5 Steps to Setting Up an S Corp in Florida

If you want to maximize your tax benefits and protect your personal assets, consider setting up an S corporation, also known as an S corp, for your Florida-based small business. Forming as an S corp can be advantageous, but there are added requirements and regulations that S corp owners are responsible for. If you're ready to form as an S corp, use this step-by-step guide to learn how, along with other essential insights, that will help propel your business forward.

What Is an S Corporation?

Unlike a limited liability company (LLC), sole proprietorship, or C corporation (C corp), an S corp is a business entity that combines the benefits of a corporation (limited liability protection) with pass-through taxation. This entity type allows you to avoid double taxation on your income while providing the legal structure of a corporation. Your S corp will start as a corporation and convert into an S corp by completing Internal Revenue Service (IRS) Form 2553. After your business is officially formed as an S corp, you must follow federal requirements set by the IRS.

S Corporation Requirements in Florida

Florida offers an attractive business environment with its pro-business policies, no personal income tax, and a vibrant economy. However, there are a few requirements that S corp owners should be aware of before making an S corp election to enjoy the benefits of Florida corporations.To become an S corp, you’ll form a corporation with the Florida Department of State. After forming your corporation, you’ll file and submit IRS Form 2553. This will allow your corporation to elect to be taxed as an S corp.To become an S corp in Florida, your corporation must also:

• Be a domestic corporation 
• Have no more than 100 shareholders
• Have only one class of stock
• Have only allowable shareholders, which may be certain trusts, estates, and individuals. It may not be corporations, non-resident shareholders, or partnerships.
• Not be an ineligible corporation.

How to Start an S Corp in Florida

Now that you know what an S corp is and its requirements, follow these five steps to form your business as an S corp in Florida. 

Step 1: Choose a Business Name

Florida business owners must choose a business name that is distinguishable within the Florida Department of State records. Take these actions when selecting a name for your Florida S corp: 

• You should search for a business name with the Department of State and choose one that’s available and unique.
• Your business name should include Corporation, Company, Incorporated, Corp., Inc., or Co. 
• You shouldn’t use your business name until after you receive your filing acknowledgment from the Florida Division of Corporations.

Finding a unique brand name and (normal-looking) domain to go with it can be a bit of a time-sink for new business owners. This free tool from Business Name Zone generates name and domain combos for you based on your input – and it only takes a few minutes.

Step 2: Articles of Incorporation

You’ll need to file Articles of Incorporation to form your S corp in Florida. Ensure the following information is included with your submission: 

• Your corporation’s address
• Registered agent name, address, and signature
• Corporate purpose
• Officer and director information
• Effective date
• Stock Shares
• Incorporator’s signature

Understanding details regarding your corporate purpose, effective date, officer/director, registered agent, and stock shares is essential. 

1. Providing a corporate purpose for non-professional corporations is optional. The effective date for an S corp begins when the Florida Division of Corporation files your Articles of Incorporation.
2. Officers and directors also have requirements when filing your Articles of Incorporation. The addresses and names of your directors and officers are optional. However, if you want to include these names, there’s a format you’ll follow.
3. You’ll need to select a registered agent to start an S corp in Florida. A registered agent can be an entity or individual with a physical street address in the state. The registered agent must also provide a signature. For business entities who wish to provide a signature, an individual of the entity must sign to serve as a registered agent.
4. You’ll enter the number of stock shares your corporation will issue. You must provide at least one stock share to complete your Articles of Incorporation.

Step 3: Apply for a Business License

You’ll work with two main business license agencies to get your business license, either DACS (Department of Agriculture and Consumer Services) or DBPR (Department of Business and Professional Regulation). You cannot officially form your S corp without a business license.Florida offers additional business license agencies for health professions and other professions. If your S corp will focus on specific professions, you’ll contact:

• Agency for Healthcare Administration (ALFs, home care, nursing homes)
• Agency for Persons With Disabilities (Group homes)
• Department of Children and Families (Daycare facilities)
• Department of Financial Services (Insurance agents)
• Department of Health (Clinical social workers, nurses, tattoo artists)

Step 4: Obtain EIN

You can apply for an Employer Identification Number (EIN) in three ways: by fax, mail, or online. You can also get your EIN free.There’s only one difference among the ways you can obtain an EIN. The time to receive your EIN will vary from four days (if you apply by fax) to a few weeks (if you apply by mail). While you can receive an EIN immediately if you apply online, you’ll need to complete the application in one sitting.

Step 5: Complete and Submit IRS Form 2553

To complete the steps and gain S corp status, fill out and submit IRS Form 2553. This form allows a corporation to elect to be treated as an S corp in Florida. After completing IRS Form 2553, you’ll fax it to the IRS.

How much does it cost to start an S corp in Florida?

There are two state fees you're required to pay to start your S corp in Florida. There are filing fees, which cost $35.00, and a Registered Agent Designation fee, which is $35.00. The required fees cost $70.00 to start an S corp in the state.There are two optional fees which you may choose to pay. If you want a Certificate of Status, there’s a fee of $8.75. If you want a Certified Copy of your documents, there’s a fee of $8.75 per copy. 

How long does it take to start an S corp in Florida?

The IRS will accept or reject your attempt at becoming an S corp within 60 days of filing IRS Form 2553. They will transmit their determination via a ruling letter. Follow up with the IRS if they do not issue a decision on your Florida S corp. 

Let Us Help You Start Your S Corp

Properly forming your entity is a critical first step, and it's essential to get it right. This is where the team at 1-800Accountant, America's leading virtual accounting firm, can assist you. Our experts can guide you through each step of the process, ensuring you're set up for success from the start in the Sunshine State.

Whether it's business formation, tax advisory, or any of our professional accounting services, we have the affordable solutions you need to ensure your Florida-based S corp remains compliant. Schedule a quick consultation–usually 30 minutes or less to learn more.