One of the brightest aspects of the Sunshine State for entrepreneurs is that Florida is one of the top states in the U.S. for starting and owning a business. Why? There are a few reasons.
Florida has a positive reputation for a low corporate tax burden attractive to businesses and a robust labor market thanks to abundant opportunity. Plus, with a booming local economy and high tourism, Florida’s GDP growth rate has now made it the 14th largest economy in the world.
Starting a new business is an exciting time in any entrepreneur’s life, but with that excitement comes a lot of complex paperwork, planning and compliance. So, we have compiled a list of 10 steps to starting a business in Florida to make the process as easy as possible.
However, please note that while this article provides the essential information you will need to start your business, consulting the expertise of local financial advisors and law professionals as you begin your business journey can provide further clarity and expedite your process.
Now, let’s get down to business.
Step 1: Determine the Type of Business Ownership
Step 2: Register with the Florida Department of State
Step 3: Register the Business Name
Step 4: Register for an EIN Number
Step 5: Register with the Florida Department of Revenue
Step 7: Register for the New Hire Program
Step 8: Apply for a Business License or Permit
Step 9: Check Local Regulations
Step 10: Open a Florida Business Bank Account
The type of ownership structure you select for your business will largely depend on a few key items. Are you going through it alone, or do you have partners? Will you operate a for-profit or not-for-profit organization? What level of liability do you or your business require?
How you answer these questions, along with others, will help narrow down and determine which type of business structure is the best fit financially and legally.
To help you get started, let’s explore the most common types of business ownership structures in depth: Corporation, Limited Liability Company, Cooperative/Partnership and Sole Proprietorship.
If personal liability is a top priority for your business and its shareholders, corporations are an excellent choice as they offer the strongest protection for asset security.
However, while limiting liability for key stakeholders can be advantageous, developing a corporation can be time-consuming and expensive and requires a higher level of financial scrutiny and processes over time.
Click below to learn about the four types of corporations:
LLCs are simple and versatile, making them a popular option for smaller businesses. Unlike corporations, which are owned by their shareholders, LLCs are owned by one or more individuals. Still, LLCs offer the liability protection of corporations, protecting personal assets from company debts. Plus, LLCs offer pass-through taxation, so profits and losses are reported on the owners’ individual tax returns.
Click below to learn about the seven common types of LLCs:
Choosing a partnership structure for your business offers shared expertise, resources and workload. Partnerships also provide diverse perspectives and thought that can promote innovation and more efficient problem-solving.
When partners pool their resources, skills and networks, businesses have an opportunity to grow and expand at a faster pace. Generally, there are three types of partnership-based business structures:
The simplest form of business structure, a sole proprietorship, is owned and operated by a single business owner. Many small businesses begin as sole proprietorships due to their low barrier to entry, and owners enjoy minimal paperwork and governmental regulations.
During tax time, the business owner and business are considered one entity, so all income and expenses will be reported on your individual tax returns.
A consideration for this type of structure is that it does not provide liability protection like other types and that all risk to the business belongs to the owner. However, as your business grows, you can evolve your business structure to include more protection to secure your assets.
In Florida, most business types are required by law to register with the Florida DOS. Registration establishes a legal entity separate from the individual to protect you from risk and secure personal assets. You must also register your business for tax purposes and comply with local state tax laws on collecting sales tax and payroll withholding.
Depending on whether you choose a corporation, LLC or partnership structure—sole proprietors are not required to register their business with the state—you will need to provide specific information when you file your Articles of Incorporation or Articles of Organization with the Florida DOS Department of Corporations (DOC). Information you will need for registration is not limited to but will include:
For a more in-depth explanation of what information and documentation you will need and to obtain the appropriate forms, please visit the DOC’s web portal for starting your business in Florida.
As required by the Fictitious Name Act (s.865.09, F.S.), any business entity or individual must register a “fictitious name” or “dba” (doing business as) with the DOS before they are legally able to operate their business in Florida.
Registering a fictitious name with the DOS serves a couple of key purposes. First, it offers public transparency into the identity of business owners operating under that name, and fosters trust in the businesses consumers engage with. Also, business name registration in Florida ensures your business is compliant with state regulations and may offer levels of legal protection.
Visit the Florida DOS website to learn more about specific requirements and exemptions for this step of the process.
