How to Form a Professional Corporation in Florida (2024 Guide)

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Forming a Professional Corporation in Florida

If you would like to start and learn how to form a corporation in Florida, there are a few things that you should do now. However, in a professional corporation, professionals must create a special organizational structure to establish a professional or service corporation. Among the appropriate professions to organize a professional corporation in Florida are accountants, physicians, engineers, architects, and attorneys.

Forming a professional corporation in Florida or any business organization needs a certain number of steps. In this article, Webinarcare Editorial Team is going to share those steps. Keep in mind that these are general procedures. Depending on local law, it may be modified. For instance, your professional corporation may be subject to city or county-based rules.

Form a Professional Corporation in Florida

What is a Professional Corporation in Florida?

A professional service corporation (PSC), often known as a professional corporation (abbreviated as PC), is a particular type of organization that is permitted by state law to allow owners of specifically licensed professions to practice in the Florida. A professional corporation’s owner is answerable for their own negligence or wrongdoing but is not held personally liable for the actions of other owners. The abbreviation PC or P.C. is frequently used to denote professional corporations.

This structure allows professionals to enjoy some of the benefits and protections of a traditional corporation while maintaining their professional status and abiding by the regulations of their respective licensing boards.

LegalZoom is the recommended corporation formation if you are thinking of forming a professional corporation from scratch. However, you can always start an LLC in Florida, if you changed your mind.

– WEBINARCARE EDITORIAL TEAM

How to Form a Professional Corporation in Florida

To form a Professional Corporation in Florida for the professional service you provide, you must follow a few steps that include verifying if you are qualified for a PC, naming your business, hiring a Registered Agent, filing the Articles of Incorporation, outlining an operating agreement, requesting for an EIN, opening a bank account, getting a business license, and filing for an Annual report and taxes.

Step 1: Verify If You Are Qualified for a Professional Corporation

In forming a professional corporation in Florida, you should know if you are qualified. There are specific professions that are allowed to form a professional service corporation, including-

To provide your service, you must be qualified and have a license. In most cases, you can now form a professional corporation after finishing your studies, passing the exam, and receiving your license. If you work in an industry that does not provide a license or professional certification, you should consider starting an LLC or corporation.

Step 2: Name your Professional Corporation in Florida

After you have decided to form a professional corporation in Florida, you must choose a name for your corporation. Here are some pointers to consider when naming your professional corporation.

  • The business name should have the word PC, frequently followed by the name of the principal owner in place of Inc or LLC. (Example. John Doe, MD, PC)
  • Limit of restricted words that need a license.
  • A unique name is needed with no match
  • No confusion with a government entity name.

In Florida, if you do not wish to file your professional corporation right away but want to hold the name that you have decided on, then you can reserve your corporation name for 120 days. You must file a name reservation application in the Florida Secretary of State to keep the name.

If not already present, a professional corporation, professional association, service corporation, or professional service corporation must be included in the name. You may register your business under a different legal name if your preferred legal name is unavailable. Once you’ve decided on a name, you can apply for Florida DBA (doing business as). This way, you can run a clinic or law firm under your name.

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Step 3: Choose the Florida Registered Agent

The next step in forming a professional corporation is hiring a Registered Agent, who accepts legal paperwork for your business. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Florida. Forming a professional corporation for your service will be easier if you have Registered Agent in Florida.

Alternatively, you can serve as your own Registered Agent if you have the time. Usually, in Florida, a Registered Agent costs is ranging from $50 – $150. To make it easier, you can hire Florida Registered Agent Services for your professional corporation.

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Step 4: File the Articles of Incorporation in Florida

After you hire a Registered Agent to form a professional corporation, the next step is to file the Florida Articles of Incorporation. In writing the Articles of Incorporation, the business name, owner’s contact information, corporation address, and Registered Agent contact information, should be written. Include the names of all co-owners as well. All owners must demonstrate that they have the necessary licenses to practice the profession in question.

Filing the Articles of Incorporation in Florida may be done with two ways, online and by mail. The Articles of Incorporation fee may vary from different state. However, in Florida, it costs $35 for filing in-person and by mail. Get the online form from Secretary of State, fill it up, and submit. Don’t refresh the page during the process. It will erase everything. . For offline filing, Send the form by mail to New Filing Section, Division of Corporations, P.O. Box 6327, Tallahassee, FL 32314.

