How To Start A Business In Florida (2022 Guide) – Forbes Advisor

In order to incorporate a business in Florida, you must choose a business name and decide on your business structure. There are different types of corporations including sole proprietorships, limited liability companies (LLCs), limited liability partnerships (LLPs) and corporations.

one-man business

A sole proprietorship is an unincorporated company that has only one owner. Unlike corporations, sole proprietorship income is taxed as the owner’s personal income. If you opt for a sole proprietorship, you as an entrepreneur are personally liable for your business debts and obligations. If you operate in Florida, there is no Florida income tax, but you may have to collect sales tax.

Freelancers and gig workers often start out as sole proprietorships and later upgrade to an LLC once company profits justify the expense of forming an LLC.

Limited Liability Company (LLC)

Unlike a sole proprietorship, an LLC is a separate legal entity with one or more owners or members. When you form an LLC, creditors cannot legally pursue your personal assets as long as those assets have been secured by the LLC and not by you personally. Should your LLC ever file for bankruptcy, your personal assets are protected from the liability of creditors and employees. An LLC can choose to be taxed as a sole proprietorship, partnership, or corporation.

There are many ways to form an LLC in Florida. The best LLC services will handle all of the details of incorporating your business for you, including obtaining a Federal Employer Identification Number (EIN) and filing any legal documents required by the state of Florida to incorporate your business.

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Limited Liability Company (LLP)

An LLP is similar to an LLC in that it provides legal protections for owner partners. In Florida, however, LLPs are still personally liable for the debts of the partnership. The LLP offers each partner protection from the liabilities of other partners. LLPs are commonly used by people providing professional services, including architects, lawyers and accountants. While some states do not offer LLPs, Florida does.

LLPs are pass-through tax subjects, with partners paying income tax on the company’s profits on their personal tax returns.

group

Forming a corporation is similar to forming an LLC, although the structure of a corporation is different. As with LLCs, corporations are separate legal entities that protect the owners’ personal assets, but corporations also have shareholders, directors, and officers. Companies are subject to other requirements, such as B. holding regular meetings of shareholders and maintaining company records.

An S corporation (S corp) is a type of corporation that offers certain tax benefits to those who qualify for S corp status. Larger organizations that wish to issue more than one class of shares or rely on raising venture capital are usually incorporated as C-Corporations (C-Corps).

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