Are you looking to form a Florida professional corporation, but you’re not familiar with the incorporation process?
Professional corporations are those owned and operated by licensed professionals, like doctors, lawyers, and architects. There are quite a few important steps you’ll need to take to create your Florida professional corporation and maintain it, so this guide will outline the rules and regulations involved with this process.
To get started, please reference our 11-step guide below or hire a professional online incorporation service like LegalZoom.
How to Form a Florida Professional Corporation (in 11 Steps)
Step One) Choose a Name
One of the most important aspects of the incorporation process is naming your business. There are three major elements to consider when choosing a name:
When naming a professional corporation in the state of Florida, you will need to include the words “professional service corporation” or the abbreviation “PSC.” Your professional corporation’s name also cannot include any words or abbreviations that indicate other business types, like the phrase “limited liability company” or the initials “LLC.” You also are not allowed to include words that refer to certain types of businesses (like “bank” or “law office”) unless your business fits those descriptions.
In addition to the legal considerations, you might want to identify your line of business or your mission in your company name. For example, you can display any closely held values in your name, like using the word “green” for environmentally friendly businesses.
A Name You’re Proud of
Keep in mind that this is your business, so you should choose a name that you’re proud of, and that you enjoy sharing with potential customers. You should also make sure it sounds good when spoken aloud, and also looks good when written down.
Check Whether Your Preferred Name is Available
Visit the Division of Corporations website to check whether it is already in use. If it’s not unique enough, you may need to tweak it or come up with a new name altogether.
Get Your Company URL
To solidify your brand and to fully embrace the company name, register your URL. You’ll be able to quickly build a company website so that nobody else can use it.
Step Two) Select a Registered Agent
Florida professional corporations must designate a person or business to receive legal notices on behalf of the company. This important point of contact is known as the registered agent. You will be required to list the registered agent’s name and address when filing the Articles of Incorporation in step four.
Who can be my registered agent?
A registered agent must have a physical address within the state of Florida where mail and legal notices can be served during regular business hours. You can hire a service to act as your registered agent, serve as your own registered agent, or even use an accountant or other business professional’s address – with their consent, of course.
The Florida Secretary of State says that,
The individual or legal entity that will accept service of process on behalf of the business entity is the registered agent. . .A business entity with an active Florida filing or registration may serve as a registered agent. . .An entity cannot serve as its own registered agent. However, an individual or principal associated with the business may serve as the registered agent. . .The registered agent must have a physical street address in Florida.”
We recommend hiring a professional service to act as your registered agent. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off the public record. For a list of the top 5 registered agent services, check out our guide.
Step Three) Complete Your Articles of Incorporation
This is THE document that formally registers your professional corporation with the state of Florida. Florida provides the option of filing your Articles of Incorporation online or by mailing in a paper form. Note that it’s important to include the specific purpose of your professional corporation in the Articles of Organization. Your registered agent will also need to sign the Articles of Incorporation.
Keep in mind that you are acting as the incorporator when you fill out and submit the Articles of Incorporation. You should sign as the incorporator before submitting the document.
|Cost to File||Filing fee of $35 plus a Designation of Registered Agent fee of $35|
|Time to Complete Filing||If filed online: 2-3 business days, or longer during peak periods. If filed by mail: 3-5 business days, or longer during peak periods.|
|Agency||Florida Department of State, Division of Corporations|
Department of State
|Agency contact info for filing questions||(850) 245-6052|
Step Four) Establish a Corporate Record
Professional corporations are required under Florida law to document and keep a permanent record of all important company decisions.
The official corporate record may be kept at the professional corporation’s principal place of business, or stored in a safe location elsewhere. You should take the opportunity to set up a secure digital or physical location for storing company records as soon as possible.
Step Five) Designate a Board of Directors
The incorporator is responsible for selecting initial director(s) of the professional corporation. The incorporator should record initial director appointments in a signed document and file it to the corporate record. This document is known as the “incorporator’s statement.” A sample incorporator’s statement can be found here.
The initial directors will serve until new directors are elected at an annual shareholder meeting, or as otherwise indicated in the bylaws. The incorporator may also serve as an initial director. Keep in mind that your directors must all share the same profession as the one the professional corporation was formed for.
Step Six) Create Corporate Bylaws
Corporate bylaws set out the rules and procedures for how the professional corporation will operate. Some important topics typically covered in the bylaws include:
- How shareholders will conduct votes
- The total number of directors and how each director will be elected
- How often the board of directors will meet
- The types of officer roles that will be appointed
- Procedures for resolving internal disputes
All Florida corporations are required to adopt bylaws.
Bylaws help your business run smoothly, and are sometimes required by financial institutions for opening business bank accounts or acquiring loans.
Either the incorporator or the initial directors may prepare the company bylaws. The bylaws should be recorded in an internal company document, signed by the incorporator or a director, and filed to the corporate record. The bylaws are not filed with the state of Florida.
