Updated January 19, 2021
If you have decided to start your business in Miami, congratulations! That decision is a HUGE step, but now comes action! So, where do you begin? Starthub is a leader in Miami helping entrepreneurs, small businesses, and international businesses start up and grow. So, no need to search hundreds of websites. Here is your comprehensive Checklist for Starting your Miami Business today!
Miami is an Ideal Location for Starting Your Business
Before we jump in to the steps you will need to take, let’s just take a moment to see why Miami is the best start-up or expansion location.
WalletHub’s The Best Large Cities to Start a Business In ranks Miami, Florida as #3 overall! WalletHub conducted a survey in 100 cities in the U.S. and compared them based on 1. business environment, 2. access to resources and 3. business costs. Out of 100 cities, Miami, Florida was #3 Overall on the list. Here are some other important Miami rankings from the study:
- #1 in terms of the most startups per 100,000 residents
- #2 for Business Environment
- #5 for Lowest Labor Costs
Read more about all of the business benefits that come with Miami. These benefits include a massive potential customer base, prime your business for international expansion, tax advantages, and innovative business solutions.
You can start in Miami today from wherever you are!
These times are still a bit uncertain, but we can see the light at the end of the tunnel. So while, you may not be ready to physically move or open your business in Miami, you can still start it there remotely. You can enjoy the growth benefits of expanding to Miami without having to move there right away – or ever. And you don’t need to lease an office space. You can expand to Miami flexibly and affordably with a Virtual Office.
What is a Virtual Office?
A virtual office provides you with a digital platform from which to conduct operations remotely, but also gives your business a physical business address and presence in a desired location. But it’s not just a street address; virtual offices offer a range of services to help your business run efficiently from wherever you are! To find out more about what a Virtual Office can offer you, Click Here.
Ultimate Checklist for Starting your Miami Business Steps to Start & Run a Business from Home
Here 9 Steps to starting your business at home. For the complete guide to Starting your Small Business, simply Download our (Free) Small Business Guide.
Step 1: Choose your business structure
The business structure that you choose will determine how your company operates. It will also determine your legal liability, certain taxes, and what rules and regulations you must adhere to. Choosing the right structure is therefore extremely important. There are many different types of business structures. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation.
A Florida LLC (limited-liability corporation)
What is an LLC? An LLC, or limited-liability corporation, is a legal entity that is composed of “members” who own and operate the company. The members are bound by a signed agreement rather than by the ownership of stocks or grant options. An LLC is often called a “hybrid structure”. It gives members the personal liability protection of a corporation so that your personal assets are not affected by company debt. But it also provides the pass-through taxation benefits available to a partnership. This means that the company itself is not taxed. Instead, taxes are passed down to the members and applied to their personal income taxes. This is why the majority of small and new businesses in Florida start as an LLC.
LLCs are regulated based on state statutes, so the rules and requirements may vary based on which state your LLC is organized under. For our purposes, we are discussing the Florida statutes. Let’s take a look at the advantages and disadvantages of choosing an LLC structure:
Advantages of an LLC
- Members have liability protection for their personal assets against company debts or lawsuits.
- There are no restrictions on membership; an LLC can have as many members as desired, and they can be individuals, corporations, or foreign residents. This is particularly enticing for foreign residents.
- Pass-through taxation prevents the “double taxation” that occurs in a Corporation.
- An LLC provides flexibility in tax structure, profit distribution, and management structures.
Disadvantages of an LLC
- An LLC cannot benefit from the sale of company stock.
- In order to be eligible for the partnership taxation structure, an LLC must have at least two members; single-member LLCs are allowed, but they are taxed as a sole proprietorship.
- Members of an LLC are subject to the self-employed taxation rate and may incur high social security and Medicaid costs.
There are higher filing and administrative fees for an LLC than for other business structures.
Before we proceed further, we should note that not all businesses are allowed to operate as an LLC. Companies such as banks, financial trusts, and insurance agencies are typically barred from filing as an LLC. Some industries are also regulated differently by each state. Visit your state’s business resource center to see which businesses are eligible to file as an LLC.
What is a C-Corporation?
A C-Corporation is a corporate structure that legally separates the assets of a company from those of its owners. They are the most common type of corporation. The owners of a c-corporation are known as shareholders. Their ownership in the company is based on the amount of company stock that they own. Shareholders are required to elect a board of directors in a public forum each year to govern and operate the company.
This type of structure provides a great deal of liability protection for the owners. It also creates unlimited growth potential through the ability to sell stock. But it creates a double-taxation dilemma: company earnings are taxed prior to distribution, and the dividends received by the shareholders are taxed again at the personal income level.
The majority of C-Corporations in Florida are large companies with 8-figure profit scales.
Here are the advantages and disadvantages of a Florida C-Corporation:
Advantages of a C-Corporation
- The ability to sell stock allows companies to maximize profits and retain shareholders.
- Corporations are more enticing to investors.
- Shareholders are given more liability protection for their personal assets.
