Florida C Corporations
Are you ready to start a C-Corp in the state of Florida? Although you may think you are, it is important to have all the facts not only about C Corporations, but also about how to incorporate them as well. C-Corporations are the most common corporations, so they are often referred to as standard corporations. Here, we have provided the steps you will need to take in order to form a c corporation in Florida.
The Steps below can help you learn how to form a Florida C-Corp:
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2: Via your state department
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What Is a C Corporation?
A C Corporation is the more traditional type of corporation, often referred to as a standard corporation. Rather than having a "pass through" tax system like an S Corporation, C Corporations are taxed twice on their earnings, once when the profits are initially earned and then again when shareholder dividends are distributed. Although this is a downfall, it is one of the only ones. C Corporations allow for more than one class of stock, and they also have a very specific structure of individuals that all have a stake in the company. This group includes directors, officers and shareholders. C Corporations are much more beneficial for larger companies, while small businesses often find S Corporations to be more fitting for their business-type.
Benefits of a C Corporation
There are many benefits to opening your business as a C Corporation. Some of these corporation advantages are listed below:
- Business Expenses are Tax Deductible – Since C Corporations are already subject to double-taxation, they enjoy other tax advantages such as being able to deduct business expenses that other types of corporations and businesses may not be able to deduct.
- Extreme Growth Potential – Since stock associated with C Corporations can be sold freely, there is unlimited potential growth for these types of corporations.
- Allows for Unlimited Shareholders and Different Stock Types – While an S Corporation will only allow for one class of stock and no more than 100 shareholders, C Corporations are not bound by these rules. C Corporations can have multiple stock types and an unlimited amount of shareholders.
- Protections from Various Liability Issues – C Corporations have very limited liability for directors, shareholders, employees and officers of the corporation.
Disadvantages of a C Corporation
As with every type of business, there are always at least a few disadvantages that give people pause. Here are a few of the corporation disadvantages to setting up your business as a C Corporation:
- Double Taxation – This is obviously the largest drawback. C Corporations are taxed on their initial profits, and then taxed again when shareholder dividends are distributed.
- No Deduction of Corporate Losses – Another disadvantage is the fact that shareholders are not able to deduct corporate losses on their taxes, while shareholders in an S Corporation can. If you feel that maybe an S Corporation fits your business ideals in a more profitable way, then you will want to invest in our License Checklist & Forms Packet for S Corporations.
Qualifications Needed to Open a C Corporation
To start a C Corporation, the requirements are far less difficult to meet than if you were starting an S Corporation. Below are the main requirements for starting a C Corporation:
- There must be regular meetings held between the board of directors and shareholders
- Initial shareholders must receive a formal issue of their stocks.
- There must be enough capital present through investors to prove adequacy of the corporation's continued funding.
- Business records must be meticulously kept and be separate from the individual records of the owners.
How to Form a C Corporation
- First, you will need to contact the Comptroller Public Accounts' office located in the state that you will primarily run the business from. They will provide you with the proper forms needed to start a C Corporation.
- Second, find out about what the filing fees are for your specific state. There will most likely be a fee for your Articles of Incorporation.
- Third, start working out the logistics or incorporating your business. What will be the name of your corporation? What are some back-up options if that name is already taken? Who else will be in charge in your absence? Do you plan to publicly trade stock? Be sure to keep these questions in mind and get as many of them answered as possible before moving forward.
- Fourth, set up a system of taking the minutes at board meetings. These records are required to be filed and available onsite as part of all official records for the corporation.
- Finally, be sure to create a very clear and comprehensive set of bylaws for the corporation. There may also be additional forms that need to be filed, such as a financial report, in certain states, so be sure to understand what your individual state requires.
Although forming any business is always a bit of a tedious process, there are five main steps to starting a C Corporation that can help prepare you for the road ahead:
- Is it necessary to hire an attorney to start a C Corporation?
- Why should I choose a C-Corp over an S-Corp?
- Does it matter where I incorporate my C Corporation?
- Do I need a certain amount of directors to form a C Corporation?
- What is the first step in the incorporation process?
While it is by no means necessary, it is highly recommended. C-Corps require a great deal of paperwork not only to get started, but to also continue functioning. One of the most difficult aspects of a C-Corp to get right is the Articles of Incorporation, which will help form the corporate charter. Having an attorney to help you file this paper work will prove well worth any fees you may incur. The stress from incorrectly filing this paperwork can be insurmountable without an attorney.
Corporations come in two main forms: C-Corps and S-Corps. When you want to form a corporation, knowing the difference between the two is vital. A C Corporation allows for a larger business to form. If the business you are starting is already proving to be a big fish in a small pond, then a C-Corp is probably best. This will allow for various classifications of stocks, and more than 100 shareholders. The downfall is that C-Corps are subject to double-taxation, but this is only a downfall if you plan to sell only one classification of stock to less than 100 (this number fluctuates, so be sure of the rule in your particular city) shareholders. Otherwise, a C-Corp will be most beneficial for your business structure.
Unfortunately, yes, but mostly in the sense of whether you incorporate foreign or domestically. If you form your corporation outside of the United States, then there are more forms to be filled out to transfer it to the United States. When the formation of a corporation takes place in the United States, then it is much simpler to transfer franchises to other states and continue to expand your business.
Every state will be a little different and they will all change the rules from time to time. However, it is typically required for C Corporations to have at least one director. Most have more.
Once you are positive that you want to form a Corporation, and that you want it to be a C Corporation, purchasing our License Checklist & Forms Packet is the best first step. You will find all the necessary forms, information and contact information needed to take you on this journey of registering a corporation.
To learn more, download the new Business License Checklist & Forms Packet to assist you with the Florida Limited Partnership process, as well as offer you helpful information on popular Limited Partnership topics.