Step 5: Write an Operating Agreement in Florida

An operating agreement in Florida is a document that contains all of your company’s organizational details. It is optional to draft an operating agreement in most states. Yet, having one as an internal document is strongly advised. The operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

Step 6: Designate the PC Board of Directors in Florida

The next step is to form the first board of directors for your PC in Florida. All of the initial directors must provide the owner with their contact information. The owner must keep records and submit them by the Florida Secretary of State. As a shareholder and owner, you must ensure that a provision for appointing a new director is included in the By-laws. In Florida, you must have Three directors in forming your Professional Corporation.

Step 7: Write the Corporate Bylaws

Now that you are done forming the team of the board of directors, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

Creating comprehensive corporate bylaws requires specific knowledge about the company, its structure, and operations. However, I can provide you with a general outline of what corporate bylaws usually include. It is crucial to consult with Florida Business Attorney or a legal expert to ensure that your bylaws comply with the laws and regulations governing your jurisdiction and industry.

  • Name and Purpose of the Corporation
  • Registered Office and Agent
  • Shareholders
  • Board of Directors
  • Officers
  • Committees
  • Indemnification and Insurance
  • Conflict of Interest
  • Records and Reports
  • Amendments
  • Miscellaneous

Step 8: Hold the First Board of Directors’ Meeting

Gather the board of directors for the first meeting after drafting the corporate bylaws. This meeting will conclude with the appointment of directors to manage the company’s daily operations, approval of the bylaws, selection of the corporation’s financial reporting year, and approval of the stock issue. Minutes should be taken at all board meetings and kept with the company’s records.

Step 9: Request an EIN in Florida.

After the operating agreement’s documentation, you should get or request an Employer Identification Number (EIN) in Florida. The tax ID for your professional corporation will be an EIN. The Internal Revenue Service can provide an EIN (IRS). It has nine digits and is comparable to a social security number. Nevertheless, EIN is different from SSN. Only business-related tasks, primarily filing general taxes, are performed using it. The form needs to be filled out and submitted online to the IRS.

The application of an EIN in Florida can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in several ways. It will give your professional corporation the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Step 10: Open a Bank Account and Prepare for Taxes.

You should open a business bank account as soon as you have applied for and received your Employer Identity Number because you will use this account for yourself, your clients, and your staff. Check out the Best Banks in Florida for you to decide on which bank you are going to open an account.

Due to your organization’s increased legality and liquidity, having a US business bank account may make conducting business in Florida easier. Most banks require an EIN for businesses other than sole proprietorships to open a business bank account. Also, keeping your accounts separate will prevent you from merging your personal and business finances. Also, filing taxes is simpler when you have an EIN. You can expect to pay employee and corporate taxes when you form a professional corporation.

Step 11: Get a Business License in Florida

Before your professional corporation operates in Florida, you must have Florida Business License first. A business license is a formal document issued by a state government agency that allows you to conduct business in the geographic area governed by that agency. The cost of business licenses and permits in Florida ranges from $50 – $300. You must check with the local authorities to see if any special licenses or permits are required.

Step 12: File Your Taxes in Florida

Finally, you’ve arrived at the final process. Remember to file your taxes when you have obtained a business license and are ready to begin operations. To avoid a large tax bill, you should begin paying taxes quarterly as soon as possible. Each state has different tax requirements. Start examining the Florida tax classification for the taxes that an LLC in Florida must pay.

Main Characteristics of a Professional Corporation

In forming a Professional Corporation, the main characteristics must be distinguished before forming it. These are the general characteristics of forming a Professional Corporation in Florida.

