Florida is a great place to start a business. A combination of a rich culture, beautiful cities like Miami, Orlando or Tampa Bay, and access to the world’s transport networks makes the state home to some of the biggest businesses in the U.S. Headquarters of companies like Publix, Tupperware, Burger King and more are proud to call Florida home. One of the world’s largest entertainment companies, Disney, is famous for its Disney World theme park in Orlando. The lack of a state tax can also make it financially advantageous to start a business there.
What Type of Florida Corporation Should You Choose?
When it comes to incorporating a business in Florida, you have a few options for the type of corporation you want to create. This is known as your “legal business entity”, and it defines how your Florida business will be treated by the FL Division of Corporations, the law, the IRS and other official bodies.
Most new entrepreneurs have a choice of several FL business types: sole proprietorship, partnership, Limited Liability Company (LLC), S Corporation or C Corporation.
Here’s a quick overview of each type of business entity.
Advantages of Forming a Florida Corporation
Florida corporations have several benefits for business owners.
- Florida corporations provide the strongest form of liability protection possible. They insulate your personal assets and finances from those of your business.
- This means that any liabilities created by your corporation (debts, obligations, damages, bankruptcy or other liabilities) should not impact your personal money, property or assets — they are considered completely separate from a legal perspective.
The Advantages of a Florida Corporation Versus an LLC
There are several reasons an entrepreneur might choose to form a FL corporation instead of a Florida LLC.
Taxation Benefits of a Florida S Corporation Over an LLC
A Florida S Corporation will often pay less self-employment tax on owner earnings than an LLC. Note that a FL LLC can choose to be treated as an S Corporation for tax purposes by filing Form 2553 with the IRS, which removes this restriction. Florida C Corporations do not have this advantage over an LLC.
Florida S Corporations and C Corporations Make It Much Easier to Transfer Stock and Ownership
If you want to easily transfer ownership through buying and selling stock, you will need a FL C Corporation or an S Corporation. C Corporations have much more flexibility than S Corporations, and both are better than LLCs for stock and ownership transfers.
Florida C Corporations Provide the Main Advantages for Buying and Selling Stock
C Corporations provide certain benefits when it comes to buying, selling and transferring stock. Here are the rules for both S Corps and C Corps:
Advantages of Opening an S Corporation in Florida
In addition to the general benefits above, FL S Corporations provide several other advantages:
Advantages of Opening a C Corporation in Florida
In addition to the general benefits above, Florida C Corporations provide several other advantages.
Important Points About How to Start a Corporation in the State of Florida
Here are some areas to be aware of when you’re creating a corporation in Florida.
First, FL corporations are formed on the state level by filing Articles of Incorporation with the Florida Division of Corporations. Incfile specializes in helping entrepreneurs form Florida S Corporations and C Corporations and can collect the information and file this form on your behalf.
When you incorporate a business as a corporation, the Florida Division of Corporations will treat your business as a C Corporation by default. A C Corporation will become an S Corporation when all shareholders wish to change the corporation’s status to an S Corporation with the IRS. You can make this choice when you first form your Florida corporation or at any time after you incorporate.
There are some similarities and some differences between S Corps and C Corps:
Your State of Florida Corporation Must Follow Certain Rules and Regulations
All Florida corporations must follow stringent compliance rules and regulations. These include financial reports, bylaws, corporate formalities, taxes, fees, business licenses and the like. You can find links to these below.
Are you ready to start your Florida corporation? If so, we can help. We provide comprehensive corporation formation services for both S Corporations and C Corporations in Florida.
Detailed Information for Your Florida Corporation
You’ll find plenty more insight and guidance on the other pages of this guide, including: