Starting a Florida Corporation: Key Considerations and Steps
For entrepreneurs and investors in Florida, choosing the right business structure is important. While the most common options are Sole Proprietorship, General Partnership (GP), Limited Partnership (LP), Limited Liability Company (LLC), a Florida corporation offers distinct advantages for growth and asset protection.
The business structure you choose when starting a business in Florida determines everything from your day-to-day operations, ability to raise money, the amount you pay in taxes and how much of your personal assets are at risk.
In this guide we’ll explore the basics of Florida Corporation formation, covering key aspects like operational implications, capital raising, tax considerations, and personal liability protection.
Learn the essential steps to form a Florida Corporation, and understand its impact on your business’s future, even before consulting Florida business lawyers.
What is a corporation
You cannot form a Florida corporation with a simple handshake. Instead, to start a corporation in Florida, you must adhere to specific state requirements.
You’ll need to file Articles of Incorporation and pay the necessary fees to the State of Florida. This registration is essential to forming a Florida corporation, unlike the simpler setup for sole proprietorships or partnerships.
If your corporation was formed outside of Florida (including in a foreign country), you’ll still need to register in the State of Florida to operate here. To that extent, you must submit the Articles of Incorporation together with the required fees to the State of Florida.
Choose Your Florida Corporation: S Corps vs. C Corps
There are two types of corporations in Florida: S corporations and C corporations.
C corporations are the traditional structure, while S corporations blend features of LLCs and C corporations.
S corporations offer pass-through taxation, like LLCs, meaning that all of profits and losses of the corporation flow to the individual owners, but maintain a shareholder structure, like C corporations.
C corporations are generally more costly to establish and maintain.
Florida Incorporation: What You Need to Know
To file your Florida Articles of Incorporation, ensure you include these minimum requirements:
While Florida’s Articles of Incorporation have minimum requirements, your specific business needs may necessitate additional information.
Under Florida law, listing initial officers or directors isn’t mandatory, but it’s highly recommended. Florida banks typically require this information before opening a corporate account. Access the necessary forms at https://dos.myflorida.com/sunbiz/start-business/efile/fl-profit-corporation/
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Why Florida Corporations Need Bylaws
In addition to the Articles of Incorporation, Florida corporations can have Bylaws – your internal operating rules, as defined by Chapter 607 of Florida Statutes.
Bylaws govern your corporation’s operations. They are your corporation’s constitution, outlining decision-making, director/officer roles, stock structure, shareholder meetings, powers and duties of directors and officers, and amendments.
Florida recognizes corporate Bylaws as legally binding. When a corporation does not have a set of Bylaws, the default rules codified in Chapter 607 of the Florida Statute apply. However, the generic state rules are rarely ideal as they are not tailored to any specific business. Instead, having custom Bylaws protects your limited liability status and serve as evidence of the corporation’s structure and operational rules in legal disputes.
Bylaws and Florida Corporations
While Florida doesn’t mandate written Bylaws creating them is highly advisable. Bylaws prevent internal disputes over profits and direction, signal credibility to lenders and investors, and may be required for business immigration (including E-2, E-2 for Australians, E-2 for Canadians, E-2 for UK Citizens, L-1, L-1 for Canadians, L-1 New Office, E-1, H-1B, H-2B, E-3, TN, EB-1, EB-1C, EB-2 NIW, PERM EB-2 and EB-3, EB-5, EB-5 Regional Centers, EB-5 Visa for Canadians, green card through investment, employment-based green card).
Remember, a Florida corporation is a separate entity (distinct from its owners) shielding shareholders from personal liability for business debts.
The corporation may own property in its own name and sue and be sued in the corporation’s name. Capital is provided to the corporation in return for equity (stock, shares) or debt.
Shareholders in a corporation are not personally liable for the business obligations of the corporation. In practice, shareholders enjoy limited liability, meaning their personal assets are protected from the corporation’s debts. If the corporation fails to pay its debts, creditors cannot seize shareholders’ personal belongings like homes, bank accounts or cars.
Start Florida Corporations: Pros and Cons
The pros and cons of a Florida corporation are:
Malescu Law can assist
Planning to start a Florida corporation? If you’re considering a corporation, LLC or partnership, ensure you choose the optimal structure for your needs.
Contact our experienced business formation lawyers for a consultation. We’ll help you register your Florida corporation or determine if it’s the right choice for your venture.
We serve companies and individuals across all 50 states, the District of Columbia and Puerto Rico.
Contact us or schedule a consultation.
Do you want to start a Florida corporation?
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