Benefits of a corporation
A corporation offers limited liability protection, which means that you are not personally liable for the corporation’s debts and obligations. Forming a corporation also offers protection if someone sues your business partner or employee. Corporations have many other benefits, including tax benefits and the ability to easily transfer shares from one owner to another.
Requirements for incorporating in Florida
Preparing your articles of incorporation
To form a corporation in Florida, you need to file a form called articles of incorporation with the Florida Department of State and pay a filing fee. The corporation’s existence begins as soon as you file the articles of incorporation, unless the articles specify a later date. Many things may be included in the articles of incorporation, but, at a minimum, they must contain the following:
- Name of the corporation
- Street address of the principal place of business
- Corporate purpose
- Details on the corporation’s stock structure
- Registered agent
- Names and addresses of incorporators
A corporation can have different types of stock, called classes or series. These types of stocks can have different advantages, for example one can offer voting rights while another may not. Regarding the stock structure, your articles of incorporation must state the following:
- If there is only one class of stock, the articles of incorporation must state the number of shares authorized.
- If there is more than one class of stock, the articles must provide a designation for each class and specify the number of shares, preferences, limitations and rights for that class.
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Naming your corporation
You can conduct a preliminary search on the Department of State’s website to see if your proposed company name is available. You cannot reserve a name in advance. Your corporate name must meet the following requirements:
- The name of a Florida corporation must include the words “corporation,” “incorporated” or “company,” or the abbreviations “corp.,” “inc.” or “co.”
- A corporation’s name must be distinguishable from all other legal entity names on file with the Department of State.
An incorporator prepares, signs, and files the articles of incorporation. The incorporators’ names and addresses must be listed in the articles of incorporation.
One or more persons can act as incorporators. Florida does not have any eligibility requirements for incorporators.
Incorporators must hold an organizational meeting after the articles of incorporation are filed, unless the articles name the corporation’s initial directors. At the meeting, the incorporators elect directors and may also appoint officers and adopt bylaws. The incorporators have no other responsibilities.
Corporate directors are responsible for managing the corporation and setting corporate policies. Directors have a fiduciary duty to the corporation, which means they must act in good faith and place the interests of the corporation ahead of their personal interests.
Unlike with incorporators, Florida does have requirements for specifying directors:
- There must be at least one director. Your corporation can have as many directors as it wants.
- Directors must be individuals who are 18 or older.
- Directors do not have to be Florida residents or shareholders.
The articles of incorporation or bylaws can impose additional eligibility requirements.
Specifying a registered agent and registered office
A registered agent is a person or entity that the corporation designates to receive legal documents and forward them to the corporation. A registered office is the registered agent’s business address. Both a registered agent and the agent’s office are required when completing your articles of incorporation.
When specifying your registered agent, you must adhere to the following requirements:
- The registered agent must have a street address in Florida and must sign the articles of incorporation agreeing to serve as agent.
- A registered agent can be either a person or a corporation that was formed in Florida or is authorized to do business in Florida.
- The registered office address must be in Florida and must be identical to the registered agent’s business address. Your corporation’s registered office may be the same as its place of business.
Stating a corporate purpose
The articles of incorporation can include a broad, general statement of your corporation’s purpose, which allows flexibility should your corporation’s purpose change in the future. For example, Florida’s online filing form allows you to state your purpose as “for any and all lawful business.”
Determining incorporation bylaws
Bylaws are a corporation’s internal roadmap for the way it will be governed and the operating procedures it will follow. Bylaws can include any provisions for managing the affairs and regulating the business of the corporation.
Although bylaws are not required for incorporation, the directors or incorporators must adopt bylaws unless the articles of incorporation give that power to the shareholders. Bylaws are not filed with the Department of State but must be kept at your place of business.
Bylaws must be consistent with Florida law and the business’s articles of incorporation.
Costs of incorporating in Florida
The Florida Department of State requires a fee when filing articles of incorporation and designating a registered agent. Corporations are also required to pay state and federal income taxes.
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