If your profession requires a state license and you want to start your own business, forming a professional business entity, such as a professional corporation or a professional limited liability company, could be the right move. Creating a professional business entity can help protect you from personal liability, which can be essential to your financial wellbeing.
While we don’t offer professional corporation formation in Florida, we do offer LLC and incorporation services.
A Florida professional corporation (PC) is typically formed for the purpose of providing professional services in a specific area. All corporation shareholders must be licensed in the professional service area, which can include any service that requires a license or legal authorization. Some examples include accountants, dentists, architects, attorneys, realtors, and others.
There are two choices when it comes to forming a Florida business for providing professional services. There are some tax benefits associated with professional limited liability companies (PLLCs), and they’re often easier to form. However, PLLCs can’t issue stock and don’t provide as much liability protection as a Florida PC. A PC may be a stronger option for high-income service providers.
There are a number of steps to successfully forming a Florida professional corporation.
In Florida, shares of a professional corporation can only be owned by a PC, a PLLC, or a licensed individual authorized to provide that specific professional service. Sale or transfer of ownership must adhere to the same restrictions. This means that if you’re forming a PC to provide legal services, only licensed attorneys (or another PC or PLLC made up of licensed attorneys) can be shareholders.
Florida has restrictions on names for a PC, and the name must contain the words “chartered,” “professional association,” or “P.A.” A Florida professional corporation is prohibited from using any other terms to indicate that it’s a PC. Usually, these terms can just be added on to the end of whatever name you choose.
It’s important to check that the name you choose is available in the State of Florida. If you’re not ready to complete the PC formation process but know the name you want to use, it’s a good idea to reserve it before it is taken. You may also want to reserve your website domain name at the same time.
A registered agent is someone designated to receive legal notices and correspondence from Florida’s Department of State on behalf of your professional corporation. The person or business must have a physical address in the State of Florida and be available during business hours. This can get complicated if you choose someone within the business who may occasionally want to take a vacation or go on a coffee break. One easy way to fulfill your registered agent needs is to use ZenBusiness’s registered agent services and have one less thing to worry about.
Florida requires that any new corporation file Articles of Incorporation. This is the document that establishes the formation of your Florida professional corporation. You will be required to submit the following:
You can file Articles of Incorporation in Florida online using the Florida Division of Corporations website.
Documenting and keeping a permanent record of all important company decisions is important for compliance and auditing purposes for all Florida corporations. Your company’s records need to be stored somewhere safe. It’s a good idea to have both a physical and digital storage system.
You are required to name all initial directors and officers. These individuals will serve until new ones are appointed at the annual shareholders’ meeting. For a Florida professional corporation, all directors must share the same licensed profession.
Corporate bylaws are important to establish all rules of the business and the responsibilities of the shareholders. It’s preferable to create corporate bylaws for your Florida PC shortly after directors are chosen. Your corporate bylaws need to be specific to your business model and industry. There are several things that may be included:
Corporate bylaws are legally binding and can be changed only by shareholder vote. You may want to seek legal counsel when forming corporate bylaws, so you don’t miss any important pieces.
During the first board meeting, the board of directors will often vote to adopt the corporate bylaws and issue first shares of stock. Officers may also be elected at this time as well as a permanent board of directors.
Your Florida PC will need a federal tax identification number (EIN) to operate in the state. You can obtain this from the IRS for free. The big tax-related decision is whether you want your professional corporation to be taxed as a C corporation or S corporation.
Regardless of which corporation form you choose, your professional corporation will be subject to a corporate state income/franchise tax in Florida and any local taxes.
The type of licenses and permits your business needs are going to be very specific to your industry and location. Licenses may be federal, state, or local. For help with determining what licenses and permits your business needs, try ZenBusiness’s business license report.
Workers’ compensation is a requirement for most Florida businesses with employees. The details of workers’ compensation requirements are based on your industry, number of employees, and other factors. It’s also a good idea to have general liability insurance that is specific to your business.
It’s important to keep personal assets completely separate from business assets. This is really important when it comes to operating a Florida professional corporation. It’s a good idea to use the first shareholder meeting to determine which bank to use when opening a new business account.
The process of professional corporation formation can be complicated in some places and certainly takes time. It’s important to be thorough in all your decisions and document filings throughout the process to avoid future complications.
There are several forms that may need to be filed to complete the process for your professional corporation. You can find current fees on the Florida Department of State’s Division of Corporations website.
You’re not required to consult with an attorney to form a Florida professional corporation, but having guidance could certainly make the process easier.
Florida also allows professional limited liability companies, which are similar to Florida PCs but are structured more like a limited liability company, meaning they have more flexible tax and management options but not quite as much liability protection.
No. All shareholders in a Florida professional corporation must have the same professional licensing.
Your board of directors must decide whether you want to file as an S corporation or C corporation in Florida. It may be in your best interest to seek guidance from a professional accountant or business attorney to determine which is best for your business.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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