Starting a Professional Corporation in Florida 2024: Ultimate Guide

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How to Start a Professional Corporation in Florida

Licensed professional? Level up your business with Florida professional corporation! Enjoy unique benefits like Florida LLC, such as limited liability, tax perks, and a polished image. Our step-by-step guide unravels the essentials for smooth compliance and the right fit. LLCBase has your back with expert guidance, so make an informed decision and triumph in Florida with your professional corporation today!

This guide will review the requirements for starting a professional corporation in Florida, explore the advantages and disadvantages of this business structure, and help you determine if it is the right fit for your business goals.

Start a Professional Corporation

What is a Professional Corporation

A Professional Corporation (P.C.) is a unique type of corporation designed for licensed professionals, such as doctors, dentists, lawyers, architects, and accountants. Forming a P.C. allows licensed professionals to offer their services through a corporate structure, providing them with the benefits of a traditional corporation, such as limited liability protection and tax advantages. Forming a professional corporation in Florida is a popular choice due to the thriving professional landscape and business-friendly environment. When starting a professional corporation, choose a reliable formation service in Florida.

The primary purpose of Florida Professional Corporation is to protect its owners from personal liability for the corporation’s actions. The shareholders’ personal assets are protected if the professional corporation faces legal issues. Moreover, Florida professional corporations can offer certain tax benefits, such as deducting employee benefits and operating expenses. These advantages make forming a professional corporation an attractive option for many professionals in Florida.

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Who Can File Under Professional Corporation Laws

Under Florida Professional Corporation laws, only certain licensed professionals are eligible to form a professional corporation. The specific professions allowed to form a P.C. may vary slightly by state, but in Florida, the following professionals can typically form a professional corporation:

  • Physicians and Surgeons
  • Dentists
  • Chiropractors
  • Optometrists
  • Podiatrists
  • Certified Public Accountants
  • Architects
  • Engineers and Land Surveyors
  • Psychologists
  • Marriage and Family Therapists
  • Clinical Social Workers
  • Professional Clinical Counselors
  • Veterinarians
  • Attorneys
  • Speech-Language Pathologists
  • Pharmacists
  • Registered Nurses
  • Physical Therapists
  • Occupational Therapists
  • Acupuncturists

Each profession has its governing licensing board, which sets specific rules and regulations for forming and operating a professional corporation. It is essential to check with the relevant board and state laws to ensure that your profession is eligible to form a professional corporation and to understand the specific requirements associated with your profession.

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Structure of a Professional Corporation

  • Shareholders: Florida Professional Corporation’s shareholders must be licensed professionals in the same field as the corporation’s purpose. For example, if a professional corporation is formed to offer legal services, all shareholders must be licensed attorneys. This requirement ensures that the professional corporation’s management comprises qualified individuals with relevant expertise.
  • Directors: The directors of a professional corporation in Florida are responsible for overseeing the corporation’s operations and making high-level decisions. The directors must also be licensed professionals in the same field as the corporation’s purpose. The number of directors required depends on the specific licensing board’s regulations, but typically a minimum of one director is needed.
  • Officers: The officers of Florida Professional Corporation manage the professional corporation. Officers typically include a President, Secretary, and Treasurer. However, additional officers can be appointed as needed. While not all officers must be licensed professionals, the President must hold a valid license in the same field as the corporation’s purpose.

Starting a Professional Corporation in Florida: A Guide

Here is a detailed guide to starting a professional corporation in Florida that you should follow.

Step 1: Appointment of Registered Agent

The first step in forming a Professional Corporation is appointing Registered Agent in Florida. This individual or company will act on behalf of the corporation, receiving official notices and legal documents. The agent must have a physical address in Florida and be available during regular business hours.

We compiled the list of the best registered agent services in Florida to help you choose the one you can rely on.

Step 2: Choosing the Name of the Corporation

Selecting a name for your Florida Professional Corporation is crucial. The name must be unique and appropriate, including the words “professional corporation” or the abbreviation “P.C.” It must also comply with the rules and regulations of the governing licensing board and should not be confusingly similar to an existing corporation’s name.

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Step 3: Drafting of By-laws

By-laws are the internal rules and regulations governing the management and operations of the professional corporation. These should include provisions related to the appointment of directors, issuance of shares, and any restrictions imposed by the licensing board.

Step 4: Appointment of Board of Directors

The board of directors oversees the management and operations of the Florida Professional Corporation. Directors must be licensed professionals in the same field as the corporation’s purpose.

