Form a Florida Corporation

Low Taxes and Fees

Hindsight is 20/20. Years from now you will be thanking yourself for incorporating multiple corporations in Florida to reduce the risk of your businesses all going down together. One of the major benefits of incorporating in Florida is that the state charges relatively low annual fees and has low incorporation fees while offering strong protection against stockholder liability. The only annual fee in Florida is a $150.00 annual report fee. Incorporating in Florida only costs $70, which is much lower than other jurisdictions.

Florida Has Minimal Compliance Requirements

Florida has fewer requirements for compliance. This minimizes compliance costs and gives business owners many options. For example, it has no minimum capital requirement for a corporation. This allows a company flexibility when deciding to sell stock or issue a dividend. In addition, Florida does not require more than one director. That director can be all titles. These titles do not need to be held by different persons. The same person, therefore, can be the sole Director, President, Treasurer, and Secretary. Finally, the state of Florida protects shareholder privacy. Florida does not disclose or keep records of stockholders, although it does disclose the identities of directors, officers, and registered agents.

Florida Has a Legal System with Experience in Corporate and Commercial Law

Florida's legal system has experience in corporate and commercial law. For example, many parties chose Florida as the forum for maritime and admiralty law disputes. Florida's Business Corporation Act also protects majority shareholders from liability.

Segregate Your Personal Assets from Your Business

Many people use Florida corporations to operate their businesses. Using a Florida corporation to segregate business interests gives its stockholders protection against "enterprise liability", which avoids having a judgment against the business also attaching to other related businesses. It is not wise to keep all your eggs in one basket, so separate companies should be filed for different locations of a business, and businesses with a different purpose, even if managed under the same roof. The time to separate your business interests is before you have a problem.

Segregating assets in a corporation protects stockholders by limiting their personal liability for claims against the corporation to the value of the corporation's assets. For example, a person who owns a fishing charter can use a corporation to protect his or her personal assets from the claims of customers and third parties who may be injured by equipment accidents, business vehicle accidents, or other accidents. Moreover, a business owner can use a corporation to protect his or her personal assets from the claims of business creditors if the business is struggling in a slow economy. Likewise, a person who owns a vacation home in Florida can use an LLC to own the "sticks and bricks" but use a separate corporation as a management company to be the landlord to further protect the underlying real estate from claims against the management such as breach of lease contract claims. Likewise a car dealership can use an LLC to own the land a lease it to a corporation that runs the business for favorable tax treatment and liability protection. This applies to all sorts of businesses from service businesses to manufacturing businesses.

Choose a Name for Your Florida Corporation

Before drafting any organizing documents, it is necessary to decide on a name for the corporation. Florida has a few statutory requirements for corporation names. First, the name cannot conflict with the names of any existing corporations or other entities or Florida trademarks. The Florida Secretary of State provides a business entity search on their website to check for any potential conflicts. The name must also conclude "company", "corporation", "incorporated", or abbreviations thereof. If these requirements are not met, the Secretary of State will reject the name, requiring an alternate name to be submitted prior to incorporation.

Choose a Florida Registered Agent

All Florida corporations must have a Registered Agent with a street address in Florida to receive service of process and notices from the state. This address must be a physical address, not just a mailing address. An incorporation service, such as Agents and Corporations, Inc., will act as a registered agent for an annual fee in addition to helping with the process of incorporating. The only time you should consider not using a commercial registered agent is if someone will be home during business hours year-round to accept official notices.

Draft and File Articles of Incorporation

Drafting Bylaws and Shareholder Agreements

In addition to the articles of incorporation, corporations are also governed by bylaws. The bylaws, which are not filed with the state, are used to specify parts of corporate governance that are not included in the articles of incorporation. There are many provisions that should be included in the bylaws, such as listing the number of directors, notice requirements for annual stockholder and director meetings and any other regular or scheduled meetings, voting rights, and powers of the officers. Because these bylaws will govern the operation of the corporation, it is important that they are both clear and complete.

Corporations should also have shareholder agreements if there is more than one shareholder. While not required by Florida law, a shareholder agreement is important because it defines the relationship between the corporation and its shareholders. This can include provisions such as limitations on the transfer of shares and voting procedures to protect shareholder rights. This will be your most essential document during a falling out, because it is like a pre-nuptial that may keep you out of court by establishing values , triggers, and procedures for a buy-out