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Benefits of Forming a Florida Corporation
According to the State of Florida Division of Corporations, Florida generally leads the nation in new business formation. The State of Florida Division of Corporations speculates that this is because of the many advantages Florida Corporations have that corporations in other states do not have. Benefits to Florida State corporations include Florida's low tax rates, a skilled and relatively cheap work force, and easy access to many foreign markets.
Advantages to Incorporating in Florida
The single greatest reason for forming a Florida corporation is that incorporation provides you with limited liability. Limited liability shields the shareholders and company principals of Florida corporations from personal liability in almost all cases. For example, if Florida State corporations are indebted, creditors will not be able to attempt to collect from the shareholders and principals of these Florida corporations.
Florida corporations also have a continuous life. Florida corporations continue regardless of changes in ownership. Shareholders of Florida corporations can and probably will change often, but the continuation of Florida State corporations will not be affected by this change.
Professional Appearance and Corporate Formalities
Forming a Florida corporation will provide your business with a more professional appearance. Florida corporations can proudly display their Inc. initials after their name, illustrating their official stamp of approval from the State of Florida Division of Corporations. Forming a Florida corporation may also help you obtain bank loans. In addition, corporate formalities that are required for all Florida State corporations, such as the need to hold director and shareholder meetings and to appoint officers, may also help you to run your business more efficiently.
Tax Advantages of Florida Corporations
Florida State corporations can deduct certain expenses from their reportable income. These deductions can include salaries and contributions to benefit plans, such as retirement and health plans. Different corporate entities, such as a Florida S corporation, have different rules for deductions. Consequently, you must choose your corporate entity, according to the type of expenses you think your business will have. For most people, the biggest choice is whether to form a Florida S Corporation or instead form LLC Florida.
Raising Investment Money for Florida Corporations
Forming a Florida corporation will also help you to raise money from outside investors for your business. This is because Florida State corporations' shares are easily transferable, so all Florida corporations can easily sell shares in exchange for the investment.
Benefits for Employees of Florida State Corporations
Another reason for incorporating in Florida is that Florida corporations are structured to accommodate employees. If you are incorporated, you can adopt various employee benefit plans, such as stock option plans. You can also deduct certain contributions to employee health and disability benefit plans.
Low filing fees for Florida Corporations
The Florida Department of Corporations recently cut the already low filing fees by 25%. Incorporating in Florida is very cheap compared to other states, which are not as pro-business as the State of Florida Division of Corporations. Most Florida state corporations pay just $70 of Filing fees to the Florida Department of Corporations.
For-profit Florida state corporations need only 1 director
The Florida Department of Corporations only requires 1 director, so the same person can be a Director, the President, Treasurer and Secretary. Many other states require more than one director and require that all of the officers be different people.
No records of stock ownership for Florida corporations
The State of Florida Division of Corporations does not keep records of who owns stock in a Florida corporation.
No minimum capital requirement for Florida corporations
Several states require that a corporation be capitalized with at least $1,000. The Florida Department of Corporations does not have any capital requirements for incorporating in Florida.
Florida corporations can undertake all lawful activities
The State of Florida Division of Corporations allows corporations (other than licensed professionals (eg. Lawyers, doctors)) to perform all lawful business activities.
As you can see from this article, there are several advantages to forming a Florida corporation, including the pro-business atmosphere created by the State of Florida Division of Corporations.
Although most corporations around the nation share similar characteristics to Florida corporations, there are certain differences. Thus this site, Florida Corporations Online, always discusses forming a Florida corporation and focuses upon Florida State corporations. The State of Florida division of corporations is an excellent source for more information.
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