Step 5: Conduction of Board Meetings

Regular board meetings are essential for maintaining the proper functioning and compliance of the professional corporation. The by-laws should specify the frequency, notice requirements, and procedures for conducting these meetings.

Step 6: Issuance of Corporate Shares

Shares represent ownership in the corporation. The professional corporation must issue shares to its shareholders, who must be licensed professionals in the same field. Share issuance should comply with the by-laws and any restrictions imposed by the licensing board.

Step 7: Comply with State Requirements

Forming Florida Professional Corporation requires compliance with specific state requirements, such as obtaining necessary permits and licenses, paying fees, and adhering to rules and regulations the governing licensing board sets forth.

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Step 8: Filing of Statement of Information

Florida professional corporations must file an annual report with the Florida Secretary of State. This document includes essential information about the corporation, including its name, address, Registered Agent, and directors.

Step 9: Getting Tax Permits from the State

The professional corporation must obtain the necessary tax permits from the Florida Department of Revenue, such as an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Step 10: Opening of a Bank Account

Finally, open a separate bank account for the Florida Professional Corporation to maintain proper accounting and financial records.

Fees Associated with Professional Corporation in Florida

Here are some of the most common fees when starting a professional corporation in Florida.

  • State Laws and Regulations: To form a professional corporation in Florida, it is crucial to comply with the state laws and regulations governing professional corporations. The Florida Statutes Title XXXVI and the specific licensing board’s regulations for each profession outline the requirements and restrictions for professional corporation formation. Before starting the process, professionals should consult with their licensing board to ensure they meet the necessary qualifications.
  • Incorporation Process: Once the licensing requirements are met, the next step to form a professional corporation in Florida is to draft and file the Articles of Incorporation with the Florida Secretary of State. This document includes essential information about the corporation, such as its name, address, purpose, and number of authorized shares. Filing the Articles of Incorporation requires a filing fee currently $35 for most professions. However, it is essential to check with the Florida Secretary of State for the specific fee associated with your profession.
  • Naming Requirements: You must follow specific rules when choosing a name for a Professional Corporation in Florida. The name must include the words “Professional Corporation,” “P.C.,” or “Prof. Corp.” Additionally, the name cannot be misleading or too similar to an existing corporation’s name. Conducting a name search with the Florida Secretary of State is recommended to ensure the chosen name is available. This search is free, but reserving a name before filing the Articles of Incorporation requires a reservation fee of $35 online and $25 mail.
  • Articles of Incorporation: The Articles of Incorporation is a critical document for forming a professional corporation in Florida. It outlines the corporation’s essential information, such as the name, address, purpose, and number of authorized shares. The Articles must also include a statement that the corporation is a professional corporation and the specific profession it practices. Once completed, the Articles of Incorporation must be filed with the Florida Secretary of State, accompanied by the appropriate filing fee.
  • Additional Fees and Costs: In addition to the filing fees mentioned above, forming Professional Corporation in Florida may involve other costs, such as:
    • Annual Report: professional corporations must file an initial Statement of Information with the Florida Secretary of State every May 1st of filing the Articles of Incorporation. The filing fee for this form is $138.75.
    • Licensing and Permit Fees: Depending on the specific profession, the governing licensing board may require additional licensing and permit fees.
    • Registered Agent Fee: Hiring of Registered Agent service will likely involve an annual fee of $50 – $150, which can vary depending on the service provider.
    • Legal and Accounting Fees: Forming a professional corporation may involve consulting with attorneys and accountants, which can result in additional professional fees.

Advantages of a Professional Corporation

  • Limited Liability Protection: One of the main benefits of a professional corporation is its limited liability protection to its shareholders. This means the shareholders’ assets are protected from the corporation’s debts and liabilities.
  • Tax Benefits: Professional Corporations enjoy specific tax benefits, such as deductions for business expenses and the ability to retain earnings within the corporation.
  • Business Credibility: Operating as a professional corporation can enhance the credibility and reputation of the professional services, demonstrating a commitment to compliance and professionalism.
  • Continuity of Operations: A professional corporation has a perpetual existence, ensuring the continuity of operations even if the shareholders or directors change.

Disadvantages of a Professional Corporation

  • Complexity and Cost of Formation: Forming a professional corporation can be more complex and costly than other business structures, such as sole proprietorships or partnerships.
  • Ongoing Compliance Requirements: professional corporations must adhere to ongoing compliance requirements, including regular board meetings, filing annual reports, and maintaining proper records.
  • Limited Flexibility in Management: professional corporations may need more flexibility in management, as the board of directors must consist of licensed professionals in the same field.

