a Business Structure
You don’t technically need to register with the Florida Division of Corporations to start a business. You can simply start selling your product. For example, if you’re out on the Miami boardwalk selling sun hats and snorkel gear, you’re a sole proprietor by default. If you have a partner or two, you have a general partnership. The problem is, for sole proprietors and general partners, there’s no legal separation between you and your business. If someone sues you’re business, they’re suing you personally. If your business goes into debt, that’s your personal debt, meaning that creditors can go after your personal assets.
That’s why serious business owners typically form a business entity with limited liability protection. To get liability protection, you need to form an entity that is legally separate from you, the business owner. Business entities with liability protection have their own assets and liability, so if someone sues the business, only the business assets are at risk. The two most common entity types with liability protection are LLCs and corporations.
Florida Limited Liability Company (LLC)
LLCs are a popular business structure for small businesses because they’re flexible. They can be managed by the members (owners) or by managers hired by the owners, and the owners have a lot of freedom to decide how the business will be run. Most importantly, LLCs have strong liability protection. To start a Florida LLC, you’ll need to submit Articles of Organization to the Florida Division of Corporations.
Corporations have an established structure and strict record-keeping procedures. In a corporation, shareholders appoint a board of directors, and the board hires officers to run the business. Like LLCs, corporations have great liability protection. Also, since corporations have been around longer than LLCs and have stricter rules, they have an easier time gaining investors. To form a Florida corporation, you must file Articles of Incorporation with the Division of Corporations.
Can an LLC be just one person?
Yes! A one-person LLC is called a single-member LLC. Single-member LLCs are one of the most common kinds of businesses in the country. For the most part, single-member LLCs are just like multi-member LLCs, but there are some slight differences in how they file taxes and protect personal assets.
Read all about Single-Member LLCs.
What about a Florida nonprofit?
2. Name Your Business
Next, it’s time to choose your business name. Your business name should be unique, descriptive, and easy for your customers to remember. If you have a sole proprietorship, your legal business name is your name. For general partnerships, the legal business name needs to contain the names of all partners. If you want to give your business a more descriptive name, you’ll need a DBA.
LLCs and corporations need to follow Florida’s naming requirements. According to Florida law, an LLC or corporation name…
- Can’t be overly similar to any other Florida business name.
- Must use the proper identifier for the entity type (i.e. “LLC” for a limited liability company or “corp.” for a corporation).
- Can’t state or imply that the business is organized for an illegal purpose.
- Can’t suggest that the business is connected to a government agency.
Find out if your desired name is available in Florida by searching the Florida Corporation Records.
Can I reserve a business name in Florida?
Yes. However, Florida doesn’t have a form for reserving a business name. Instead, you’ll need to submit a letter to the Florida Secretary of State, stating your name and address and the business name you want to reserve. If the name is available, the SOS will reserve it for you for 120 days. The fee for name reservation is $25 for LLCs and $35 for corporations.
What is a DBA?
A DBA (doing business as) name is any name a business operates under that isn’t the legal name of the business. Sole proprietors need to file a DBA if they want to use a business name other than their own first and last name. LLCs and corporations often file DBAs as well, for the purpose of rebranding or branching into a new industry.
In Florida, a DBA is called a fictitious name, and you can file a DBA by submitting an Application for Registration of Fictitious Name and paying the $50 fee. However, that’s not all. Per FL Stat. § 865.09, you must publish a notice of your fictitious name in a local newspaper at least once before you actually register the name. This newspaper must be located in the same county as your business.
What about trademarked names?
It’s a good idea to check with the US Patent and Trademark Office (USPTO) to make sure your business name hasn’t been trademarked by someone else. If it has, and you use it anyway, there’s a chance that the business could come after you for infringement.
Skip ahead to learn more about trademarks.
3. File Formation Paperwork
Like everything involving government bureaucracy, forming a business entity requires paperwork. If you’re starting an LLC or corporation, you’ll need to file formation documents with the Florida Division of Corporations. (Sole proprietors do not need to file formation documents, but they will need a Florida business license.)