  • Limited Liability Protection: A professional corporation provides its owners, shareholders, or members limited liability protection like a regular corporation. This means the shareholders’ personal assets are generally protected from business debts, obligations, and lawsuits, except in malpractice or professional negligence cases.
  • Florida Licensing Requirements: All shareholders must typically be licensed professionals in the same field in a professional corporation. The corporation must also comply with specific state regulations and licensing requirements that govern the profession.
  • Governance and Management: A professional corporation is governed by a board of directors, who the shareholders elect. The board appoints officers to manage the day-to-day operations of the corporation. All directors and officers must be licensed professionals in the same field as the corporation.
  • Taxation: Professional corporations are taxed as C corporations, where the corporation pays taxes on its income, and shareholders pay taxes on dividends received from the corporation. However, some professional corporations may be eligible for S corporation status, allowing pass-through taxation. Income, losses, deductions, and credits flow to the shareholders, who report this information on their income tax returns.
  • Restrictions on Ownership and Transfer of Shares: Professional corporations often restrict the ownership and transfer of shares to ensure that only licensed professionals in the same field can become shareholders. This helps maintain the professional nature of the corporation and adheres to state licensing requirements.
  • Malpractice Liability: While a professional corporation provides limited liability protection for general business debts and obligations, it does not shield shareholders from liability for their own malpractice or professional negligence. Shareholders can still be personally liable for their actions in providing professional services.

In summary, a professional corporation is a specialized corporate structure designed for licensed professionals, offering limited liability protection and a formal governance structure while adhering to state licensing requirements and regulations.

Maintain Professional and Business License in Florida

You must maintain or renew your professional license regularly now that you have established your professional corporation. Even if your company is well-established, it is only meaningful if you have a valid operating license. And it makes no difference if your professional license is still valid for a year or two, but your business license has already expired.

Make time at least once a year to check the status of your licenses. You won’t miss anything important this way. You can address any issues that arise.

Filing Annual Report in Florida

In Florida, you must submit a report. The owners’ and Registered Agent’s names and contact details are listed in the Annual Report. Also, it should include all of your yearly financial activity. You must submit the report every 1 year (between 1st January and 1st May) in the Florida Secretary of State.

