How to Set up a Sole Proprietorship in Florida

Co-authored by Clinton M. Sandvick, JD, PhD

Last Updated: May 6, 2021 References Approved

A sole proprietorship is the simplest way to structure a new Florida business. The unincorporated business and its single owner are considered the same for tax purposes. A sole proprietor has few federal and state start-up costs, but must be responsible for all debts, expenses and profits incurred by the business. If you want to be a Florida sole proprietor, your start-up paperwork will depend upon your type of business, whether you employ people and what name you choose.

Part 1

Part 1 of 3:

Starting Your Business

1
Recognize the pros and cons of sole proprietorship. A Florida sole proprietorship is the least complicated business structure that you can choose for your business. However, it is not without its disadvantages. Before starting a sole proprietorship, it is important to recognize the advantages and disadvantages of this business structure.
- It is the least expensive and easiest type of business to form.
- You will have complete control over the business since you are the sole owner.
- Since your business is not taxed separately from you, your tax preparation is easier than other business forms and the tax rates are lower than other business structures.
- Since this is no legal separation between the business owner and the business in a sole proprietorship, you are personally responsible for all of the debts and obligations of the business, including any lawsuits by employees against the company.
- It is difficult to raise money for your business since there is no stock to sell and some banks are reluctant to lend to a sole proprietorship for fear that the owner will not be able to repay the debt if the business fails.
- There is a tremendous burden on the owner of a sole proprietorship since you alone are responsible for whether the business succeeds or fails.^{[1]
  X
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  U.S. Small Business Administration
  U.S. government agency focused on supporting small businesses
  Go to source}
2
Write a business plan. A business plan acts as a roadmap for the future of your Florida sole proprietorship. It explains the services or products that you provide, outlines your plan to increase revenue, and provides an opportunity to outline your goals and the ethos of your business. Generally, your business plan will project 3 to 5 years into the business’ future. Typically, a business plan will include the following parts:
- An executive summary that provides an overview of the business and your goals.
- A company description that explains what the business does and how it is different from other businesses in the field and in the Florida region where your business is located.
- A section outlining the market for your business that sets forth the state of the industry, outlines the market and identifies your main competitors.
- A section that outlines your business organization and management. This may be a brief section that discusses how you intend to run day-to-day operations.
- A sections that details the service or product that you sell, including a description of its usefulness to customers.
- A section outlining your plan to market your business and sell your product.
- If you are seeking financial support or funding, you should include a section that requests funding for your business, as well as a section that outlines your financial projections.^{[2]
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  U.S. Small Business Administration
  U.S. government agency focused on supporting small businesses
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3
Choose a business name. In Florida, a sole proprietor may use his or her own given name or may use an assumed name or trade name.^{[3]
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Research source} A trade name is sometimes referred to as the name that you are “doing business as” also known as DBA. You want to choose a name that reflects your business brand. It may be easier to build a business and add legitimacy to the company if you do not use your own name. When choosing a name consider the following:
- How does the business’s name look on letterhead or in a logo?
- Are there any negative connotations associated with the name that you chose?
- Does the name reflect the ethos of your company?
- Did you choose a unique name that is not registered to someone else and is not being used as a domain name on the Internet? The U.S. Patent and Trademark Office’s website has a trademark search tool that allows individuals to check whether a business name has already been trademarked.^{[4]
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  Trustworthy Source
  U.S. Small Business Administration
  U.S. government agency focused on supporting small businesses
  Go to source}
4
Determine whether your business name is available in Florida. The Florida Department of State, Division of Corporations, provides a search tool on its website that allows for individuals to check whether a business name has already been registered in the state. It is important that you search for your business name to ensure that the business name that you chose is not already in use.^{[5]
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5
Register your name with Department of State. Once you have chosen a unique business name, you must register the name with the Florida Department of State, Division of Corporations. You can register your business name by either completing a Florida Fictitious Name Form online or downloading the document and mailing the completed form to the appropriate office.
- You will need to fill out personal and business information on the Fictitious Name Form.
- You are required to pay a $50 fee to register your name, and $30 for a certified copy of your name registration.
- You will need the certified copy in order to open a bank account under the company's name.
- You can complete or download the form at: http://form.sunbiz.org/fic_form.html.
- You can send the completed form and fees by mail to: Fictitious Name Registration, PO Box 1300, Tallahassee, FL 32302-1300.^{[6]
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6
Obtain an Employer Identification Number. An EIN, also known as a federal tax id number, is used to identify businesses for tax purposes. If your Florida business has employees, you are required to obtain an EIN. Even if your business does not have employees, you may be required to have an EIN to open a bank account in the name of the business. Obtaining a separate EIN for your business may also help reduce the risk of you falling victim to identity theft.^{[7]
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- You can apply for an EIN online with the IRS at: https://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/How-to-Apply-for-an-EIN.