- To form a Florida LLC, file Florida Articles of Organization.
- To start a Florida corporation, file Florida Articles of Incorporation.
Both of these forms require you to list your Florida registered agent—the person or business you’ve appointed to handle your legal mail. Once you’ve completed the form, you can submit it to the Florida Division of Corporations online, by mail, or in person.
Note: The information on your formation documents becomes part of the public record. So if you include your own name and address on this form, anyone will be able to find this information by searching Florida’s Corporation Records.
What is a registered agent?
The job of a registered agent is to accept legal notices in person on behalf of a business and forward them promptly to the business owner. According to Florida law, all corporations and LLCs doing business in the state need a Florida registered agent. Your registered agent needs to have a physical address (not a P.O. box) in Florida and be available during standard business hours. If you have a job where it’s not feasible for you to be in the office all day—or you don’t live in Florida year-round—your best bet is to hire a professional registered agent service.
How can I keep my information off the public record?
Information that goes on the public record inevitably ends up in the hands of marketing firms who will use it to send you junk mail. The best way to avoid this is to hire a registered agent who will allow you to use their business address instead of yours on public documents wherever possible—like us!
4. Draft Internal Records
So far in this guide, we’ve dealt with public forms that you’ve had to file with the Florida Division of Corporations. Now, it’s time to organize your internal records. These are the documents your business will keep on record within your company.
Though these documents are internal, you’ll likely need to show them to third parties like the bank or—if you start a nonprofit—the IRS.
Here are the major internal documents you need to organize for LLCs and corporations:
Florida LLC Operating Agreement
This is your LLC’s rule book. It defines how your LLC will do things like make decisions, distribute money, manage operations, and appoint officers. Your operating agreement plans for every big picture scenario your LLC is likely (or unlikely) to face, including dissolution.
Drafting an operating agreement is hard, and the internet is full of shabby templates that have been copy and pasted from who knows where. So we had our attorneys draft a Florida LLC Operating Agreement template that you can use as a solid foundation.
Florida Corporate Bylaws
Bylaws are the rules your corporation will adopt and follow internally. Bylaws detail how your corporation will appoint directors and officers, hold shareholder and board meetings, and handle emergencies, among other things. Unlike operating agreements, corporate bylaws are required by law in Florida (per FL Stat. § 607.0206).
As with operating agreements, you can find plenty of bylaws templates online. But bylaws are pretty serious, so you don’t want to just use the first template you come across. Our attorneys drafted a Florida Corporate Bylaws template you can use to get started.
Starting a nonprofit? Read about Florida nonprofit bylaws.
5. Get Florida Business Licenses
Florida doesn’t have a general business license. However, the state does require professional business licenses for a range of industries. There are two main licensing agencies in Florida:
- Department of Business and Professional Regulation (DBPR). Issues licenses to architects, certified public accountants, and restaurants, along with many others.
- Department of Agriculture and Consumer Services (DACS). Issues licenses to agricultural businesses, pest control businesses, and private investigators, among others.
While those two departments issue the majority of Florida business licenses, some industries are regulated by other state agencies. You can find the full list of Florida state agencies on the FL Department of State website. If your industry is regulated by a state agency, you’ll need to apply for a business license through that agency before you can start doing business.
Local Business Licenses
Many cities and counties in Florida issue a local business license, often called a business tax receipt. Basically, you’ll need to pay a local tax each year, and you’ll receive the business tax receipt as proof of payment.
For example, in Osceola County, all LLCs and corporations, as well as sole proprietors who have registered a DBA, must obtain a business tax receipt from the Osceola County Tax Collector, which costs $30 and needs to be renewed annually. In Seminole County, businesses need to obtain a business tax receipt from the Seminole County Tax Collector. Non-regulated businesses that do not require any county, state, or federal licenses pay $25, and regulated businesses pay $45. There are some exemptions for charitable organizations, business owners with disabilities, business owners over 65, and veterans.
