If you’ve decided that you want to start a company in Florida and you’re not sure if you want to incorporate or form an LLC, here’s the guide you’ve been searching for. Below, find a comprehensive comparison of the pros and cons of each entity as well as a brief “how to” section explaining the way that each entity is formed with the Division of Corporations at the Florida Department of State.
If it’s the case that you already know what kind of business entity you want, and you already know that Active Filings is the best and most reliable formation company in the country, select the package that’s best for you and get started forming your company right now.
Florida has become one of the most desirable states in the country for conducting business. In the past years, Florida has consistently outdone all other states in the new business incorporation department. With the greatest amount of business parks available, an advantageous tax system, transportation availability, fourteen foreign trade zones, and a large population of skilled human resources, it’s no wonder that Florida has reeled in so many new companies.
Best Way to Incorporate a Company in Florida
Two of the most common business entities in Florida are the LLC and the corporation. Both of these entities have distinct characteristics as well as different pros and cons depending on your business goals. One similarity between the Florida business types is that there are three primary ways of creating them:
- By hiring a lawyer to do it for you (the most expensive option)
- Doing it yourself by submitting payment and paperwork to the Division of Corporations
- Using a professional company (like Active Filings) for a fraction of the cost of attorney fees
What is a Florida corporation?
A Florida corporation is a legal business entity that is created by filing a document called the Articles of Incorporation with the Division of Corporations at the Florida Department of State. Corporations are a good choice for business owners who are looking to take their company public someday or want to attract investors. Corporations have a little more prestige and processes than an LLC, and with that, a little more complexity.
What is a Florida LLC?
After thinking about it, you may find that a corporation isn’t the right entity for your business goals. If that’s the case, an LLC might be the choice for you. An LLC has fewer complexities and is easier to maintain than a corporation, but still has the limited liability quality of an incorporated company. It also acts as a pass-through entity, which means that the profits of the company avoid the Florida tax rate and are taxed as personal income instead. LLCs are also a good option for people seeking an entity for real estate holding or appreciating assets.
Florida Corporation Advantages
The decision to incorporate your company, rather than forming an LLC, has both advantages and disadvantages.
- Wide array of tax deductions including employee fringe benefits such as medical reimbursements.
- Unlimited number of shareholders. There’s no cap on the amount of people that can buy into the company.
- Asset protection. The assets of the shareholders or the corporation are separated from the debts and liabilities of the company.
- A good choice for international investors. Florida corporations are an ideal business structure for non-U.S. citizens because of the international banking center located in the state.
- Double taxation. Corporate profits are initially taxed at the Florida corporate tax rate, and then again as personal income.
- Things to do. Corporations are required to keep track of more business documents and hold more meetings.
Florida LLC Advantages
LLCs are one of the most popular business entity choices in the country because of their flexibility and ease of formation. That being said, there are both pros and cons when it comes to operating and maintaining a limited liability company.
- Taxation options. LLCs can either be taxed as a pass-through entity or as a corporation. The LLC is the only legal business entity with this kind of taxation flexibility.
- Unlimited amount of owners. There is no restriction on how many owners an LLC can have. That being said, having multiple owners of an LLC does not carry the same status of the amount of shareholders a corporation has.
- Asset protection. An LLC is a legally separate entity from its owners. This means that the owners of the LLC are not legally liable for the debts and obligations of the company.
- Cannot be publicly traded. If you want to take your company public, a corporation is a better choice for you.
Florida LLC vs. Florida Corporation
|Florida LLC||Florida Corporation||Florida S-Corps|
|Entity has limited liability in Florida||YES||YES||YES|
|No requirement that owners are U.S. citizens||YES||YES||NO|
|Required by Florida business law to hold annual meetings||NO||YES||YES|
|Required by Florida business law to record meeting minutes||NO||YES||YES|
|Can be owned by a separate business entity||YES||YES||NO|
|Income is taxed separately from the income of company owners||YES||NO||NO|
|Can issue stock to shareholders||NO||YES||YES|
|Business profits and loses can be reported on personal tax returns||NO||YES||YES|
|Can exist in perpetuity||NO||YES||YES|
How to Incorporate in Florida
If you know for certain that a corporation is the entity that’s right for your business goals, here’s how incorporation happens in Florida.
Florida Articles of Incorporation Requirements
Incorporating in Florida requires that you submit a document call the Articles of Incorporation to the Division of Corporations at the Florida Department of State. This document can be submitted in person or online. There are several required information items that must be provided in order to proceed with incorporation.