FAQs

What is a professional corporation in Florida?
A professional corporation, otherwise known as a PC, is a corporate entity that provides professional services in a specific field, such as medicine, law, or accounting.
How do I form a professional corporation in Florida?
To form a professional corporation in Florida, you must file Articles of Incorporation with the Florida Department of State.
Can a professional corporation in Florida offer services outside of its profession?
No, a professional corporation in Florida can only offer services within its specified profession.
Are there any limitations on who can form a professional corporation in Florida?
Yes, only licensed individuals within the specific profession can form a professional corporation in Florida.
Can a professional corporation operate under a different name in Florida?
Yes, a professional corporation can operate under a trade name, also known as a fictitious name, in Florida.
How long does it take to form a professional corporation in Florida?
It typically takes 5-10 business days for the Florida Department of State to process your Articles of Incorporation.
What are the annual filing requirements for a professional corporation in Florida?
A professional corporation in Florida must file an Annual Report with the Florida Department of State every year.
Are there any tax benefits to forming a professional corporation in Florida?
Forming a professional corporation in Florida may result in reduced tax liabilities and increased tax savings.
Can anyone be the registered agent for a professional corporation in Florida?
No, the registered agent for a professional corporation in Florida must be a Florida resident or an existing Florida business entity.
What documentation is required to form a professional corporation in Florida?
You will need to file Articles of Incorporation, a Florida Professional Corporation transmittal cover letter, and pay the filing fee.
How much does it cost to form a professional corporation in Florida?
The filing fee to form a professional corporation in Florida is $70, plus an additional fee for expedited processing.
Can a professional corporation in Florida have LLC members?
No, a professional corporation in Florida cannot have LLC members.
What is the liability protection for members of a professional corporation in Florida?
Members of a professional corporation in Florida are typically not personally liable for the corporation’s debts and obligations.
How many members are required to form a professional corporation in Florida?
A professional corporation in Florida requires at least one member.
Can a professional corporation in Florida have non-professional members?
No, a professional corporation in Florida can only have licensed professionals as members.
How does having a professional corporation in Florida affect my professional malpractice insurance?
Having a professional corporation in Florida may reduce your professional malpractice insurance premiums.
Do shareholders of a professional corporation in Florida have limited liability?
Yes, shareholders of a professional corporation in Florida have limited liability for the corporation’s debts and obligations.
What is the purpose of registering a professional corporation with the Florida Division of Corporations?
Registering a professional corporation with the Florida Division of Corporations is required by law and ensures legal recognition of the entity.
Is a professional corporation required to have a board of directors?
No, a professional corporation is not required to have a board of directors in Florida.
Can a professional corporation in Florida have a profit-sharing plan for employees?
Yes, a professional corporation in Florida can have a profit-sharing plan for employees.
How often must a professional corporation in Florida hold meetings?
The frequency of meetings for a professional corporation in Florida is determined by the corporation’s bylaws.
How can I check to see if a professional corporation is available in Florida?
You can search the Florida Department of State’s website to see if a professional corporation’s name is available for use.
Can I reserve a name for my professional corporation in Florida?
Yes, you can reserve a name for your professional corporation in Florida by filing a name reservation with the Florida Department of State.
Are there any ongoing reporting requirements for a professional corporation in Florida?
Yes, a professional corporation in Florida must file an Annual Report each year to maintain compliance.
Can an out-of-state corporation form a professional corporation in Florida?
Yes, an out-of-state corporation can form a professional corporation in Florida but must follow specific rules and regulations.
Can an individual be a member of multiple professional corporations in Florida?
Yes, an individual can be a member of multiple professional corporations in Florida, as long as they are licensed in the specific profession.
What happens if I don’t file an Annual Report for my professional corporation in Florida?
If a professional corporation in Florida does not file an Annual Report by the deadline, the entity may be subject to administrative dissolution.
Can I file my Articles of Incorporation for my professional corporation in Florida online?
Yes, you can file your Articles of Incorporation for your professional corporation in Florida online through the Florida Department of State’s website.
What is a professional corporation?
A professional corporation is a legal structure that is designed for licensed professionals, such as doctors, lawyers, and accountants, to incorporate their business.
Can I form a professional corporation in Florida?
Yes, you can form a professional corporation in Florida.
Do I need a professional license to form a professional corporation in Florida?
Yes, you need to have a professional license in the state of Florida to be able to form a professional corporation.
What professions are eligible to form a professional corporation in Florida?
In Florida, licensed professionals such as doctors, lawyers, accountants, architects, engineers, and other professions that require a professional license can form a professional corporation.
What are the advantages of forming a professional corporation in Florida?
The advantages of forming a professional corporation in Florida include
What are the disadvantages of forming a professional corporation in Florida?
The disadvantages of forming a professional corporation in Florida are that it requires more paperwork and formalities, increased liability protection can be more costly, and there may be requirements for owner qualifications and restrictions on ownership.
Do I need to file any other documents besides the articles of incorporation?
Yes, in Florida, professional corporations, as with all corporations, must also have by-laws.
Can I change the name of my professional corporation?
Yes, you can change the name of your professional corporation in Florida by filing the appropriate forms with the Florida Department of State.
Can I dissolve my professional corporation in Florida?
Yes, you can dissolve your professional corporation in Florida by filing the appropriate forms and paying the applicable fees with the Florida Department of State.
Do I need to renew my professional corporation license or registrations in Florida?
Once formed, a professional corporation in Florida requires annual reports that must be filed for the privilege to practice within the State.
Do I need a business license to operate my professional corporation in Florida?
Specific types of professions do not require a separate business occupation permit, as the licensing required for professionals verifying the business.
What is the Florida business license?
Florida does not have a unified state business license. Businesses typically register for various state or local licenses that may include
Can a professional corporation be taxed as an S corporation in Florida?
Yes, a professional corporation in Florida can be taxed as an S corporation if it meets the eligibility requirements.
Do I need to get a permit to operate my Florida-based professional corporation from my home?
In Florida, this may depend on where your home is located; certain neighborhoods strictly outlaw having an office/business. Some business owners can apply for a zoning permit known as a home occupation permit.
Do I need to have a registered agent for my Florida professional corporation?
Florida requires that corporations focus on appointing, through the Articles of Incorporation, their legal process agent/distributing each year.
How many shareholders can a professional corporation have in Florida?
Under state law requirements, there must be two or more shareholders for a Florida professional corporation.
Can my Florida professional corporation have a board of directors?
Yes, a professional corporation incorporated in Florida can have a board of directors, subject however to other possible regulations around some professional organizations.
Can professionals of different practice areas form a professional corporation together in Florida?
A Florida professional corporation can group different professionals, including differing practices/expertises, practitioners from incompatible specialties or practices departments may not be investing with each other.
Can out-of-state professionals form a professional corporation in Florida?
Out-of-state licensed professionals and qualify in Florida for licenses and be able to form a Florida professional corporation for their expertise or credentials shared.
Can my client buy ownership shares in my Florida professional corporation?
Under state laws, clients and “interested parties” cannot usually own stock in a professional corporation however, may act solely in an advisory capacity of some manner.
What are the costs associated with forming a professional corporation in Florida?
The estimated cost of forming a professional corporation in Florida ranges approximately at an expense about $175 to $800.
Can I form a professional limited liability company (PLLC) in Florida?
Yes, in Florida, professionals such as doctors, and attorneys who want a Limited Liability Company created on their name, with normal Florida licensing statutes, may form a professional LLC under certain conditions.
Can my Florida professional corporation conduct business in other states?
Yes, authorized and granted, Florida professional corporations are permitted to complete businesses in and around other states by qualifying and more regulations established.
What supporting documents do I need to form a professional corporation in Florida?
An associated declaration with Florida’s Division of Corporations draws up Articles of Incorporation publicly under turn filing grade all essential related certificates.
Can a professional corporation in Florida become a nonprofit corporation orientation?
However, forming a professional corporation differs as a commercial desire similarly, nonprofit Florida Corporation bears essentially relationship feasible albeit it allows responsibilities amidst stakeholders directed toward public welfare.
What annual taxes do my Florida professional corporation need to pay?
Once the professional corporation has record documented and launched, tax submission to Florida’s Department of Revenue surfaces for annual returns occurring every preceding fiscal year involved with collecting generated revenue and so forth.
What options do I have for creating a business structure after filing a Florida professional corporation?
Changing to a general corporation remains called for termination of the tangible self (Professional corp to C Corp). It necessarily needs indulging fundamental amendments via with official filings simultaneously permission issuing extended.
What are shareholder distributions?
Economic payment funded to shareholders simultaneously dividing up overdue financial retention net assets sitting in position.