Learn more about How to Get a Business License.
How do I get a Florida business license?
If your profession requires a business license, you’ll need to apply through the state agency that regulates your industry. Most licenses are issued through DBPR and DACS.
How do I get a local license in Florida?
You’ll apply for a local license from your county government—usually the county tax collector’s office. The application process and fees will vary by county.
6. Organize Your Money
The liability protection you get from forming an LLC or corporation is only as strong as the separation between you and your business. At a minimum, you’ll need to open a bank account for your business. And if you’re going to hire employees, you’ll need to tackle payroll, too.
Open a Business Bank Account
To keep your business spending separate from your personal spending, you’ll need to open a business bank account. If you don’t, a court could find that your business is not actually separate from you, the owner, under the Alter Ego Doctrine. Also known as piercing the corporate veil, this is the outcome when a judge finds that a company is not a separate entity but rather an alter ego of the owner. If this ever happens, you could lose your limited liability status.
Opening a business bank account as a sole proprietor is important, too. Though sole proprietors and general partnerships have no limited liability status to protect, both will benefit from organizing their business finances come tax season.
How do you set up a business bank account?
Do I need a business bank account to accept credit card payments?
Probably. Payment processors require you to provide them with a bank account. This is where they’ll deposit funds from transactions. Most of the time, this needs to be a business bank account.
Some payment processors may let you get away with listing a personal bank account, but it’s not a great idea. Mixing your business finances with your personal finances erodes the separation between you and your business, weakening your liability protection. It also turns tax season into a nightmare.
Learn more about Payment Processing.
Set up Payroll
Planning to hire employees or independent contractors? You’ll need to set up payroll. Here are the steps you’ll need to take:
- get an EIN
- register for a Florida Reemployment Tax Account Number
- find your Reemployment Tax Rate
- determine whether you’re hiring employees or independent contractors
- prepare the forms your employees will fill out
- choose a payroll service or software
- decide on a payroll schedule
Since handling payroll on your own can be overwhelming, most business owners use a payroll software or professional service that will automatically withhold taxes, file state and federal returns, and send paychecks to employees by mail or direct deposit (employer’s choice).
What forms do my employees need to fill out?
Your new employees will need to fill out a W-4 to determine how much you’ll withhold and an I-9 to verify that the employee is eligible to work in the US.
What’s the difference between an independent contractor and an employee?
It’s important to understand the difference between an independent contractor and an employee. That’s because for employees, you’ll need to withhold and pay income, social security, and Medicare taxes. Independent contractors pay these taxes on their own.
An independent contractor is self-employed—how they complete their work is not directly controlled by an employer. An independent contractor may perform the same kind of work for other businesses, and can do the work when and how they choose.
An employee, on the other hand, performs their work how and when their employer chooses.
If you’re unsure, you can file Form SS-8 with the IRS and let them decide.
Learn everything you need to know about hiring independent contractors.
How do I get a Florida Reemployment Tax Account Number?
The fastest method is to create an online account on the Florida Department of Revenue (DOR) website. Once you’ve registered, the DOR will give you a tax account number. If you don’t want to register online, you can call the Department of Revenue or visit your local DOR Taxpayer Service Center.
7. Get Business Insurance
Forming an LLC or corporation protects your personal assets. But if anything disastrous befalls your business—like a lawsuit, burglary, flood, or fire—your business is on the hook to pay. Business insurance can help cover the costs.
How do you know what kinds of insurance you need? Depending on your business type, some insurance might be mandatory. Other than that, it depends on your business needs and how cautious you want to be. Own expensive merchandise or equipment? You might want business property insurance. Work with clients who might sue you? Probably a good idea to get liability insurance.
