You will need to take several steps to start and operate your new business in Florida. This article provides step-by-step guidance on what you will need to do to get your business up and running in Florida, starting with incorporation.
We assume you will operate your business under an LLC, given that LLC’s have become a preferred business structure for new businesses.
Incorporate Your LLC. The first matter to address is incorporation. You will need to file your articles of organization with the Florida Department of State. You can file the articles online at www.sunbiz.org which is handled electronically. However, you can also file the articles by mail by delivering the articles to the Florida Department of State/Division of Corporations to their address in Tallahassee, Florida. The state filing fee is $125.00.
Make sure that your articles include a registered agent and registered office. The registered agent must have a Florida street address. P.O. Boxes are not acceptable for registered agents.
Calendar Your Annual Report. Once your LLC is filed, make sure that you pay the annual report to the Department of State each year. The annual report is due between January 1 and May 1 of the calendar year following the date of your formation. If you do not pay the annual report fee on time you will need to pay a stiff financial penalty. Failure to file the annual report could result in your LLC going inactive.
Get an Employer Identification Number (EIN). You cannot operate your LLC without having an EIN. The EIN is a nine-digit number which is assigned by the IRS to identify your business entity for federal tax purposes. Most LLC’s will need to obtain an EIN from the IRS.
EIN’s are assigned by the IRS. You can obtain the EIN online, by fax or by mail. To obtain the EIN online you will need to apply for it on the IRS’ website. To obtain the EIN by fax you will need to complete and submit Form SS-4 by fax. If you apply by fax you should receive the EIN in about four business days. You can also mail the SS-4 to the IRS. However, it could take four to five weeks before your EIN is processed by mail. My Firm can obtain the EIN for you.
Choose Your Federal Tax Classification. Once your LLC is formed, or even before you file your articles with the state, you will need to determine the federal tax classification for your LLC. If you are a single-member LLC you can be taxed as a sole proprietor or you can elect to be taxed as an S corporation or C corporation. If you choose to be taxed as an S corporation then you must file Form 2553 with the IRS within 2 months and 15 days after the beginning of the tax year in which your election is to take effect. If you are not sure how your LLC should be taxed at the federal level consult an accountant or tax specialist.
Florida’s Reemployment Tax. If you are starting a new business in Florida you will likely be responsible to pay reemployment tax under chapter 443, Florida Statutes. Reemployment tax is Florida’s state “unemployment” tax. An employer will be liable to pay reemployment tax if the employer’s payroll in any calendar quarter is $1,500.00 or more. The employer is also required to pay reemployment tax if the employer has at least one employee in 20 different weeks during a calendar year.
To register, the LLC/employer will need to submit Form DR-1, Florida Business Tax Application, with the Florida Department of Revenue. The form can be submitted online or by paper format.
E-Verify in Florida. As of July 1, 2023, private employers in Florida are required to verify each new employee’s employment eligibility. The verification process must occur within three (3) business days after the first day in which the employee begins working. To verify the employee’s employment eligibility, the employer can do it either by using the federal form I-9 or the E-Verify system, which is operated by the U.S. Department of Homeland Security. “E-Verify” is a free, internet-based application which private employers can use to electronically verify employment eligibility of new employees.
However, private employers in Florida with 25 or more employees are required by law to use E-Verify to verify the employment eligibility of their new employees.
New-Hire Reporting. An employer in Florida must report all new hire employees or rehired employees (and independent contractors earning more than $600 per year) to the Florida New Hire Reporting Center. The Florida New Hire Reporting Form can be downloaded from the Florida Department of Revenue’s website. The reporting obligation must occur within 20 days of the hire or rehire.
Worker’s Compensation Coverage. Your new entity may also be required to furnish worker’s compensation coverage. If your business is non-construction related, and if you have 4 or more employees, you must obtain worker’s compensation insurance for your employees. The LLC members must also have coverage unless they obtain an exemption. If the LLC member obtains an exemption the member will not be required to obtain worker’s compensation coverage. The exemption applicant must submit a Notice of Election to be Exempt application online with the Florida Division of Workers’ Compensation. For more information about obtaining worker’s compensation insurance in Florida contact the Florida Department of Financial Services.
Business Law Assistance. If you need legal assistance with the creation and operation of your new business please contact Boca Raton business attorney Joe Rosen.