Popular Strategies for Preparing Bylaws:
- Use a free online template. Northwest Registered Agent has a great free template you can download.
- Hire a lawyer to draft the bylaws. If your business has investors, is already profitable, or has multiple co-owners, we strongly encourage you to hire a lawyer experienced in Florida corporate law to help you draft suitable bylaws. Look through Avvo’s directory of KY attorneys you can work with.
Step Seven) Hold First Board Meeting
After designating a board of directors and preparing bylaws, the new professional corporation should call for an initial board meeting. The incorporator often arranges and attends this first meeting. During the first board meeting, the initial directors should plan to cover the following topics:
- Review and approve corporate bylaws
- Designate officers to manage day-to-day business affairs
- Choose a bank
- Approve issuance of stock certificates
- Determine whether the company should elect to be taxed as a C corporation or S corporation (see step nine for more details)
Recording Meeting Minutes: a detailed record of all key discussions and decisions during the board meeting should be prepared and distributed to all board members for their review and approval. This record is known as the “minutes.” A copy of the minutes should be sent to each director for review and filed in the company record.
Step Eight) Handle Tax Obligations
You’ll need a federal tax ID number (EIN) to operate a professional corporation in Florida. You can obtain your EIN from the IRS for free, and it’s a fairly painless and simple process. An EIN enables your professional corporation to hire employees, file corporate taxes, open business bank accounts, and more.
A major decision for any professional corporation is determining whether to be taxed as a C corporation or an S corporation. Take a look at how these two formats differ:
- C Corp: The majority of professional corporations are C corporations, as they are subject to far fewer restrictions than S corps. With a C corp, profits are taxed at the corporate level, and again on the personal tax returns of the shareholders, resulting in what’s commonly referred to as double taxation.
- S Corp: This is only an option if your professional corporation has fewer than 100 shareholders, only issues one class of stock, is not owned by another business entity, and does not have any foreign shareholders. If your corporation meets these requirements, you can select the S corp’s pass-through taxation which eliminates the double taxation issue of C corps. S corp dividends are not taxable.
Your professional corporation will be subject to a corporate income/franchise tax for the privilege of doing business in Florida. The Florida Department of Revenue website includes information on the corporate income/franchise tax and other taxes, such as sales & use tax, that may apply to your professional corporation. You can file and pay taxes and access a number of other online services on the Florida Department of Revenue’s website.
The city and/or county in which your professional corporation is located may also impose additional taxes. You should check with your local tax authorities for more information. The four largest cities in Florida maintain resources for businesses on their websites:
Step Nine) Obtain Business Licenses and Permits
The Florida Department of Business and Professional Regulation issues licenses for a number of businesses and professions. You can visit their website for further information about the businesses and professions they license and regulate and how to apply for a license.
A city and/or county occupational license may also be required for your professional corporation. You should check with your city and county to confirm any additional licensing or registration requirements.
Step Ten) Acquire Insurance
Florida businesses are required to acquire workers’ compensation insurance for their employees. The details of this requirement vary based on industry, number of employees, and the organization of your business. See the Division of Workers’ Compensation’s website to learn more about the workers’ compensation insurance requirements that apply to your professional corporation.
In addition, you should also pursue general liability insurance and other more industry-specific types of insurance. Because professional corporations are specialized businesses, you will most likely require insurance policies based on your occupation.
Step Eleven) Open a Business Bank Account
To operate a professional corporation and receive the limited liability protection that comes with it, you have to keep your personal assets entirely separate from your business assets. Due to this requirement, it’s strongly advised that you acquire a business bank account for your corporation.
Get Help Forming a Professional Corporation
The process of forming a professional corporation in any state can be a lengthy one. If you run into any trouble along the way, remember that there are plenty of organizations that can help you navigate the incorporation process.
Online Incorporation Services
If you would like to hire an affordable business incorporation service to create your professional corporation for you, services like LegalZoom and MyCorporation can help you out. These service providers can handle most of the formation process, while still charging much lower rates than a business attorney’s fees.
There isn’t the same level of personalization that a lawyer can provide, but online incorporation services can still be a tremendous help. The only major issue with these service providers is the fact that they can’t provide any actual legal advice, so you need to know what you want ahead of time.
Florida Business Attorney
There are some situations where hiring a business lawyer is a preferable route to using an online incorporation service. The professional corporation as a business structure can be highly complicated and specialized, and if you want to have the peace of mind that every single step was taken care of by a true expert, hiring a business attorney to form your Florida professional corporation is the way to go.
If you would like to pursue this route, there are some convenient services that can help you choose the right lawyer for your business. We like to use Avvo, which has extensive reviews and ratings for hundreds of Florida business lawyers, which can make it much easier to select an attorney who has your best interests in mind, and also has the expertise to get the job done right.
If you need further assistance with your professional corporation, the Florida Small Business Development Center Network provides no-cost consulting, online and in-person training, and business research at numerous locations across the state.