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How to Form a Florida S Corporation

You might be surprised to learn that setting up an S Corporation in Florida is quite straightforward. In most cases, small business owners and investors need only complete three steps.

Step One: Form Eligible Entity

I need to start by explaining something. An S Corporation is not really a corporation. Rather an S Corporation is an eligible entity which has elected to use the tax accounting rules contained in subchapter S of the Internal Revenue Code.

Therefore, you set up an eligible entity as the first step in setting up an S corporation.

In the state of Florida, small businesses and investors have two obvious choices for an "eligible entity:" a traditional corporation or an LLC. And the Florida Secretary of State provides simple, free forms nearly everyone can fill out and submit, thereby creating the new entity. (Forms for starting a corporation are available here, and forms for starting an LLC are available here.

Note: Because historically only corporations elected to use the subchapter S rules, entities that use the rules are usually called "Subchapter S" corporations. But you just did read the preceding paragraph correctly: an LLC may also be treated as an S corporation. People still call these LLCs "S corporations" though. Which is weird. Really, people should probably call them "Subchapter S LLCs" or "S LLCs."

Step Two: Obtain Employer Identification Number

After formation of the eligible entity, the entity needs to acquire a federal employer identification number also known as an EIN. Note that applying for and obtaining an EIN is usually pretty easy, too. The IRS supplies a one page form called an SS-4 which you use to obtain your EIN.

The www.irs.gov website also provides links to an online EIN application you can use to get your EIN nearly instantaneously. The online application in general works during normal business hours, but not always at other times of the day or night.

Step Three: Elect Subchapter S Status

Step three, the final step, is making the election to use subchapter S tax accounting rules. Making the subchapter S election using the 2553 form, also available from the www.irs.gov website, is what makes an entity a subchapter S corporation or LLC. Once the IRS accepts the 2553 application, the corporation or limited liability company is treated for income tax purposes as an S Corporation.

And a final, quick note: Some states require eligible entities to make an additional, separate state subchapter S election, but Florida does not. Florida accepts, or recognizes, the federal election.

Need a Little Help?

Here's the truth about S corporations: The steps are pretty straight forward. Some people, many people in fact, can probably prepare the forms themselves. But it's helpful often to have a roadmap for the process. And so I've created simple, short do-it-yourself kits that provide more detail about each of the three steps, gives you some additional background information on maximizing the tax savings related to setting up an S corporation, and then provides the governing documents (such as corporate by-laws) that you can't get from the state of Florida or Internal Revenue Service website.

Two Options for Setting Up a Florida S Corporation

As mentioned in the opening paragraphs on this page, you have actually two options for setting up a Subchapter S corporation because an S corporation is not a corporation. Rather, an S corporation is an eligible entity that's made an election to be treated as a subchapter S corporation.

Because there are two ways to create an S corporation, you can choose between the two S corporation kits this web site sells.

Option 1: LLC Version

For $37.95, you can purchase the 20+ page pdf document that discusses and describes the benefits of creating an S corporation using a limited liability company and then the steps for forming the entity, for obtaining the EIN and for electing subchapter S status.

The $37.95 kit includes examples of completed Florida and federal IRS tax forms so you know exactly what your set up documents should look like.

The Florida kit also includes two sample LLC operating agreements (the governing document for an LLC), one for a single member Florida limited liability company and one for a multiple member Florida limited liability company.

Table of Contents

  • Introducing the Florida LLC
  • Assessing the Benefits
  • Weighing the Drawbacks
  • Steps for Forming a Florida LLC
  • Licensing Businesses in Florida
  • Obtaining an EIN
  • Electing S Corporation Status
Purchase and Download

Option 2: Regular Corporation Version

For the same $37.95 price, you can instead purchase the 35 page pdf document that describes using a regular, traditional corporation as the starting point for a Florida S corporation. As with the LLC version of the kit, the regular corporation version provides step-by-step instructions for completing both the Florida forms and the IRS forms and it supplies sample corporate by-laws to use for your governing documents.

Table of Contents

  • Introducing the Florida Corporation
  • Assessing the Benefits of Incorporation
  • Weighing the Drawbacks of Incorporation
  • Steps for Incorporating in Florida LLC
  • Licensing Businesses in Florida
  • Obtaining an EIN
  • Electing S Corporation Status
  • Sample Florida Corporate By-laws
Purchase and Download

 

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