Do you want to open a one-man business or sole proprietorship in Florida? If YES,here is a detailed guide on how to start a sole proprietorship business in Florida. Sole proprietorship is a type of Business model that is owned and set-up by one person, the business owner. The owner of the business in question is mandated to take full ownership and control of the entire business as well as the other matters that may affect its operation.
Under the department of Florida state law, a sole proprietorship can operate under the business owner’s name or use a different name (Doing Business As (DBS). If you opt for another name, you must comply with applicable Florida and local licensing requirements in order to operate legally and without hassles.
Florida provides many opportunities to startup your business, regardless of if you wish to start with little or no capital. If you want to go about registering your sole proprietorship business by yourself, you may need to do a lot of groundwork to ensure a smooth flow of operations.
While you are at it, you should note that opening a business as a sole proprietor is seldom recommended from a legal perspective because of its inherent limitations.
A sole proprietorship is a simple and easy way to launch a business. In contrast to other business models in Florida, a sole proprietorship does not have any legal formalities—such as registering with the Florida Secretary of State. There is, however, a process for maximizing profits and removing possible hindrances when creating your sole proprietorship in Florida, and we are going to discuss the process below.
10 Steps to Starting a Sole Proprietorship Business in Florida
In Florida, you can establish a sole proprietorship in a few simple steps. Note that you can open this business model without filing any legal documents with the Florida Department of State. The steps you need to follow to establish this business model include:
Table of Contents
- Choose a Business Name
- File a Trade Name
- Obtain Licenses, Permits, and Zoning Clearance
- Obtain an Employer Identification Number
- Submit a new hire report, if applicable
- Find a domain name
- Open a business bank account
- Obtain General Liability Insurance
- Advertise your new business name in a local Florida newspaper
- Report and pay taxes
Choose a Business Name
Choosing a business name is one of the first things to do if you are thinking of registering a sole proprietorship in Florida. In this city, a sole proprietor may use his or her own given name or may use an assumed name or trade name.
It is always a good idea to choose a name that is not too similar to another registered business because of common and federal law trademark protections. You have to make sure that your chosen business name is available, and to do that, you have to run a search in the following government databases:
- Florida Department of State
- U.S. Patent & Trademark Office
File a Trade Name
If you use a business name that is different from your legal name, Florida requires you to register the trade name. But before you do that, you have to make sure that the name is not similar to any other business name. If the name is similar, you can face trademark infringement issues.
After you have chosen a name, you will need to publish it in a local newspaper in the county where your business is located. To file your trade name, you can download the Trade Name Form and mail it to the Department of State or you can file it online at the Department of State’s Online Fictitious Name Registration. The filing fee is $50.
Obtain Licenses, Permits, and Zoning Clearance
Your business may need to obtain a variety of licenses and permits depending on its business activities. Florida Department of Business and Professional Regulation (DBPR) is the agency in charge of licensing and regulating most professions. Their website provides a complete list of the professions that it regulates and licenses.
However, other professions such as health care and law are licensed by other departments. If your particular profession is not listed with the DBPR check with the appropriate Florida State Agency. In addition, local regulations, including building permits and zoning clearances, may apply to your business. You should check with your city and county governments for more information.
You must also obtain licensing or permits related to the workspace. For example, if you are incorporating so you can start a construction project, you need to obtain permits for building and variances for zoning. Check with your target municipality for more information.
Federal licenses and permits are required for the following business activities:
- Agriculture, including the transport of animals, animal products, biologics, biotechnology or plants across state lines. You would obtain your permit from the U.S. Department of Agriculture (USDA).
- If your business is related to the manufacture, import or sale of alcohol, you would apply for a permit from the U.S. Treasury’s Alcohol and Tobacco Tax and Trade Bureau (TTB).
- If your business involves aircrafts, you may be required to obtain a permit or license from the Federal Aviation Administration.
- If your business involves firearms, ammunition or explosives you should apply for a license with the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF).
- If your business is engaged in wildlife-related activity, apply for a permit through the U.S. Fish and Wildlife Service.
- If you are involved in commercial fishing, you may need a permit or license from the NOAA Fisheries Service.
- If you provide maritime transportation, obtain your license from the Federal Maritime Commission.
- If your business involves mining and drilling for natural resources, seek a permit from the Bureau of Ocean Energy Management, Regulation and Enforcement (formerly the Minerals Management Service).
- If you produce nuclear energy seek a license from the U.S. Nuclear Regulatory Commission.
- If you are engaged in radio and television broadcasting, you must get a license form The Federal Communications Commission (FCC).
- If you business provides transportation and logistics, check with the U.S. Department of Transportation to see whether you need a permit
Obtain an Employer Identification Number
Sole proprietors who wish to have employees need to obtain an Employer Identification Number, or EIN. This is a nine digit number issued by the IRS for tax reporting purposes. All businesses with employees are required to report wages to the IRS using their EIN. Registering for an EIN can be done online at the IRS website.
Sole proprietors without employees are not required to have an EIN because they can use their Social Security number to report taxes. Nevertheless, you may want to obtain one anyway for your business. Some banks require one to open a bank account and it can reduce the risk of identity theft.
In Florida, businesses are required to file new-hire reports and register for an unemployment compensation account. You will need to use your EIN when registering your business through the Florida New Hire Reporting Center. If you have employees, you must report and pay employment taxes on a periodic basis.
Submit a new hire report, if applicable
If your sole proprietorship is hiring an employee, both Federal and Florida law require that you submit a new hire report within 20 days of the individual starting work. You can submit the report through the Florida Department of Revenue’s website.
If you hire employees, you must file new-hire reports and register for an unemployment compensation account with the Florida Department of Revenue. Florida’s DOR allows you to file your report on its website and you will be required to provide your business’s EIN.
Find a domain name
You should find a domain name that is the same or similar to the name of your business and register that domain. In the current climate, it is almost expected that a business has a web presence. Even if you do not plan on operating a website, you should still procure a domain now in the event you launch a website at a later date. This is done so that you can secure the domain name of the future.
Open a business bank account
The next step in opening your sole proprietorship in Florida is to get a business bank account. Some people actually find that they can skip this stage without problems, but it is very advisable to keep your personal and business finances separate.
Using your fictitious business name and EIN, you should set up a bank account to for your business. It is important to establish a separate business bank account for your company and you should open the new account in the name of your business. You should bring your certified Fictitious Name Registration with you to open the account.
Obtain General Liability Insurance
Because sole proprietors are personally liable for all debts and obligations of the business, a business liability insurance policy may be the only form of financial protection against unforeseen events. For this reason, it is pertinent that you obtain a general liability license.
Advertise your new business name in a local Florida newspaper
Florida law requires that you advertise your business’s registered name at least one time in the county in which your principal place of business is located. You should search for newspapers in your county and choose the most reputable newspaper and advertise your business. Make sure the newspaper you use has the required spread rate mandated by the state.
Report and pay taxes
Depending on your specific business activities, you may be required to report such items as sales tax and use tax. You will need to register with Florida’s Department of Revenue Online business Tax Application or file a paper application. Instructions are available in the Florida Business Tax Application form. You may be responsible for filing documents with the IRS if you are responsible for paying some or all of the following:
- Income Tax.
- Self-employment tax.
- Estimated tax.
- Social security and Medicare taxes and income tax withholding.
- Providing information on social security and Medicare taxes and income tax withholding.
- Federal unemployment (FUTA) tax.
- Filing information returns for payments to non-employees and transactions with other persons.
- Excise Taxes.