Here are the most common types of business insurance:
Workers’ Compensation Insurance
Workers’ compensation insurance provides coverage for workers who are injured or become ill on the job. This insurance pays for things like medical bills, lost wages, and disability benefits. Here’s who is required to purchase workers’ compensation insurance in Florida:
- Construction employers with one or more employees.
- Non-construction employers with four or more employees
- Agricultural employers with six or more employees
Unlike some states, Florida doesn’t have a state workers’ compensation fund, so you will need to purchase this insurance through a private company licensed by the FL Office of Insurance Regulation. A business can also be self-insured—meaning it puts aside its own money to cover future accidents—but to do so, you’ll need to apply with the Division of Workers’ Compensation and be able to prove that your business is financially stable enough to provide these benefits.
This covers the costs of claims against your business for injuries or damages to the property of others, like clients or customers. This includes medical expenses, legal fees, settlements, and judgments. Whether or not you need it depends on whether your business is likely to be sued and how many assets your business needs to protect. If it’s just you and your computer in your basement, you might feel comfortable skipping liability insurance. Or maybe you won’t. Beyond general liability insurance, you can purchase or add on more specific types, like professional, cyber, commercial, home-based business, or product liability insurance.
Do business owners need workers' compensation insurance in Florida?
Yes, business owners are required to cover themselves when they purchase workers’ comp insurance in Florida, unless they file for an exemption. Here is who can apply for an exemption from workers’ compensation insurance:
- Sole proprietors and general partners
- Officers of a corporation or LLC members with at least 10% ownership of the company (no more than three officers or members may apply)
Do I need business insurance for my home-based business?
Probably. That’s because you can’t count on your homeowners’ or renters’ insurance policy to cover damages related to your business. Most insurance companies offer a home-based business insurance plan.
8. Understand Your Tax Burden
A benefit of doing business in Florida is that the state has no personal income tax. Plus, the corporate income tax is lower than in most other states. But your tax burden isn’t only determined by Florida. You’ll need to pay federal and local taxes as well.
- LLCs. Single-member LLC? By default, you’re taxed similar to a sole proprietor. More than one LLC owner? You’re taxed as a general partnership. Either way, your default tax status is “pass-through,” which means you don’t pay corporate taxes. Instead, your LLC’s owners report profits and losses on their personal tax returns. Good news: because there’s no state income tax in Florida, you’ll only have to pay the 15.3% federal self-employment tax rate. An LLC can file paperwork with the IRS to be taxed as an S-Corp or C-Corp instead.
- Corporations. Corporations are taxed as C-Corps by default. This means that corporations pay the 21% federal corporate tax rate and the applicable Florida corporate tax rate.
To pay your federal taxes (and take a good deal of other steps required to start a business), you’ll need to get an Employer Identification Number (EIN). You can apply for one with the IRS or hire us to get one for you.
Do I need an EIN if I’m self-employed?
If you’re operating a sole proprietorship or single-member LLC that doesn’t employ anyone else and you don’t need to file excise or pension plan returns, you don’t legally need an EIN.
However, you can still get one—and you probably should. Otherwise, you’ll have to use your own social security number to do business. Plus, you’ll likely need an EIN to open a business bank account.
How do I get an EIN?
To get an EIN, you can either apply online or file form SS-4 by mail with the IRS. Getting an EIN is free.
Check out our guide to applying for an EIN.
What is an S-Corp?
An S-Corporation is a federal tax election. Registered business entities like LLCs and corporations start out with a default tax status, but can file paperwork with the IRS to be taxed as an S-Corp. Like LLCs, S-Corps are taxed as pass-through entities. Like corporations, S-Corps can make distributions that aren’t subject to the 15.3% self-employment tax.
Learn more about the S-Corp tax election.
What is a C-Corp?
A C-corporation is the default federal tax election assigned to corporations. Most corporations are taxed as C-Corps, but LLCs can also apply for C-Corp tax designation by filing paperwork with the IRS. C-corps file federal corporate income taxes and state corporate income taxes (in Florida, the corporate tax rate is 5.5%). C-corps can pay their shareholders in distributions, and the shareholders report those profits on their personal tax returns.
