How to Start a Business in Florida

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.

Florida Corporation

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.

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.

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.

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.

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.

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.

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).

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.

Liability Insurance

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.

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.

Federal Taxes

• 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.

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%.

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.

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 (“[email protected]”).
• 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.

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.