To complete the Florida Articles of Incorporation, you must include the following information:
|Cover Letter||The cover letter requires the proposed corporation name, filing fee information, and the name and address of the filer.|
|Company Name:||Your Florida corporation name must adhere to a few rules. First, it must be different from any other company on record with the Florida Division of Corporation. Additionally, it must include an identifying term such as “Corporation,” “Corp.”, “Incorporated,” “Inc.”, “Company,” or “Co.” You can check and see if the name you want for your company is available by searching for it using the online search page at Sunbiz.org.|
|Principal Place of Business:||The principal place of business is the location where the official business documents of the corporation reside. This address must be a physical street address. When you hire Active Filings to incorporate your company, we provide our office address for this article.|
|Specific Purpose For a Professional Corporation:||In this section, list the reason for forming the corporation or the business and/or activity the company will engage in.|
|The Number of Shares of Stock:||List the number of shares of corporate stock you are currently authorizing. Declaring the number of stock in this section is technically the process of creating stock for your corporation. You can always add more as needed at a later date.|
|Initial Officers and/or Directors:||In this section, list name, title, and address of the initial corporate officers and/or directors.|
|Registered Agent Information:||In Florida, like all states, a registered agent is required to incorporate your company. A registered agent (also known as a resident agent) is an individual or business that serves as your company’s official point of contact for lawsuits and legal notices. Ads part of Active Filings’ incorporation service, we include a year of registered agent service when you hire us to incorporate your business in Florida.|
|Name and Mailing Address of Incorporator:||According to the official Florida-issued Instructions for a Profit Corporation, “The ‘incorporator’ is the person who prepares and signs the Articles of Incorporation and then submits them for filing to the Division of Corporations. The function of the incorporator usually ends after the corporation is filed.” Essentially, this is the person who authorizes the formation of the corporation. When you hire Active Filings, we list ourselves as the incorporator. Being the incorporator does not imply and stake in or claim to the corporation.|
FL Incorporation Requirements
In Florida, there are some specifications about who can form a corporation, how the company becomes official, and what maintenance must be completed to keep the corporation in good standing.
Forming a corporation typically requires at least one director that meets certain requirements. Florida is no exception to this standard. Here are some of the regulations regarding who can and who cannot form a Florida corporation.
|Minimum Number:||One or more|
|Age Requirements||Natural person, 18 years old|
|Listed on Articles:||Directors are not required to be listed|
Corporate officers are high-level management individuals that have been elected by the board of directors. Typically there are three distinct officers that are elected: a president, a treasurer, and a secretary. However, corporate structures vary based on their size, purpose, and industry.
|Listed on Articles:||Officers are not required to be listed on the Articles of Incorporation.|
FL Incorporation Fees
Below, find a list of common FL corporation filing fees.
|Certified Copy Fee:||$8.75 (This is an optional fee.)|
|Certificate of Status:||$8.75 (This is an optional fee.)|
|Payment Method:||Major credit cards, check, or money order|
|Amend Articles of Incorporation:||$35.00|
Active Filings Stats and Specs
When it comes down to it, Active Filings is the best option for corporation formation. Whether your are incorporating in Florida as a US citizen or if you are expanding globally, Active Filings is America’s Most Reliable Business Incorporation Service.
|Best Way to Incorporate:||Oh yah.|
|Best Company For Incorporation:||Yes. Undoubtedly.|
|Registered Agent Service Included:||Yep. A whole year of prime registered agent service is included with every corporation and LLC formation package.|
In order for your corporation to maintain good standing with the Florida Division of Corporations, it must complete a few maintenance requirements.
|Florida Annual Report:||All legal business entities in Florida must file an annual report with the Florida Division of Corporations.|
|Annual Report Due Date:||In order to avoid late fees, you must submit your corporation’s annual report between January 1 and May 1 the year following incorporation.|
|Annual Report Filing Fee:||$138.75|
|Annual Report Late Filing Penalty:||$400.00, if paid after May 1st|
|Payment Method||Credit card (Visa, MasterCard, American Express, Discover), debit card, online prepaid account through Sunbiz.org|
|How to Pay:||Online|
|Annual Meeting:||Florida business law requires all corporations to hold a meeting of shareholders annually. The purpose of this meeting is to elect directs and for the transaction of any proper business. The bylaws of the corporation provide a means to outline the details of this meeting.|
Florida Tax Information
Florida has a specific business tax rate that all corporations must honor.
|Florida Corporate Tax Rate:||5.50%|
|When Are FL Corp. Taxes Due:||The due date is dependent on taxable year end date; see the official Florida corporate income tax due dates chart for more information.|
|Submission Methods:||Via a recognized vendor, or online at the Florida Department of Revenue website.|
|Payment Methods:||Credit card (Visa, MasterCard, American Express, Discover), debit card|
|Florida Tax ID Number:||Required, issued federally by the IRS, commonly called an "EIN."|
|Documents Required for Filings:||Florida Form F-1120 must be filed ever year, even if the corporation doesn’t owe any taxes.|
What About S-Corps?