Also Read

How to Save Money While Forming Florida Professional Corporation

One of the first steps in saving money on forming your Florida Professional Corporation is to do thorough research and planning. Before diving into the incorporation process, take the time to carefully review all the requirements and regulations specific to forming a professional corporation in Florida. By understanding the necessary steps and documentation needed, you can avoid costly mistakes and unnecessary fees down the road.

Another way to save money is to consider DIY options for various aspects of setting up your professional corporation. While it may be tempting to hire a lawyer or professional service to handle all the paperwork and legalities, many of the tasks can be completed on your own with a bit of time and effort. Utilizing online resources and templates can help you save on legal fees and keep more money in your pocket.

When it comes to filing fees and other costs associated with incorporating your professional corporation, it is essential to shop around and compare prices. Different service providers and filing options may vary in terms of cost and efficiency. By exploring all your options, you can find the most cost-effective solutions that fit your budget and needs.

Additionally, consider the long-term implications of your business structure when forming your professional corporation. While it may be tempting to cut corners and save money in the short term, investing in the right structure and setup from the beginning can save you money in the long run. Consulting with a tax advisor or financial planner can help you make informed decisions that benefit your bottom line.

Furthermore, networking and collaborating with other professionals can also help you save money while forming your Florida Professional Corporation. Building relationships with fellow entrepreneurs and industry experts can provide valuable insights and resources that can save you time and money during the incorporation process. By leveraging your network, you may be able to access discounts, referrals, and other cost-saving opportunities that can benefit your business.

In conclusion, while forming a Florida Professional Corporation can be a costly endeavor, there are several strategies you can implement to save money and streamline the process. By conducting thorough research, exploring DIY options, comparing filing fees, planning for the long term, and leveraging your network, you can effectively reduce costs and set your professional corporation up for success. With careful planning and smart decision-making, you can create a solid foundation for your business without breaking the bank.

Conclusion

In conclusion, forming a professional corporation in Florida is a strategic decision for licensed professionals who seek to combine their expertise and services under a single corporate entity. This business structure offers limited liability protection, a formal governance structure, and compliance with state licensing requirements. However, it also comes with certain restrictions on ownership, transfer of shares, and personal liability for professional malpractice. By carefully considering the advantages and disadvantages of a professional corporation, professionals can determine whether this structure aligns with their business goals, regulatory requirements, and risk management needs, ultimately contributing to a more organized, secure, and compliant professional practice.

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