It seems that so many people are packing up from other states and relocating to Florida. Many are retirees. Many are people fed up with the cold and the expense of living where it’s cold. Once in Florida, how are these people going to earn a living. Some may want to start their own business. There is more to starting a business that advertising what you have to offer. You have to register your business with the State of Florida. You are going to have to figure out what type of business you are going to have. There are 3 basic types.
There are corporations. There are two types of corporations, C and S. In Florida, when a company is incorporated it is considered a C corporation. You don’t need to do anything else and your company will always continue to be a C corporation. To become an S corporation will require filing a form with the IRS for a different tax classification. The tax configuration is the difference between the two. A C corporation is a separate identity than its shareholders. The corporation is taxed on its profits and then the shareholders are taxed on the dividends they are issued by the corporation. This is essentially a double taxation situation. An S corporation avoids that double taxation. The corporation does not file income taxes, but the shareholders pay taxes on the dividends they receive. I’m thinking the S corporation is the way to go.
Another type of business is a limited liability business or an LLC. These LLCs are also taxed like an S corporation. The individuals are taxed, not the company. LLCs have more flexibility in how the business is structured. And LLCs can have subsidiaries where an S corporation cannot. LLCs have a disadvantage in the amount of startup and ongoing fees. There also isn’t a lot of case law dealing with LLCs due to being a relatively new type of business.
The last type of business is a DBA business. DBA stands for Doing Business As. A business formed as a DBA can claim a name as its own that other similar businesses can not use. The name of the business does not have to have the owner’s name associated with it. If Jeff Burns wanted to open a donut shop, he wouldn’t have to have his name appear anywhere. He could call it Dipping Donuts. And if he wanted to open several donut shops in nearby towns they could all have different names.
Always register your business, no matter what type you are operating as. These business legalities may be confusing so don’t hesitate to check with a business lawyer when things don’t make sense.
