Starting a business and setting up a corporation
Before you hang your sign, build your website or officially open your doors to the public, check out some useful next steps that will ensure your business launches smoothly and save you headaches down the road.
The first step logical step is to decide whether you will file for a corporation (or perhaps an LLC – Limited Liability Company). While it is easy in Florida for anyone to file the proper papers for either of these business forms, it is best to seek the advise of an attorney. There are a number of differences between the two forms, but essentially they both accomplish the same goal. That goal is to provide you with as much personal protection as possible is there should be a problem, such as an injury or a lawsuit. While a corporation or LLC may not provide complete protection, it is a lot of protection for very little money and upkeep. You will find that most attorneys will urge you to incorporate with either a corporation or LLC. Once approved by Florida (within a week usually) you are up and running as a legal entity and can move forward to opening accounts, renting space, purchasing equipment, etc.
A DBA, or “doing business as,” is also sometimes referred to as a company’s fictitious business name. A DBA is the name a company uses in commerce, in advertising and to open bank accounts. Corporations and LLCs are not required to register as a DBA, yet there are many advantages to doing so. To use a name other than the legal name of the company, a business must file and publicly register the DBA with Florida.
Often, the official names of corporations and LLCs are simply the first and last names of the business owners. While this name choice might have been practical when completing the Articles of Incorporation, it isn’t necessarily useful when he or she wants to advertise or market the business. Your DBA establishes recognition for your business in a way that your legal business name may not. By taking advantage of a DBA, you can develop your business identity, market your company to customers, and identify the company to other businesses in the area.
To register your DBA:
1. Make sure the DBA you want is available. Perform a preliminary name check with the state, which is free and can be done online.
2. Prepare and file your DBA documents with the state. This is a simple and inexpensive form to file and is available online and can be printed and mailed in with the filing fee – note that it must be renewed over time.
Once your DBA filing is approved by the state, you can use it on your marketing materials, including stationery, websites, and advertisements. You can also use your DBA to open a bank account.
Federal Identification Numbers. The IRS requires corporations to acquire a nine-digit Employer Identification Number (EIN) for filing and reporting tax information, and to open a business bank account. An EIN is required whether or not your business has employees. Like a person’s social security number, an EIN (also known as a federal identification number) is a unique identifier of a business entity. To apply for an EIN, a business owner must file IRS Form SS-4. You can apply on-line through the IRS Web site at www.irs.gov. You can also file by calling (800) 829-4933 or by faxing or mailing the completed SS-4 to the proper IRS site in the corporation’s state. Please note that corporations operating in the U.S. without a Social Security Number or Individual Taxpayer Identification Number cannot use the on-line process.
If your business has paid employees, you will also need to obtain a state identification number from Florida. Florida may also require a state tax ID number for specific types of businesses. To learn about your state’s requirements, contact your state’s taxation department.
Selling to Customers and Paying the Business Tax. In Palm Beach and other Florida counties, a tax is collected for the privilege of operating a business anywhere in the county, including municipalities. Anyone providing merchandise or services to the public, even a one-person company or home-based business must pay the Local Business Tax.
Obtaining a Business License. Sometimes, a city or county will require a special license from certain businesses within its jurisdiction. In addition, certain jurisdictions require you to display your license at your business location for the public to see. To learn more about requirements specific to your location, visit the state’s web site or the U.S. Small Business Administration’s Web site at www.sba.gov.
In general, opening a new business can seem daunting, but it is relatively easy and not very expensive from a legal standpoint. However, once you envision multiple employees, rental facilities, vehicles, machinery, assembly facilities, shipping of goods out of state and many other variables, it is best to consult a qualified business attorney and an accountant.
It is best to consult an attorney with substantial business law experience. There are so many different circumstances that a proper answer to your particular problem can only be obtained by a trained and experienced lawyer.
If you have any question regarding business matters, incorporation, employment agreements or otherwise, our firm may be able to help you.
