How much does it cost to start a business in Florida? Here's a guide

Lianna Norman, USA TODAY NETWORK - Florida
·5 min read

WalletHub just released a study that named Florida the third-best state in the country for those who want to start a business this year.

“Florida’s working-age population (age 16-64) is growing much faster than in other states…” the study said. “Florida also has more entrepreneurs and startup firms relative to its population than most other states.”

But starting a business and keeping it open can be risky, difficult and expensive. If you’re a first-time entrepreneur in Florida, there are some things to consider.

Here’s a quick breakdown of what it takes to start a business in Florida, how much it costs and what makes Florida a good place to start.

How much does it cost to start a business in Florida?

There is a lower tax burden in Florida than in other states, which is one of the contributing factors to what makes the Sunshine State a great place for entrepreneurs.

Florida has a low tax rate for corporations – around 5.5%, according to LegalZoom – and has a low income tax, making the state very small business-friendly.

But opening a business and keeping it running still means incurring the initial and annual fees that come with legally owning and operating a business.

And it starts with what kind of business you’re choosing to start: a corporation, a Limited Liability Company (LLC), a partnership or a sole proprietorship.

Anyone looking to start an LLC in Florida has to file articles of organization with the Florida Division of Corporations. Initial fees for the articles of organization are $100 and there is a mandatory registration fee that costs $25, totalling to a starting price of $125 for an LLC in Florida. You can find the cost of annual fees to keep your LLC in good standing each year and a list of fees attached to optional LLC amendments on the the Florida Division of Corporations’ website.

Filing the paperwork necessary to start a corporation in Florida is a little cheaper, ranging from $70 to almost $90, depending on if you opt-in to receive a certified copy of the paperwork and a certificate of status. If you want to familiarize yourself with other fees related to owning a corporation in Florida, click here.

Is it better to have an LLC or corporation in Florida?

Which business structure will work best for you depends on what kind of business you’re planning to open.

Here are the different types of business entities you can open in Florida and what they are, according to the Florida Division of Corporations:

  • Corporation:

    • A corporation is an independent legal entity that exists separately from the people who own, control and manage it.

    • It does not dissolve when its owners (or shareholders) die because it is considered a separate “person.”

    • A corporation can enter into contracts, pay taxes, transact business, etc.

    • The owners have limited liability.

  • Limited Liability Company (LLC):

    • A limited liability company (LLC) is similar to a corporation, but with slight differences.

    • Like a corporation, it offers limited personal liability.

    • An LLC is not required to hold regular stockholder or management meetings, and there are no requirements to comply with other corporate formalities.

  • Partnership:

    • A partnership exists when two or more persons co-own a business and share in the profits and losses of the business.

    • Each of the co-owners or partners contribute something, usually money or real property, to the business endeavor.

  • General partnership: 

    • The rights and responsibilities are divided equally among the partners. The partners are referred to as general partners because each partner can act on behalf of all the partners, and each partner is responsible for the partnership’s debts and obligations.

  • Limited partnership:

    • A partnership composed of both general and limited partners.

    • This type of partnership allows each partner to determine and/or limit his or her personal liability.

    • Unlike general partners, limited partners are not responsible for the partnership’s actions, debts and obligations.

    • General partners have the right to manage the business. Limited partners do not.

    • Both general and limited partners benefit from the business’s profits.

  • Sole proprietorship:

    • A sole proprietorship is the simplest and most common structure chosen to start a business.

    • It is an unincorporated business owned and operated by one individual with no distinction between the business and the owner.

    • Sole proprietorships, when not operating under the owner’s legal name, must register a fictitious name with the Division of Corporations.

The Florida Division of corporations recommends contacting an attorney or an accountant to decide which structure works best for you.

What is the first thing I need to do to start a business?

If all of this sounds like jargon to you, you might need to hone your business plan first. If you don’t have certifications for something specific, like working in a salon or barber shop, start with market research.

If you know you want to open a business in a particular industry, but don’t know what product or services you’d like to sell, researching the projections, trends and current state of that industry can help you narrow it down.

After you’ve conducted market research and decided exactly what services or goods you want to sell, then it’s time for you to choose your business structure and plan for those costs.

If starting a business still seems like a vague or impossible goal to reach from where you’re at, USA TODAY has a guide to starting a business that breaks down each step and lays out a checklist for creating a business plan.

This article originally appeared on Treasure Coast Newspapers: How to start a Florida business, register an LLC or corporation