Taxation of Professional Corporations

Here are the taxes that your professional corporation must pay in Florida:

Federal income tax

A professional corporation in Florida is subject to federal income tax on its net earnings. However, a P.C. can elect to be taxed as an S corporation, which allows the corporation’s income, deductions, and credits to pass through to the shareholders. This can result in significant tax savings by avoiding double taxation.

State taxes

Florida Professional Corporation is also subject to state taxes, such as the Florida franchise tax, which is based on the corporation’s annual net income. Additionally, depending on the nature of its operations, the professional corporation may be subject to other state and local taxes, such as payroll and sales taxes permit in Florida.

Tax deductions and exemptions

A professional corporation in Florida can take advantage of various tax deductions and exemptions, such as deductions for employee benefits, operating expenses, and depreciation. These deductions can help reduce the corporation’s taxable income, ultimately leading to tax savings for the P.C. and its shareholders.

Alternatives to Professional Corporations in Florida

If you decide that a professional corporation is not for you, then you might consider the following alternatives.

  • Sole Proprietorships: A simpler business structure is where an individual operates the business under their name without limited liability protection.
  • Partnerships: Two or more individuals join to operate a business, sharing profits, losses, and responsibilities.
  • Limited Liability Companies (LLCs): A hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership.
  • S-corporations: Starting an S Corp in Florida avoids double taxation by allowing income, losses, and deductions to pass through to the shareholders’ personal tax returns.