Part 2

Part 2 of 3:

Establishing Your Business in Florida

1
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.^{[8]
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2
Open a business bank account. 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. This allows you to keep your business and personal assets separate. You should bring your certified Fictitious Name Registration with you to open the account.^{[9]
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3
Obtain liability insurance for your business. Since sole proprietors are personally responsible for any debts and obligations that their business incurs, it is a wise business decision to purchase a business liability insurance policy. This policy can protect a sole proprietor from unforeseen business debts.^{[10]
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4
Apply for a Florida business license, if applicable. In Florida, certain businesses are required to apply for a professional license in order to do business in the state. You can apply for your license online at the Florida Department of Business and Professional Regulation’s website. If you are unsure whether you are required to obtain a license you can contact the Department’s Customer Contact Center at 850-487-1395. The business and professions that require licenses in Florida include:
- Alcoholic Beverages and Tobacco.
- Architects.
- Asbestos Contractors and Consultants.
- Athlete Agents.
- Auctioneers.
- Barbers.
- Boxing, Kickboxing and Mixed Martial Arts.
- Building Code Administrators and Inspectors.
- Certified Public Accounting.
- Community Association Managers.
- Construction Industry.
- Cosmetology.
- Drugs, Devices and Cosmetics Program.
- Electrical and Alarm Contractors.
- Elevators and Other Conveyances, Technicians, Inspectors and Companies.
- Employee Leasing Companies.
- Geologists.
- Harbor Pilots.
- Home Inspectors.
- Hotels, Motels, Apartments and other lodging.
- Interior Design.
- Landscape Architecture.
- Mold-Related Services.
- Pari-Mutuel Wagering Facilities.
- Real Estate.
- Restaurants, Take-outs, Delivery, Caterers and Mobile Food Vendors.
- Talent Agencies.
- Veterinary Medicine.
- Yacht and Ship Brokers and Salespersons.
5
Apply for federal licenses or permits, if applicable. If your business is involved in activities that are regulated by the federal government, you may be required to apply for a federal license or permit. You would apply for the permit at the agency that regulates your particular type of business or service. 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.^{[11]
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  U.S. Small Business Administration
  U.S. government agency focused on supporting small businesses
  Go to source}

Part 3

Part 3 of 3:

Complying with Ongoing Requirements

1
Register with the Florida Department of Revenue (DOR). In order to collect business tax, you must register with the Florida DOR. The taxes that you may collect are business dependent and are impacted by whether you have any employees. Generally, most business are responsible at least some type of tax, such as sales tax or unemployment taxes
- You apply for a license to collect tax directly on the Florida DOR website, at: http://dor.myflorida.com/Pages/info_business.aspx.
- You can also request a Florida Start-up Kit for new business owners from the DOR.
- Depending on your business, you should remit all business taxes to the state on a monthly, quarterly or annual basis.^{[12]
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2
Comply with new hire requirements. 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. You must report new hires within 20 days of the individuals starting work.^{[13]
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3
Provide workers compensation insurance. Under Florida law, if you employ 4 or more people you must provide workers compensation insurance to your employees.^{[14]
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4
Meet your federal tax obligations. As a sole proprietor you may be required to file a number of tax documents with the IRS including an Income Tax Return. You can download any forms that you may require from the IRS’ website. 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.^{[15]
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  Internal Revenue Service
  U.S. government agency in charge of managing the Federal Tax Code
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