Florida Incorporation - The Sunshine State For Individuals and Businesses

By: Gust Lenglet

There are many benefits that may result from Florida incorporation, including important tax and additional financial advantages. As you plan your Florida incorporation, you will need to consider Florida incorporation filing requirements such as Florida articles of incorporation, whether you will want to form a Florida S corporation, and Florida incorporation law.

Florida has become one of the most desirable states in the country in which to conduct business. The State consistently leads the nation in new business incorporations. With one of the largest supplies of business parks, an advantageous business tax system, transportation availability, 14 foreign trade zones, an abundance of electrical power, and a large population of skilled human resources, Florida provides everything that a business requires to function.

Forming a Florida corporation can be a relatively simple process in that one person may be President, Secretary, or Treasurer (or any combination of officers) of the corporation as well as the sole Director of a Florida corporation.

Florida requires that an individual, or service company, be responsible for receiving important legal and tax documents.  This service is provided by an "agent" of the corporation who is "registered" within Florida, and is known as "Registered Agent." 

The registered agent for the corporation must have a valid street address within Florida and be available during normal business hours to receive documents.  The services performed by a registered agent may include:

Receiving and forwarding legal documents;
Receiving and forwarding franchise tax and annual report forms; and,
Accepting and forwarding service of process.
A Registered Agent must be an adult, residing within Florida and provide a physical address (no P.O. boxes).

To begin with, there is no personal income tax in the State of Florida.   While regular corporations are subject to a 5.5% tax on federal taxable income over $5,000, if you incorporate your Florida business and elect S status you can have your cake and eat it too!  Florida S corporations are NOT taxable entities and are therefore not required to file state income tax returns (except for the first year).  The result is this: you can have the benefits of a corporation, and pay no tax! 

 But there are more benefits:

Unlike most states, Florida does not have any minimum capital requirements.  So if you are just starting out and dont have a lot of money, you can still take full advantage of incorporating without having to put a lot of cash into your company.  Some states require you to fund your corporation with at least $1,000 in capital.  This is not the case in Florida.

Florida is increasingly becoming known as a business friendly state.  It already has some of the lowest annual fees and corporate reporting requirements in the country.  But heres some even better news: The shareholders, directors and officers of a Florida corporation can remain anonymous if they so choose!

The Secretary of State of Florida does not require the names or addresses of shareholders, directors or officers to be listed in the articles of incorporation.  Since the State does not keep a record of who owns or controls the corporation, you can conduct business in Florida with complete PRIVACY.

One of the first decisions a business owner must make after deciding on Florida incorporation is selecting the proper state of incorporation.  While there isnt a one-size-fits-all answer or standard, some states are better to incorporate in than others.  Florida happens to be one of the better choices.

Florida imposes a franchise tax on foreign and domestic corporations for the privilege of doing business in Florida. The tax rate is 5.5% of net income. The first $5,000 of net income for the year is exempt.

S Corporation status is recognized by the State of Florida. Further, Florida does not have a personal income tax; thus shareholders would not be taxed on corporate earnings. A separate state election from the federal election is not required.

For more information about taxes, please visit the Florida Department of Revenues at http://www.state.fl.us/dor/

Florida requires some businesses to obtain a license and pay a fee if you are operating in the state. Please check with the state to make sure your business is complying with the license requirements for your particular profession.

Gust A. Lenglet is an accountant and financial advisor for many years. He is President and CEO of HBS Financial Group, Ltd. and offers online tax filing as well as income tax articles and information.