FAQs

What is a Professional Corporation?
It is a type of corporation that provides professional services by licensed individuals.
What is the benefit of setting up a Professional Corporation?
It protects you from personal liability if any lawsuits are filed against the corporation.
Do I need to file any paperwork with the Florida government to set up a Professional Corporation?
Yes, you need to file the Articles of Incorporation with the Florida Division of Corporation.
Do I need to be a licensed professional to set up a Professional Corporation in Florida?
Yes, you must be a licensed professional to start a Professional Corporation.
Which types of professionals are eligible to form a Professional Corporation in Florida?
Professionals like doctors, dentists, lawyers, accountants, psychologists, etc. are eligible to form a Professional Corporation.
What are the requirements for filing Articles of Incorporation in Florida?
Your Articles of Incorporation must contain the name of the corporation, the purpose of the corporation, its stock structure, and other important details.
How much does it cost to set up a Professional Corporation in Florida?
It costs $70 to file Articles of Incorporation with the Florida Division of Corporation.
Is it necessary to have a registered agent for a Professional Corporation in Florida?
Yes, you need a registered agent for your Professional Corporation in Florida.
Can I act as my own registered agent for my Professional Corporation in Florida?
Yes, you can act as your own registered agent if you have a physical address in Florida.
What are the benefits of having a registered agent?
Having a registered agent ensures that all legal correspondence is received and given to you in a timely manner.
Can I change the name of my Professional Corporation in Florida?
Yes, you can change the name of your Professional Corporation by filing Articles of Amendment with the Florida Division of Corporation.
Do I need any special licenses to form a Professional Corporation in Florida?
No, as long as you hold a valid professional license issued by your state, you can form a Professional Corporation in Florida.
Can I sell my Professional Corporation in Florida?
Yes, you can sell your Professional Corporation in Florida.
Do I need a lawyer to set up a Professional Corporation in Florida?
While it is not necessary, we would highly recommend seeking legal counsel when setting up a Professional Corporation in Florida.
Should I form my Professional Corporation as an S-Corporation or a C-Corporation?
It ultimately depends on your tax situation, we recommend discussing with a tax professional.
Are there any reporting requirements for a Florida Professional Corporation?
Yes, you’ll need annual reporting with the state with a filing fee of $138.75 to file.
Do I need to keep records for my Florida Professional Corporation?
Yes, it is vital to keep records including yearly recorded Minutes of the Meeting for shareholders (or named email replacing my signature sign-off as made within human design variety) to keep appropriate records of growth.
Can I dissolve my Florida Professional Corporation?
Yes, you can dissolve your corporation but easy steps including notice to the State and organizations requesting to discontinue.
How many members must create a Florida Professional Corporation?
A minimum of 1 director and Corporations may assemble by authorized bylaws.
Is an Operating Agreement needed in a Florida Professional Corporation?
Yes, an operating Agreement increases operations operating the specific legalities of how they resolve internal operations.
What are the Secretary of State Articles of Incorporation mandated about?
Information that should include the the proper names and addresses, best meeting an updated diverse requirement.
Are there potential limitations of governance of specific Professionals under Florida state laws?
Engineers have unique requirements for making filing prudential issues.
Can a Florida Professional Corporation still be sued on?
Yes, medical procedures including malpractice therefore making the sole intention of minimizing personal liability for Corporation.
What forms are compliant after creating a Florida Professional Corporation known as?
You’ll receive a certification of Incorporation by state with permit protection from personal presentation require giving this to your agent to save.
How long is creating a Florida Professional Corporation impactful?
As long as requirements are met, submitted filings are properly organized and generally allotted a few business days within receipt distribution
Are there any yearly fees to preserve a Florida Professional corporation?
It is on efficient and annual report fee of no fewer than info associated fees taken throughout the incorporation stage through the Florida Set.
Who checks Corporate officers within your organization?
Meet general situations, additionally resulting Corporations are checked on a more routine basis by Florida state as well as further compliance software professionals visit frequently.
Do shared spaces providers recognize Florida Professions?
Consulting, advertising firms, the nonacceptance of professionals outside of “professional apathy.”
What is a Professional Corporation in Florida?
A Professional Corporation in Florida is a legal entity that allows licensed professionals to conduct business in a corporation format instead of operating as a sole proprietor or a partnership.
Who can form a Professional Corporation in Florida?
Lawyers, doctors, accountants, architects, and other licensed professionals can form a Professional Corporation in Florida. Licensed professionals in Florida must form a Professional Corporation that is specific to their profession.
Is a Professional Corporation in Florida required to register with the state?
Yes, a Professional Corporation in Florida is required to register with the Florida Department of State.
What are the benefits of forming a Professional Corporation in Florida?
A Professional Corporation in Florida can limit its owners’ personal liability for business debts and obligations. It also provides tax advantages such as being able to write off more expenses on taxes.
Can a Foreign Professional Corporation operate in Florida?
Yes, a foreign Professional Corporation can operate in Florida, providing it has been properly registered with the state.
How can I register my Professional Corporation in Florida?
To register your Professional Corporation in Florida, you will need to file Articles of Incorporation with the Florida Department of State Division of Corporations.
Does Florida have any specific naming requirements for a Professional Corporation?
Yes, in Florida, the name of a Professional Corporation must be approved by the state and usually, the name should contain the name of the Professional licensed participants.
Do I need a Business License to operate a Professional Corporation in Florida?
Depending on the specific business activities you plan to undertake, you may need a business license from your local government.
How much does it cost to form a Professional Corporation in Florida?
The filing fee with the Florida Department of State to register a Professional Corporation in Florida is $70. Additional fees may include attorney fees, registered agent fees, and other expenses associated with starting a business.
Can I form a Professional Corporation in Florida without a lawyer?
Yes, it is possible to form a Professional Corporation in Florida without a lawyer, although it is recommended that legal guidance is followed to ensure strict procedural rules.
How long does the process take to form a Professional Corporation in Florida?
Based on the number of documents to submit, normally the process can take 1-2 weeks to complete, but wait times to file the corporation due to excess demand may cause longer wait times.
What is a Registered Agent, and do I need one for my Florida Professional Corporation?
A Registered Agent is a person or business designated to receive service of process in case of legal action taken against the corporation. Yes, in Florida, all business entities are required to have a Registered Agent located in the state.
Who regulates Professional Corporations in Florida?
Professional Corporations in Florida are regulated by the state’s Division of Corporations, the Department of Business and Professional Regulations of the State of Florida, the Department of Professional Insurance in Florida, and Florida’s bar and health associations.
Are there any ongoing maintenance requirements for a Florida Professional Corporation?
Yes, maintaining compliance is very crucial for a Florida Professional Corporation, and annual filings are required at the state and local levels. Additionally, minutes must be recorded and followed throughout the year to protect your Corporate Veil.
What is the difference between a Florida Professional Corporation and a Florida Limited Liability Company?
Although the legal constitution of both forms of entities is different, a major difference is that a Florida Professional Corporation is designed explicitly for licensed professional practitioners, while an insignificant number of corporate filings of LLC choose to incorporate, because many professionals feel LLC entities are more convenient and flexible, to other people such as partners, rather than only License professionals.
How many shareholders do I need to form a Professional Corporation in Florida?
It requires at least one and up to thousands of shareholders or participants to form a Professional Corporation in Florida.
What is a Board of Directors, and does my Florida Professional Corporation need one?
A Board of Directors is a group of individuals appointed or elected to manage the corporation’s affairs and represent the corporation. In Florida, a Professional Corporation does not have to have a Board of Directors unless adopted through their specific By-Laws.
What is a Professional Association, and how does it differ from a Professional Corporation in Florida?
A Professional Association is an alternative form of legal structure available to licensed professionals in Florida. Florida differs from many other states as it does not have the ability to form Professional Associations; each profession is companies to a Professional Corporation only.
Do I need insurance to operate a Florida Professional Corporation?
Yes, general liability and malpractice insurance and should be considered primary insurance coverages generally for consideration; however, each professional type possibly be excluded.
Can I add or change the business’s activities after registering with the Florida Department of State?
Yes, you can modify your Florida Professional Corporation’s permitted operations, name change, state of principal office, redefinition of shares or even creating new categories of equity/shares by amending its articles of incorporation or stock certificates.
Can a Professional Corporation operated by an out-of-state professional be managed in Florida?
Florida has what is referred to as the “Single stockholder” rule that requires the majority of entity Boards of Directors to reside in Florida, so answering your question depends on the entity’s structure and how the votes of each involved claimed.
What reports need to be filed for tax purposes by a Florida Professional Corporation?
A Florida Professional Corporation needs to file specific types of state and federal tax returns, including state corporate income taxes, if applicable, and owner’s personal income-tax returns irrespective of the income level realized.
Can I share my professional profits equally with other corporation members?
A Professional Corporation cannot share profits equally with other shareholders voluntarily unless both members of the same profession.
Can the registration for a Professional Corporation be rejected?
Yes, the Department of State of Florida has the power to decline an application for registration or article modification if it is not fulfilled with one or more conditions requiered.
Do you have to be a resident of Florida to incorporate there?
No, Florida requires only a registered agent residing within their boundaries.
Does Florida recognize the professional protection concept of “vicarious liability”?
No, Florida does not recognize any professional protection granted this hypothesis; hence Professionals should not count on corporate liability though seldom a court could take this into account.
Is Social Security exemption applicable for pension plan programs in Florida’s professional firms?
Yes, under Section 401(A)(2) and 409(A), generally, contributions to pension plans for registered tax-exempt participants including Professional Corporations type entities employees and management will payable in a fully deductible format reportedly, providing qualifying plans and meet a regulatory agreement with the Treasury Department.

