Starting a Business in Florida

Fri, Nov 29, 2013

Bankruptcy, General Legal Issues

Some rights reserved by Jason DirksStarting your own business is an exciting day for many. It might signal independence, a new life, new opportunities, or just more money. But starting a business should not be done without forethought, as there are many things to consider when starting a business in Florida.

First off, should you form an official business like a corporation or an LLC? Or should you just keep it informal and not do that right away? These questions are not answered easily. They depend on the type of business you are starting and what you plan to do with it. Qualified attorneys, and probably an accountant, are the best people to discuss this decision with. There are tax implications, liability concerns, and more to consider. Attorneys and accountants are great resources to help you determine what might fit your situation best.

You can form an LLC, or a Limited Liability Company, in Florida. Many find this a good solution when forming a business, as it involves a little less paperwork, among other things.

You could also form a corporation, which might protect you a little more from liability depending on the circumstances if a situation arises. But there are some different tax implications and a little more to do each year.

You could also just call yourself a sole proprietor, which makes things a little simpler sometimes but also has implications, like little protection from liability if something goes wrong. It is not a good choice for many types of businesses, but can work for some.

And if you are thinking of forming a business with someone else, you could consider a partnership.

Deciding amongst the above choices for your business should be carefully considered, especially when it comes to tax implications. An LLC can choose among a few tax choices, depending on whether or not there is only one owner and if they choose to be taxed as a corporation. An LLC can choose to be taxed as an S corporation, which could be helpful. The IRS does not recognize a single owner LLC as a taxable entity, so taxes are filed as a sole proprietor unless a different tax designation is chosen. This link to the IRS website discusses the tax implications of choosing to become an LLC.

If you choose to become a corporation, it is important to know that you will be filing a separate tax return for that business. This link on the IRS website discusses more about filing taxes for a corporation.

Also—Taxpayer Identification (TIN) numbers are required and suggested for many types of businesses. It is important for some tax filings, and also allows you to use that number instead of your own social security number. This is a link to learn more.

In addition, liability is a very important part of owning a business and protection from it should always be considered when forming the business. This is best discussed with a qualified attorney.

And don’t forget, sometimes businesses don’t work out. Bankruptcy is a real concern in today’s economy. We wrote a post on our blog a while back that can tell you more about the implications of bankruptcy on your business and the type you chose to form.

So, we’ve discussed liability and tax concerns for anyone in the US starting a business. If you are in Florida, there are a few other things to consider when starting a business in Florida.

Once you decide if you will be an LLC or corporation, or neither, you need to consider what Florida requires of businesses. Corporations are required to file an annual report and pay a fee each year. LLCs are required to fill out a form and pay a fee each year. There are stiff penalties for not doing so. Sunbiz.org is Florida’s website for doing this. There you can learn more about requirements of businesses in Florida.

And don’t forget your local city or county government. Depending on what area you live in, you may be required to do paperwork and pay a fee to have a business running. Some areas may also not allow you to run a business out of your home. This link is for the city of Sarasota and talks about various aspects of running many types of businesses in the city of Sarasota. You would find similar info for many areas of Florida on the city or county’s website. As part of this, some areas will require you to register your business equipment with the city or county.

As you can see, there are many things to consider when starting a business in Florida. After you gather your ideas and make a few plans, check with qualified professionals before you officially start anything to help avoid problems down the road.

Attorney Christopher D. Smith is a Lakewood Ranch, Florida attorney with SmithLaw Attorneys. He concentrates in bankruptcy, civil litigation, probate, and elder exploitation cases in the Sarasota and Bradenton area. He also helps businesses start and continue to run smoothly. Call 941-907-4774 to learn more and to ask about our free consultations.

Image: Some rights reserved by Jason Dirks

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