As an entrepreneur in Florida, you have the opportunity to join a growing body of small business owners throughout the state who have turned their hobby or dream into a lucrative business. Starting a business in Florida can be made less difficult by knowing what type of company you wish to start and where exactly in the state you would like to build your establishment. From there, you need only determine the best business structure, construct a business plan and then license and register your organization. Once you officially open for business, there may also be tax expenses to take into account. For additional resources to start your business right, you can visit the Florida Small Business Development Center, with several locations throughout the state. Once you have set up your company in Florida, the next step is to fund your business through loans, investments and your own savings and income.
Before you can register your business and apply for a license, you need to know what type of structure your business will operate as. The five most common business structures are listed below, each with its own licensing, registration and tax filing requirements:
- Sole Proprietorship: You are the only business owner and have no employees.
- Partnership: You and one or more people own the business together, each contributing property, money, skill or labor, and each sharing in the business’s profits and losses.
- Corporation: The business becomes its own entity that conducts its business, makes its net profits or losses, pays its taxes and distributes proceeds to shareholders.
- S Corporation: A type of corporation with all income and losses, credits and deductions passed through to the company’s shareholders.
- Limited Liability Company (LLC): The liability of owner-members is limited, in most cases, to the assets of the business itself. As this structure is permitted by state statute, the distinct regulations for LLCs in other states may differ.
For your business to have the greatest chance of success, you should start out with a clear plan for how to achieve that. Most companies start with a business plan. The structures for these plans vary considerably, depending in part on the type of business. Most business plans include a summary of all the company’s executives, a description of what business the company plans to conduct, the products and/or services the company plans to provide, a marketing plan that may include a market analysis, a strategy and implementation plan and, of course, the numbers. This last part of your business plan should focus on financial planning and projections. In most cases, this plan will serve you and your team as a central guidepost. However, it can also come in handy when you speak with lenders and investors.
Licensing and Registration
Contact the County Tax Collector for your county to find out if you need a business license to start the company you are planning. There are over 65 counties in the state of Florida and each one has its own requirements regarding small business licensure. Once you have completed this, there are three places you must register your new business: with the Florida Department of Revenue, the U.S. Internal Revenue Service (IRS) and the Florida Department of State. Note that registering with the IRS allows you to receive, if applicable, your Employer Identification Number (EIN).
There are more than 30 different taxes and fees you may need to pay in order to run certain types of businesses in Florida. The most common are described briefly below:
- Communications Services Tax - If communications services are among the services your business provides, such as home satellite systems, video programming and telecommunications, then you are required to collect and pay this tax.
- Corporate Income Tax - All entities that conduct business or receive income within the state are required to file a corporate income tax return with the state. This includes organizations that are located outside the state but earn income from Florida.
- Discretionary Sales Surtax - Imposed by many Florida counties, this tax applies to most transactions that are already subject to the sales and use tax (see below). If you sell or deliver goods or services considered taxable under the Sales and Use Tax to a county where a Discretionary Sales Surtax is imposed, then you must collect that surtax at the imposed rate in that county.
- Sales and Use Tax - If you plan to sell, rent, lease or license the use of goods, commercial property and particular services, then you will need to register as a dealer to collect and pay sales and use tax prior to starting to conduct business in the state.
- Reemployment Tax - The Department of Revenue administers this tax that funds benefits paid to former employees who lose work through no fault of their own and are ready, willing and able to work. There are several criteria used to determine whether or not a particular business needs to pay the Reemployment Tax, including quarterly payroll or employment hour minimums, being a government entity or payment of federal unemployment taxes. Employers not required to pay Reemployment Tax may nevertheless choose to pay it.