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Florida Considerations for LLC & Corporations 

A Resource for Newly Formed LLCs/Corporations

  • Federal Employer Identification Number. Every business is required to obtain from the Internal Revenue Service (IRS) an Employer ID Number (EIN). A business may apply for an EIN at www.irs.gov ® Businesses ® Small Business/Self-Employed ® Employer ID Numbers (EINs). The same page provides alternatives of toll-free telephone, mail, or fax application for an EIN. In any case, an authorized officer of the corporation must make the application.

  • Annual Report. Every LLC/corporation incorporated in Florida or qualified to do business in Florida must file an Annual Report with the Department of State (department) on the required form. If this report is not filed by May 1 of every year, the corporation will become subject to late filing fees and eventually will be administratively dissolved by the department. See Chapter 15 of this manual for procedures for filing with the department.

  • Governing Documents. LLC/Corporate officers should sign corporate documents only in their official capacity. Each document should clearly indicate the title of the officer/member signing on behalf of the corporation.

  • Trademarks. The grant of a corporate name by the department does not establish any right to that name. There are no assurances that the chosen corporate name does not infringe on the rights of some other party (e.g., federal or state trademark registration or prior usage). In addition, the grant of the name does not provide the corporation with registered trademark protection for the name. If the corporation is to use any trademarks or service marks (including its corporate name), it should consider official state or federal registration of the marks.

  • Fictitious Name. The entity should use its full name in all of its business activities. If the corporation wishes to use a name other than its full name when conducting business, it should file a fictitious name application with the department. See F.S. 865.09.

  • S Election. The LLC/corporation may elect to qualify as a small business corporation under the Internal Revenue Code. The corporation should consult with an attorney or an accountant before making this election. If the corporation chooses to elect S status, it must file IRS Form 2553 with the IRS not later than the 15th day of the third month of the desired taxable year. See §2.16 of Florida Small Business Practice; Treas.Reg. §1.1362-6(a)(2)(ii).

  • Withholding Federal Income Tax and Social Security Taxes. The corporation may have to withhold income and social security taxes from wages paid to employees. Proper arrangements should be made for the required deposit of these taxes and for the timely filing of the required returns.

  • Florida Corporate Income Tax. Florida corporations filing federal tax returns are required to file a Florida corporate income tax return. The income tax is based on 5.5% of Florida net income, which is equal to the corporation’s adjusted federal income, with certain modifications. For corporations whose business is conducted, in part, out of the state, net income is apportioned. (F.S. 220.11 sets base tax rate; F.S. 220.15 provides for apportionment.)

  • Sales and Use Tax. If the entity is to be engaged in a sales or service business, it may need to obtain a Florida sales tax number, collect the tax on each taxable transaction, and file periodic sales tax reports. If the entiy maintains that an exemption, such as sales for resale, applies to its business, it should be careful to comply with all of the regulatory require­ments for the exemption. Click Here for more information.

  • Tangible Personal Property Tax and Real Estate Tax. If the corporation owns tangible personal or real property, it will be subject to Florida tangible personal property tax or Florida real estate tax, or both. These taxes are assessed annually by the counties in which the corporation’s properties are located.

  • Occupational Licenses. The corporation may have to obtain various occupational licenses and pay the required fees in the counties and municipalities in which it engages in business. In addition, many trades and professions require licenses from the Florida Department of Business and Professional Regulation. See Chapter 14 of Florida Small Business Practice (Fla. Bar CLE 5th ed. 2004, 2007 Supp.).

  • Qualification as a Foreign Corporation. A corporation engaging in business in states other than Florida should pay careful attention to tax laws and other filing requirements in the subject states. The corporation may have to pay tax or qualify to do business in those states.

  • Workers’ Compensation. If the corporation will have four or more employees or is in the construction industry with one or more employees, it must carry workers’ compensation insurance. F.S. 440.02(17)(b)2. Conventional insurance companies provide workers’ compensation coverage, so the corporation should contact its insurance agent to arrange for coverage. See also the Department of Financial Services, Division of Workers’ Compensation website at Workers' Compensation Home (myfloridacfo.com).

  • Casualty and Liability Insurance. The business entity should obtain casualty and liability insurance on its property and operations. The entity should also discuss with its insurance agent other types of insurance that may be required because of the nature of its business, including Directors and Officers Insurance. See §7.37 of this manual.

  • Unemployment Tax. The corporation may be required periodically to remit both Florida and federal unemployment tax based on amounts paid to its employees.

  • Payments to Non-U.S. Persons. A corporation that makes any payments to a non-U.S. corporation or nonresident alien may have a United States tax withholding requirement.

 

An experienced corporate and business lawyer can help clarify and guide you through these and many more considerations.

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