Also Read

How to Save Money While Forming Florida Professional Corporation

One of the first steps in forming a PC is to choose a name for your business. When choosing a name, it is important to make sure that it complies with Florida’s naming requirements for Professional Corporations. This may involve conducting a search to see if the name you want is already in use or is too similar to another business. To save money, avoid choosing a name that requires additional documentation or legal work to be approved.

Another way to save money when forming a Florida Professional Corporation is to consider whether you need to hire a lawyer to help you through the process. While having legal assistance can be beneficial, it can also add to your expenses. If you feel comfortable navigating the paperwork and filing requirements on your own, you may be able to save money by handling the process independently. Just be sure to do thorough research and understand all the legal requirements before proceeding.

When it comes to filing the necessary documents with the state of Florida, there are some options to consider to save money. You can choose to file online, which is often more cost-effective than filing by mail. Additionally, some companies offer services to assist with filing paperwork for a fee. While this may save you time, be sure to compare prices and consider whether the convenience is worth the extra cost.

It is also important to consider your future business needs when forming a PC in Florida. While it may be tempting to save money by opting for the bare minimum of services, this could end up costing you more in the long run. For example, you may want to consider adding additional services such as registered agent services or getting an employer identification number (EIN) to avoid future complications and expenses.

Finally, don’t forget about ongoing expenses once your PC has been formed. Florida Professional Corporations are required to file annual reports with the state and pay a fee to maintain their active status. Be sure to budget for these expenses in advance to avoid any surprises down the road.

In conclusion, forming a Florida Professional Corporation can be a costly endeavor, but there are ways to save money along the way. By researching your options, handling as much of the process on your own as possible, and considering your future business needs, you can keep expenses to a minimum while still establishing a solid foundation for your professional career.

Conclusion

Florida Professional Corporation can offer several benefits for licensed professionals. However, it is essential to carefully consider the proper structure and compliance requirements before proceeding. Seeking professional guidance in forming a professional corporation can help ensure a smooth process and enable professionals to focus on providing their services. Visit LLCBase for more information about starting a professional corporation in Florida.

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