Our company will be able to guide you step by step while opening a new business in Florida. Presenting you with the different types of business structures available so you can make an informed decision, then checking for name availability, to help you register with the IRS to determine your business needs and requirements. If needed we also guide you on how to register with the Department of Revenue for State Tax Registration.
Choosing the business structure is one of the most important decisions you will make. The type of business structure you decide, will have a direct impact on the amount of taxes, the amount of documentation your business will need to submit, the degree of control you will have over your business, and the degree of personal liability you will face.
The commercial structure you define will depend directly on the type of business and the industry to which you want to belong. Some types of businesses require specific business structures and/or professional licenses.
The most common structures are:
Limited Liability Association – LLC: The main benefit of an LLC (Limited Liability Company) is that it protects the personal assets of the owners by being limited liability. This avoids putting the owners’ assets at risk in case of problems. They have tax flexibility AND can avoid double taxation. That is, LLCs are consider a “pass-through” tax entity, whose income is taxed as the owner’s personal income rather than as business income for federal income taxes
For these reasons, LLCs may be appropriate for simple businesses involving one owner or a small number of owners, but in more complicated situations an LLC may be more appropriate.
Corporation: The corporation is responsible for the actions and finances of the business. Likewise, it protects the personal assets of the owners, but double taxation is not avoided (that is, it is doubly taxable). This means that the company’s losses or gains are taxed at the company level and again at the shareholder level when dividends are paid.
LLCs and corporations have owners, but the form of ownership is different. The members of the LLC, having invested to become part of the company, have an equity interest in the assets. The owners of the corporation are shareholders and share shares in the business.
State Registration is required for your company to be “born.” (This is why the state issue the Articles of Incorporation once registration is approved. Registering the company opens the possibility of opening a bank account, entering contracts, hiring employees, obtaining licenses and permits.
It is very important that you stay up to date with the registration requirements to keep your company active. These requirements may vary from state to state. To keep your business active, you are required to pay an annual fee to the state. This renewal must be done every year before May 1st or a late fee of$400 is imposed. After September, if you have not paid this annual fee, the state dissolves you administratively.
The information required is as follows:
The employer identification number, also called a federal tax identification number, is an EIN is a nine-digit number assigned by the IRS which identifies a business entity for business tax purposes. This number is required to open a business bank account, and for identification purposes at the time of applying for state and local licenses. The EIN number serves the same function as the social security number, but at the commercial level.
The information required to obtain an EIN is as follows:
• Choose a responsible person who will be in charge of the control and operation of the identity – Must be a taxpayer with a valid (SSN, ITIN, OR EIN)
• Local address, email, telephone number of responsible person
• Decide if you plan to have W-2 employees in the near future
• Have defined the main activity of the business
Now, if you don’t have an SSN or ITIN, obtaining the EIN takes a little longer since the process is done on paper, but it is possible.
It is important to open a business account and keep transactions separate from personal ones.
The information that is normally required by banks for the opening of a commercial account is the following:
Some banks require a deposit and offer different services included at the time of bank account opening. You can go to the website of the bank of your interest to find more information. We always recommend making an appointment with a representative of the chosen bank to avoid unnecessary queues.
Among the benefits of opening a bank account are the following:
Financial protection for you and your business – For example, if your business is an LLC, your personal assets will not be in jeopardy if your business cannot pay the debts incurred and VICE VERSA your business’s credit score will not be affected if you have a financial crisis on a personal level
It is the easiest and simplest way to organize your expenses
Fewer headaches in tax season
Be able to accept payments from customers and make payments to suppliers, employees or contractors.
Managing cash accounts – such as Cash App, Venmo, Zelle, etc.
A business bank account is a prerequisite for obtaining a loan, accepting credit card payments, and accepting payments through a POS (Point-Of-Sale)
The DOR is the government entity in charge of collecting taxes, such as payroll tax and sales and use tax. Companies that sell, rent, or use a license to use goods, provide certain services must collect the amount corresponding to sales taxes and this, in turn, must be paid to the DOR at the end of each declaration period.
When starting a business in the state of Florida, you will need to determine what taxes apply to the type of business you will be conducting. For most taxes, you must register with the DOR before you begin collecting, reporting, or paying state taxes. The Revenue department classifies your company according to operational activities and after your application is approved, tells you what types of taxes apply to your business.
Among the most common taxes are:
Sales and Use If you will sell, rent, lease or repair goods, provide certain services, rent or lease short-term commercial lodgings, lodgings or real estate, or buy and use in your business taxable products that are not taxed when you purchase them, you must register with DOR before starting your business.
Reemployment Payroll Tax provides partial and temporary income to workers who lose their jobs due to circumstances beyond their control and who are able and available to work. Florida employers pay the reinstatement tax. If your company is hiring workers in Florida, you must register with DOR.
According to the IRS, you must keep track of labor taxes for at least four years.
It is IMPORTANT TO KEEP A GOOD ACCOUNTING RECORD TO HELP YOU monitor the development of your company, prepare financial statements, identify sources of income, track deductible expenses, support matters reported on tax returns.
We help you identify which taxes apply to your business and process your application with the DOR.
Be sure to check the website of the local county and city where your business will be located for rules and requirements. Some local governments require additional permits. Typically, permits are renewed annually.
In addition to federal and state taxes, you should check with your local county tax office to find out what taxes are due for your business.
You should consult with your local city government to determine id municipal taxes are required for your business. At the moment, the state of Florida does not have state or commercial taxes.
The Florida Department of Business and Professional Regulation (DPBR) and the Florida Department of Agriculture and Consumer Services (DACS) grant licenses or permits to businesses. You must keep this step-in mind when opening your company. The state of Florida, the federal government, your county local government, and/or your local city or municipality may regulate your business and require specific business licenses.
Remember that it is important to find the best insurance plan to protect your business. This is one of the many important decisions you will have to make before starting or developing your business. To determine what insurance, you need for your business, you’ll need to evaluate your assets, risks, and other business requirements.
Among the types of insurance that business owners should consider are:
Workers Compensation Insurance: Florida law requires business owners who have employees to pay for this type of insurance, which provides medical and wage replacement benefits to employees who are injured on the job. Specific state coverage requirements are based on the type of business, number of employees, and company structure.
COMMERCIAL AUTO INSURANCE If your business owns, rents, or drives motor vehicles, you must have commercial auto coverage.
GENERAL COMMERCIAL LIABILITY INSURANCE General commercial liability insurance covers your legal defense in many cases and protects your company from economic loss due to injury, death, advertising damage or property damage caused by your products, business activities or employees.
Professional liability insurance covers claims arising from illegal practice by doctors, attorneys, or other professionals
Cargo and transport insurance covers the goods or products of your company during transport by ship, truck, train, plane, etc.
Having a clear management of the company’s accounting will allow you to:
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When starting your own business, you will face many challenges while taking care of many tasks, from...