S-corporations get their start as a corporation formed through the typical incorporation process in Florida. Then, they are reclassified as an S-corp through the IRS. Reclassifying your Florida corporation as an S-corp allows the company to avoid the Florida corporation tax and function as a pass-through entity. This is a good option for companies that are just getting off their feet.
How to Start a Florida LLC
Though there are distinct differences between Florida LLCs and Florida corporations, the formation process includes similar steps. Forming an LLC in Florida requires the submission of a document called Articles of Organization to the Division of Corporations at the Florida Department of State. You can submit this document in person or there is an option to file it online through sunbiz.org. Completion of this document requires that you provide the following information:
Articles of Organization Information
Completing the Florida Articles of Organization to form your LLC requires the following information:
|Cover Letter:||To complete the cover letter, provide the proposed name of your limited liability company, a point of contact for state correspondence, and an indication of the amount of payment included with the filing.|
|Company Name:||When selecting a name for your LLC, you must make sure that it is different from any other company listed on record with the State of Florida. The name of your company must also include a phrase that indicates that it is an LLC such as “Limited Liability Company,” “L.L.C.,” or “LLC.” Before finalizing your name and filing the Articles, make sure that the name that you want is available by searching for it using the online search page at Sunbiz.org.|
|Address:||This section is reserved for the mailing address and street address of the limited liability company. If you hire Active Filings to start your Florida LLC for you, we provide our information in this spot which protects your personal information from being publicly listed.|
|Registered Agent:||This space is reserved for the name, street address, and signature implying acceptance of your registered agent. All Florida LLCs are required by Florida law to have a registered agent physically located in the state. This means that they MUST have a street address—a P.O. box address is no good.|
|Member/Manager Names and Addresses:||In this space, provide the names and addresses of any individuals or entities who are authorized to mange the LLC.|
|Required Signature:||The Articles of Organization must be signed by a member of the LLC or an authorized representative of a member of the LLC. If you choose Active Filings as your LLC formation company, you effectively allow us to sign on your behalf. This does not mean that we have any share in the profits or decision-making powers of your company.|
FL LLC Formation Requirements
In order to form an LLC in Florida, there are some specific rules and regulations that must be followed, including who can form an LLC and what maintenance is required to keep your LLC operating legally.
Instead of a board of directors or corporation officers, LLCs have members and managers. Managers, as the title would imply, are in charge or making big picture decisions about the company. This does not mean that they are necessarily owners of the company, although they can be. Members, on the other hand are owners of the company. This means that, depending on their share, they receive a portion of the companies profit. You are not required to list the names and addresses of the managers and members on your filing paperwork, however there is a space to do so if you want to.
|Listed on Articles:||No. Florida does not required that you list the members and/or managers of the LLC.|
Costs of Forming an LLC in Florida
Below, find a list of common FL LLC formation fees.
|Certified Copy Fee:||$30.00 (This fee is optional.)|
|Certificate of Status:||$5.00 (This fee is optional.)|
|Payment Method:||Major credit cards, check, or money order|
|How to Pay:||If you form your LLC online you can pay with a card. If you forming your LLC in person, you can pay with check or money order.|
Active Filings for LLC Formation
Active filings specializes in corporation and LLC formation. Business goals are as diverse as the states they are formed in and we know that some entities are better suited for some. That’s why we’re not just an incorporation service—we’ll take care of forming your Florida LLC too.
|Included in the LLC Formation Package:||Registered agent service, reliable and trustworthy customer support team, formation packages tailored to your business needs.|
|International LLC Formation:||We offer it and we do it the best.|
|Registered Agent Service Included:||365 whole days of registered agent service included with each formation package.|
Florida LLC Formation Process
There are a couple of ways to start your LLC in Florida. You can have a lawyer do it for a lot of money, do it yourself, or hire a company that specialize in LLC formation… like Active Filings.
What’s the best choice?
Deciding if you should incorporate your company or form an LLC is an important choice that requires careful consideration and foresight. Take a look at your business goals and ask yourself where you want to be in 10 years. Your choice isn’t permanent, but changing entities can be confusing and more work that you might not want to add to your to do list. If you have specific tax implication questions, you may want to consult with a business professional to get all of the complex information. No matter what you decide, hiring a company to incorporate or form your LLC for you is the most cost effective decision.
What’s the most reliable choice for a formation company?
Active Filings—no questions about it. As America’s most reliable business incorporation service, we’ve got your business formation covered from start to finish.
Learn More About Incorporation Requirements In Your State
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia