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Forming a professional corporation in Florida can provide numerous benefits, including liability protection and increased credibility. If you are a licensed professional, such as a doctor, lawyer, or accountant, forming a professional corporation (PC) is an ideal way to operate your business. In this article, we will guide you through the process of forming a professional corporation in Florida, updated for 2023.
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What is a Professional Corporation?
A professional corporation is a business entity specifically designed for licensed professionals who want to organize their practice as a corporation. By forming a PC, licensed professionals can limit their personal liability for business debts, mistakes, or negligence done by other professionals within the corporation. It allows professionals to maintain a level of independence and avoid personal liability for their partners' or employees' actions.
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Step - 1: Choose a Name for Your Professional Corporation
Before heading to the official registration, you need to choose a unique name for your professional corporation. Florida law requires professional corporations to use certain suffixes to signify the nature of their corporation. Some typical examples include "Professional Corporation", "P.A." (for Professional Association), "P.A." (Professional Association), etc. Conduct a name availability search on the Florida Division of Corporations' website to ensure your choice isn't already taken.
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Step - 2: Prepare and File Articles of Incorporation
Once you have a unique name for your professional corporation, you need to prepare and file the Articles of Incorporation. The Articles are filed with the Florida Division of Corporations. You can find the required form, which typically includes:
1. Corporation name
2. Registered agent's name and address
3. Principal address
4. NAICS code (new business applicants need to provide this)
5. Enumeration and qualification of licensed professionals
You may also need to include an operating agreement if more than one licensed professional is involved.
Step - 3: Appoint a Registered Agent
Every professional corporation in Florida is required to have a registered agent. The registered agent is responsible for receiving any legal documents, such as lawsuits or official notices, on behalf of the corporation. The registered agent can be either an individual who resides in Florida or a corporate entity authorized to do business in the state. You can appoint yourself as the registered agent or engage a third-party professional service.
Step - 4: Obtain Necessary Licenses and Permits
As a licensed professional, your corporation will likely require various licenses and permits before conducting business in Florida. The exact requirements depend on the nature of your profession. Undertake thorough research or consult with an attorney who specializes in professional corporations to ensure you have all the necessary licenses and permits.
Step - 5: Obtain an Employer Identification Number (EIN)
To open a business bank account and fulfill tax obligations, you need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Visit the IRS website and complete the online application to obtain your EIN. Ensure you have all the required information with you, such as your newly formed professional corporation's name, founding date, and principal location.
Step - 6: Create Bylaws and Hold an Organizational Meeting
As with any corporation, you need to create bylaws for your professional corporation in Florida. Bylaws describe how the corporation will be governed and outline the roles and responsibilities of its officers and directors. Once the bylaws are prepared, you may hold an organizational meeting to approve the bylaws, elect officers, and handle any other necessary matters.
Step - 7: Comply with Ongoing Requirements
Forming a professional corporation is not a one-time task, as ongoing compliance is essential. Ensure you comply with all state regulations, renew your licenses and permits on time, and file any necessary reports. Florida also requires professional corporations to file an annual report, usually due by May 1st. Keep track of all important deadlines and maintain proper records to stay compliant.
Conclusion
Forming a professional corporation in Florida brings with it several advantages for licensed professionals. By following these seven steps, you can establish your professional corporation in Florida efficiently and effectively. Remember to consult with legal professionals or business advisors to ensure you meet all the necessary requirements and protect your interests. With a properly formed professional corporation, you can focus on building your business with reduced personal liability and increased credibility.
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