- The ability to write-off business expenses as tax deductions (healthcare benefits, office equipment, etc.).
Disadvantages of a C-Corporation
- Profits are double-taxed at the corporate and personal tax levels.
- Corporations are subject to a 5.5% corporate income tax in Florida.
- Required to follow a strict, regulated management structure.
- Corporations must have enough capital from investors to issue initial stock certificates when incorporated.
As you can see, the two types of business structures available share the benefit of liability protection but are otherwise very different. Because of its easier set-up, flexible structure, and impressive taxation benefits we recommend an LLC for your small or new business. We will be discussing how to start an LLC in Florida in the following steps.
Step 2: Choose a Name For Your Business
Now that you’ve selected your company structure, it is time to choose a legal name for your business. Your name is one of the most defining characteristics of your company, so be sure to choose one thoughtfully.
The state of Florida requires that your LLC name is unique – it cannot be used by any other operating company in the state. So once you have settled on a company name, visit Sunbiz – the Florida Department of State naming tool – to run a comprehensive name search. This website also lets you search existing Florida businesses through several search tools to make sure you aren’t infringing on naming rights. If your desired name is already taken, you won’t be able to use it.
There are also a number of other naming regulations imposed by the state. See below for a list of the Department of State naming guidelines.
- Full company name must end in “LLC”
- Your company name cannot be identical or similar to a currently operating business in the state of Florida
- Company name cannot be such that it would be confused with a state organization (FBI, State Department, Florida Treasury, etc.)
- There may be additional regulations and/or paperwork if your company name includes “restricted words” such as Bank, Attorney, Doctors, etc
Florida Fictitious or “Do Business As” Names
You may choose to do business under a different name than your legal company name. For example, your LLC may be organized as an umbrella company under the name “Storm LLC”, but you operate a chain of companies in the state called “Rain Gutter Systems”. In this case, the state of Florida requires that you submit a fictitious name application. This website has a complete list of guidelines for submitting your fictitious name to the Department of State.
Once you’ve settled on a company name that meets all of the state requirements and completed your naming search, you’re ready to register your name with the state. This is done when you file your Articles of Organization with the state department, which we’ll cover more in-depth in Step 4.
It is important to note that you should not assume that your business name is approved until you receive an acknowledgment from the Department of State.
Step 3: Designate A Registered Agent
A Registered Agent is required to file your company with the Department of State. A Registered Agent is an individual or entity formally responsible for receiving legal and State correspondence for your company. For example, subpoenas or renewal notices.
Requirements for a Registered Agent
There are certain rules that you must follow when designating a Registered Agent. They include:
- The Registered Agent must reside in Florida (if they are an individual) or be able to conduct business in Florida (if they are a business).
- They must have a physical address in Florida at which to receive your mail. They cannot have a P.O. Box, as many documents are certified and require signatures.
- The Registered Agent must be available during normal business hours to receive and sign for your mail
When you have designated a Registered Agent, you must submit your choice to the Department of State when you file your Articles of Organization. There is a $25 filing fee to designate a Registered Agent.
For a list of frequently asked questions and answers, simply Click Here to get the Full GUIDE.
Right before this Step 3 is where it is suggested to start a Virtual Office! A Virtual Office will give you a Physical Address AND a Registered Agent, so read below for more on this!
Step 4: File Your Articles of Organization
To legally register your business with the Florida Department of State, you must file your company Articles of Organization with the Division of Corporations. This document outlines basic facts about your company and details how your company will be organized and managed. You may file online at Sunbiz or print the application and mail it to the State Department with your filing fees.
What you Need
These are the required fields when filing your Articles of Organization:
- Company name
- Primary business address
- Company mailing address, if different than above
- Registered Agent name, address, and legal signature
- Company purpose (if you are filing a professional company) » A valid e-mail address
- Legal signature
The following fields are optional depending on your company status:
- The names and addresses of your managers and/or authorized representatives.
- Company effective date
- Certificate of Status Request – You may request a certificate of status, which certifies that your LLC is legal and up- to-date on fees and regulations with the State Department, for an additional $5 fee.
- Certified Copy Request – You may request a certified copy of your Articles of Organization for an additional $30 fee per copy.
Sunbiz E-File is a great resource directly from the Department of State for a list of instructions and guidelines for filing your Articles of Organization.
Here are the current filing fees for the state of Florida:
- Filing Fee $100.00
- Registered Agent Designation Fee $25.00
- Certificate of Status (optional) $5.00
- Certified Copy (optional) $30.00
Step 5: Apply for an EIN/ITIN
Employer Identification Number (EIN)
An Employer Identification Number (EIN) is a unique 9-digit number that is used to identify your company for taxation purposes. This number is required to open a business bank account or conduct any tax-related or financial operations, so you should apply for one as soon as possible. Your Registered Agent may apply for one on your behalf.