Learn more about the C-Corp tax election.
Florida State Business Taxes
Florida has no personal income tax. That means that unless your business is a C-Corp, the only state business tax you’ll need to pay is the state sales tax (which is currently 6%). C-Corps will need to pay the corporate net income tax, which is a flat 5.5%.The first $50,000 of income is exempt.
Local Florida Business Taxes
Don’t forget about local taxes! As we covered in the Business License section above, many Florida cities and counties require you to pay for an annual business tax receipt. Also, your county may charge an additional sales tax in addition to the 6% state sales tax. For example, in Miami-Dade County, the sales tax is 7%.
9. File a Florida Annual Report
LLCs and corporations need to file an annual report with the Florida Secretary of State every year, starting the year after they register their business in Florida. This report is simply an information update, so that the state knows who’s running your business and how to contact you. You’ll need to file your annual report online, and the deadline is May 1st. The fee is $138.75 for LLCs and $150 for corporations.
Read more about How to File a Florida Annual Report.
What if I don’t file the Florida annual report?
You’ll be charged a $400 late fee. Even worse, if you don’t file your report by the first Friday in September, the state will dissolve your business.
10. Build Your Business Website
If you want Floridians to find your business, they have to be able to find you online. This means you’ll need a website, a business email account, and social media accounts. Don’t worry if you’re not especially tech-savvy—you don’t have to be a web developer or an influencer to establish a robust online presence. You’ll just need the following:
- Domain name. Your domain is the address where your website will live. You’ll want a domain name that is short, unique, local, and—most importantly—available. If your domain is trademarked, you could face legal trouble.
- Domain registrar. Once you’ve decided on a domain name, you’ll want to register it with a domain registrar. Some domains are more expensive than others. Some domain registrars also offer hosting and most will provide you with a business email that includes your domain name (“firstname.lastname@example.org”).
- SSL certificate. An SSL certificate signals to your users that your website is secure. If your website will use forms—like a sign-up form or a “contact us” form—an SSL certificate is critical. But even if you don’t you use forms, you’ll still probably want one—it allows an encrypted connection, which means your users’ data is transported securely. There are several types of SSL certificates, and you can often get one through your domain registrar.
- Site design. The easiest option is to use a free website creation tool—there are a number of free options available. Most are easy even for a newcomer to use, with styles and built in templates. For a more custom design, you can hire a web designer to work on your website, but this will be much more expensive.
11. Apply for Trademarks
A trademark is a design, symbol, word, phrase—or any combination thereof—that represents a brand’s goods or services exclusively. Only some businesses register trademarks. You can apply to register your trademark federally with the U.S. Patent and Trademark Office (USPTO).
You can only register a trademark once you’ve started using it (so slap it on that website you just made), and not all applications are approved. Trademark law is complex, and the strength of a trademark application (and the trademark itself) depends on many factors.
Our attorneys can review your application, offer advice, and prepare and submit the application for you—Check out our Trademark Service.
How do I register a trademark in Florida?
To register your trademark in Florida, you’ll need to file an Application for the Registration of a Trademark or Service Mark with the Florida Division of Corporations. The fee is $87.50 per class of trademark. You’ll need to include three examples of your business using the trademark (for example, on a website, advertisement, or business card).
Keep in mind that registering a trademark in Florida only keeps other people from using it in Florida. To have exclusive use of your trademark, you’ll need to register it at the federal level.
Can I register a trademark before I use it?
No. But you can file an application with the USPTO under Intent-to-Use status. This gets your application in line before you’ve actually used the mark, which could be helpful if you’re worried someone else might register your mark before you’ve had a chance to use it.
For your trademark to become official, you’ll eventually need to show proof that you’re using it. An Intent-to-Use application buys you some time to do that.
Learn more about filing an Intent-to-Use Trademark.