Like a social security number for private citizens, an EIN is a nine-digit number that identifies your business with the IRS for tax purposes. Most businesses in Florida must obtain an EIN before they can begin operating in Florida and experience other EIN benefits, including hiring and paying employees, business banking options, lines of credit, and more.
To obtain your EIN, please complete and submit Form SS-4 to the IRS by telephone, mail, fax or online.
An EIN is required in Florida for businesses that meet the following criteria:
If your business is a Florida LLC and none of the above applies to your business, you are not required to file for an EIN. However, please note that some financial activity provided through business banking accounts may require one in any case.
Most businesses will be required to register with Florida’s DOR before conducting any business activity that is subject to Florida state taxes and fees. By registering with the DOR, your business can comply with state tax laws, avoid penalties or legal matters and fulfill any tax obligations your business structure dictates.
Registering your business may be necessary for the following reasons:
To learn more about the benefits and how to register your business with the Florida DOR, please access their New Business Start-Up Kit for resources and forms.
Funding a business of any size can feel like one of the more daunting pieces of the startup process—especially when considering the wide range of capital needed depending on your business type and structure. However, you are not alone in the process. If self-funding is not an option, there are several avenues you can take to access the capital your business requires.
Options such as angel investors, venture capitalists and even crowdfunding sites are all viable choices to get you started, but one of the more popular options for many business owners is to take the route of business loans. Numerous types of business loans can come from many sources, including family, friends, or community banking institutions with expertise in various business loans and financial services.
The New Hire Program is a federal and state initiative that promotes the enforcement of child support orders and the administration of other governmental programs.
If your business has employees, Florida law requires you to report all newly hired or rehired employees to the New Hire Program within 20 days of the employee’s start state. This requirement applies to employees of all types—full-time, part-time, temporary, seasonal and independent contractors.
Failure to report employees to the New Hire Program is not only unlawful but also costly. Noncompliance may result in fines, penalties and other consequences for a business that fails to register.
More information can be found on the website of the Florida Department of Revenue.
Florida does not require business licenses on a statewide level. However, depending on the type of service your business provides, specific permits and licenses may be mandated by specific state government agencies.
In Florida, three state-level agencies oversee various business licenses. The Florida Department of Business and Professional Regulation (DBPR) manages licenses for construction, real estate and tobacco or alcohol businesses.
The Florida Department of Agriculture and Consumer Services (DACS) handles licenses for agriculture, food-related services, gambling, oil/gas and private investigation/security. The Florida Department of Health (FDOH) regulates healthcare professions and institutions, such as trainers, massage therapists and nutritionists.
If your business deals with hazardous materials or requires certification or special training, you will likely need to register for a business license or permit.
Depending on the nature of your business, various business licenses and permits may be required to operate your business in Florida:
Various business licenses may be required in Florida based on your particular business activity. Florida state agencies such as DPBR, DACS, and FDOH each regulate unique industries.
To learn more about your business requirements and how to apply for licenses and fee schedules, please visit the Florida Business Information Portal and enter your business type to get started.
While some licenses, permits and other types of registrations are required at the state level in Florida, various municipalities throughout the state also require registration through local government agencies at the city or county levels.
To learn if your area of operation requires localized licensing and permits, please visit the official government website of your specific city or county in Florida.
While a business bank account is not required unless your business is incorporated, it is often a best practice to keep your business and personal finances separate. This is not only a benefit come tax season—a business bank account also frequently offers perks and services that add value and ease for the business and its owner(s).
Another beneficial option for businesses is to work with a community bank with a vested interest in the areas they serve, like Seacoast Bank. Community banks are well-versed in local, regional and state regulations and offer relationship-based banking and financial advice that makes you and your business feel like more than just a number.
With Seacoast Bank, opening your business checking account is easy. You simply need to provide your business’s information, determine how you will fund your account and submit your application.
Even better, business checking at Seacoast offers a $0 monthly fee on all accounts that maintain a $1,000 average monthly balance—in addition to several other attractive features and benefits.
Aligning with a bank for business banking services is a good step early in the business start-up process. In addition to business checking accounts and loans, Seacoast offers additional business services that can benefit new business owners, such as payroll services, an Automated Clearing House (ACH) network, merchant services, reconcilement services, remote deposit capture, security and more.
To learn more about how our banking services can help support your new business startup in Florida, contact a local business banking specialist by filling out the form below or finding a local branch near you.
Topics: Start a Business
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