An EIN is provided by the IRS. To apply, download or submit the required application. The application must be completed and signed by your company’s “primary responsible party” – this must be an individual and must be the owner, general partner, or grantor of your company. It can be returned in various ways – by mail, online, via fax, or by phone if you are an international applicant. The IRS website has a list of contact information and other guidelines to help you through the process.
It is important to note that the IRS has restrictions on the number of EINs processed per day. As of May 21, 2012, only one EIN will be issued to each responsible party each day. Also, this is a free service provided by the IRS, so avoid companies who charge for assistance with filing for your EIN.
Individual Tax Identification Number (ITIN)
An Individual Tax Identification Number (ITIN) is a unique 9-digit number that acts as a social security number for tax purposes. A social security number is required to complete the application for an EIN. If you are not a U.S. resident or are otherwise ineligible to apply for a social security number, you will need to apply for an ITIN before you apply for an EIN. You do not need to be a U.S. citizen or resident to apply for this number.
To apply for an ITIN, visit the IRS website here for a list of required forms and acceptable ways to submit your application. Please note that this process can take up to seven weeks, so it is important to apply for your ITIN as soon as possible.
Step 6: Obtain Licenses and Permits
Depending on the nature of your business activities and your operating location, you will need to apply for the required permits and/or licenses. Businesses are subject to municipal, county, state, and federal licensing requirements. Regulations vary by state, county, and business activities, so it is important to be thorough when researching your needed licenses and permits.
You will need to obtain a license or business tax receipt from the county in which you plan to conduct business. If your business is located in a municipality, you will also need to obtain a business license from the municipal department. There are also other specific requirements for beginning business operations that are county-specific; for detailed information and forms for Miami businesses, visit MiamiDade.gov.
There are certain types of business activities that require federal or state permits, licenses, and/or additional paperwork in order to operate legally. Some examples include medical practices, attorney practices, restaurants, certain types of construction companies, and others. All businesses involved in activities that are regulated by the federal government will be required to obtain a federal license.
For information on federal business licenses, visit the Small Business Administration website.
For information on Florida State business licenses, visit the Florida Department of Business and Professional Regulation
Step 7: Open a Bank Account
Your business will need a local bank account in order to begin operations. Using your personal bank account is not recommended as it can cause tax and other legal hazards. Requirements for opening an account will vary based on your chosen bank, but here are the most common requirements:
- Your EIN
- Your filed Articles of Organization and proof of approval (typically a Certificate of Status)
- Forms of Identification (Drivers License, ITIN, passport, etc.)
- A statement of approval from your company members granting permission to open a company account
When you are ready to open a bank account, the easiest way is to call your bank of choice and ask what documentation they require.
Step 8: Research Your Tax Requirements
We’ve already covered some of the tax benefits available to Florida businesses. Florida has a very business-friendly tax structure, but there are state and federal taxes that will be required for your business on an ongoing basis. It is extremely important that you research and understand the required taxes for your business.
Depending on your business, you may owe state income taxes, corporate taxes, and/or additional taxes such as self-employment or product taxes. There are also business and location-specific taxes, such as duties and transportation taxes. Your business structure and activities will designate which types of taxes you are responsible for filing. Additionally, your members or employees may be responsible for filing some taxes on your company’s behalf. For a comprehensive guide on how taxes may affect your LLC, visit Incfile.
Step 9: Research Additional and Ongoing Requirements
There may be additional or ongoing requirements for your business. These requirements vary by state and business structure. Be sure to check with your state and local business authorities to make sure that you understand all of the requirements to start and maintain your business.
For example, every LLC in Florida must file an Annual Report with the Florida Division of Corporations in order to maintain “active status” with the state. This report is required every year, even if you don’t need to file any changes. It is due each year between January 1 and May 1 – failing to submit the report before May 1 will result in large late fees. There is a $139 filing fee each year.
To file your annual report and for additional information, visit Sunbiz.
A Virtual Office Can Make Starting a Business at Home Even EASIER!
A virtual office is an online business solution that can make expanding or creating your U.S. business easier and more cost-efficient. That’s because a virtual office provides your company with a U.S. business address, offers registered agent services, and includes mail handling services. It can also include a variety of additional business services such as virtual receptionists and access to meeting spaces to help your company thrive. Read more about the benefits of a virtual office to your U.S. business
Set-Up Your Virtual Office in Miami in Minutes
The costs to relocate your business and your family can be high, especially for a startup or small business. Moving expenses, real estate purchases, and administrative costs can put your business in debt before you even begin! Luckily, at Starthub, we provide a solution. A Starthub virtual office lets you take full advantage of Miami’s benefits while keeping your business costs virtually non-existent. Our services will give you a prestigious business address in Miami. You get the address and all of the perks that come with it, without ever leaving your home. It’s like having your cake and eating it, too! For several other ways that our products can benefit your small business, check out How Can A Virtual Office Help Your Small Business?
Contact us today to start setting up your business in Miami and guarantee your success! We’ll see you there![/vc_column_text][/vc_column][/vc_row]