How to Start a Business in Florida

Learn all you need to know about starting a business in Florida, from licenses and permits to taxes and insurance

1. Choose a Business Idea
Take some time to brainstorm and study company ideas. Consider your personal interests, talents, resources, availability, and the reasons why you want to start a business at this point. You should also think about the possibility of success in terms of your community's interests and needs. More information on how to assess company ideas may be found in this post.

Consider writing a business plan once you've chosen an idea to assess your prospects of generating a profit. You'll have a better grasp of the beginning expenses, your competition, and money-making techniques if you make a strategy. Before offering financial help, most investors and lenders will need to see your company plan.

2. Decide on a Legal Structure
The most common legal structures for a small business are:

• sole proprietorship
• partnership
• limited liability company (LLC), and
• corporation.

Limited partnerships and S corporations are examples of special variants of several of these arrangements. Consider which business organization form provides the liability protection you need as well as the optimum tax, financing, and financial benefits for you and your company. 

3. Choose a Name
If you're forming an LLC or a corporation, you'll need to make sure your name is distinct from that of other businesses already registered with the Florida Department of State (DOS). Do a business entity search on the DOS website to see if any names are accessible. You can't reserve a name until you've registered your company with the state.

Is your company a sole proprietorship or a partnership with a business name that differs from the legal name of the owner (in the case of a sole proprietorship) or the surnames of the individual partners (in the case of a partnership)? If that's the case, you'll need to register a fake name with the DOS. You have the option of registering online or on paper.

If you intend to conduct business online, you should consider registering your company name as a domain name. For additional information, see Choosing and Registering a Domain Name. Furthermore, to avoid trademark infringement concerns, you should do a federal and state trademark search to ensure that the name you wish to use is not identical to or too close to one that is currently in use. For additional information, see How to Conduct a Trademark Search.

4. Create Your Business Entity in Florida

• Sole proprietorship: You don't need to submit any organizational paperwork with the state of Florida to start a sole proprietorship. See How to Form a Sole Proprietorship in Florida for additional information.
• Partnership: You don't need to file any organizational paperwork with the state of Florida to form a general partnership. All partnerships should have a formal partnership agreement, even if it is not legally necessary. If there is ever a disagreement between the partners, the partnership agreement may be quite useful. See How to Form a Partnership in Florida for additional information. You must file a Statement of Qualification with the Florida Department of State to create a limited liability partnership (typically utilized by professionals). See How to Form a Limited Liability Partnership in Florida for additional information.
• LLCs: In order to form an LLC in Florida, you must submit Articles of Organization to the Florida Department of State. For service of process, you'll also need to select a registered agent in Florida. Additionally, while it is not needed by law, you should draft an operating agreement to lay out the fundamentals of how your LLC will run. The operating agreement hasn't been submitted to the state.
• Corporations: You must file Articles of Incorporation with the Florida Department of State to form a corporation in Florida. For service of process, you'll also need to select a registered agent in Florida. You should also write bylaws to outline your corporation's internal running regulations, even if it is not legally necessary. The state does not need bylaws to be filed. S Corporations must also submit IRS Form 2553, Small Business Corporation Election, with the Internal Revenue Service.

5. Apply for Licenses and Permits
Tax Registration. You must register with the Department of Revenue (DOR) to collect sales tax if you plan to sell products in Florida. On the DOR website, you can register online or on paper using Form DR-1, Florida Business Tax Application.

EIN. You must get a federal Employer Identification Number (EIN) from the IRS if your firm employs workers or is taxed separately from you. Even though you aren't legally obligated to have an EIN, there are many commercial reasons to do so. Banks frequently require an EIN to create a business account, and other firms with whom you do business may also require an EIN to make payments. An EIN may be obtained by filling out an online application. There is no charge for filing.

General business licenses. The majority of Florida firms must acquire a general business license, also known as a business tax receipt, which is linked to a municipal business tax. A business tax receipt is obtained and renewed through the county or, in certain circumstances, the city in which your firm is located. For further information on how to file, go to the websites for your county and city.

Professional and occupational licenses. People who operate in a variety of areas, as well as certain types of enterprises, are covered. For additional information, see the state's website's Get a Business License section.

6. Pick a Business Location and Check Zoning
You'll need to choose a site for your company and look into local zoning laws. Take the time to assess the costs of running your business in the chosen location, including rent and utilities, before committing to a site. You may use your business plan to see if you can afford your preferred location in the early stages of your firm.

It's critical to double-check that the location is designated for your sort of business. Review your local ordinances and contact your town's zoning or planning department to find zoning restrictions for your town or city. More advice on choosing a site may be found in our post.

Running your business out of your house is a viable option to building a new site. Check your local zoning rules again if you decide to start a home-based business. In addition, check your lease (if you rent your house) and homeowners association regulations (if applicable) to see whether any of your home enterprises are prohibited.

7. File and Report Taxes
Owners of certain types of businesses will not owe state tax on their company revenue since Florida does not have a personal income tax. For additional information on state business taxes in Florida, see Florida State Business Income Tax.

Sole proprietorships. They file personal federal income tax forms and pay federal taxes on company income.

Partnerships. Partners pay federal taxes on partnership income.

LLCs. The money earned by LLC members is taxed at the federal level. Furthermore, if an LLC is taxed as a corporation under federal law, the LLC must also submit a state corporation tax return. Florida LLCs must also file an annual report with the Florida Department of State. For additional information, see Florida LLC Annual Filing Requirements.

Corporations. Dividends paid by the corporation must be taxed at the federal level. On his or her personal state tax return, a shareholder-employee with a salary must also pay federal income tax. Furthermore, the corporation must pay Florida corporate taxes. Finally, companies must submit an annual report to the Florida Department of State.

There are federal income and employer taxes in addition to Florida taxes. Check out IRS Publication 334, Small Business Tax Guide, and Publication 583, Taxpayers Starting a Business.

8. Obtain Insurance
Business insurance can safeguard your firm and your personal assets from the consequences of unforeseeable events like personal injury claims or natural disasters. An insurance agent can assist you in evaluating the various coverage alternatives, such as general liability insurance, which protects your company from claims of physical injury or property damage.

9. Open a Business Bank Account
Whatever sort of business you start, you should create a separate business account to make tracking your revenue and spending easier. A separate bank account is required for various company forms, such as LLCs and corporations, in order to preserve liability protection.

​​​Yoel Molina, Esq. (AKA “Mo”)

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