How-To Set Up a New Business

Lots of people dream of owning their own business but are unsure about how to get that business off the ground.  I went with the jump right in approach and didn’t spend a lot of time research or even planning before starting Kelapo in December of 2009.  It was a Monday morning when we decided to go through with the idea that had been brewing for awhile and by Friday afternoon, all parts of the business were in place and we were moving forward and didn’t look back.

I’ve been working on setting up another business entity and forgot about all the steps that are involved with paperwork, the state, and so forth and so I thought I’d give my tips and pointers to others who are trying to figure this stuff out on their own.  These are the steps for businesses in Florida.  I’m not saying it’s an extensive complete list either, so make sure you do your own homework but this should at least get you started.  *Click on the blue links for form templates or online access to forms.

1. Shareholders or Members Agreement  If you are a partnership or LLC, you’ll need to write out the parties that are entering into the business together as owners and the amount of shares or percentages of the company that each entity owns.  Also noted, are residing addresses, titles, and signatures.

2. Articles of Organization.  Very similar to the members agreement but this is what is filed on record with the State.  There is a filing fee associated with this and is around $70.  Here you establish all registered agents (owners) of the business, your place and purpose of business, and all contact information.

3. Annual Report.  After being accepted by the state, you’ll have to file the annual report each year with the Division of Corporations to remain active.  The cost is $130.  You can file as soon as Jan 1 and as late as May 1, but my suggestion is do it sooner rather than later to avoid late fees and reinstatement fees.

4. Fictitious Names.  Fictitious names, or DBAs (doing business as), also need to be filed.  If the parent company is called Robinson Inc, and you sell branded toys under the name Johnnie’s, then you need to register Johnnie’s as your fictitious name.  Companies do this when they may have more than one brand or subsidiary of their company.  This is another $50 fee for each fictitious name registered.

5. S-Corp Election. This is an optional step for LLC’s that wish to be classified as an S-Corp for tax purposes.  The original document, Form 2553, must be mailed to the Dept of the Treasury, IRS Center, Ogden, UT 84201. (Again, this address is specific to Florida).  There is a two month period for filing within the first fiscal tax year so if you have questions, refer them to you tax accountant.

6. Federal Tax ID.  Your company’s federal tax id is essentially the same identification system for businesses as your social security number is to you.  The official name is an Employer’s Identification Number (EIN).  It will be used for payroll, taxes, business to business transactions and more.  It is an online application.

That’s probably enough to keep you busy for an afternoon!  My next post will be about all things dealing with sales and money.  I’ll talk bank accounts, sales and use tax, merchant accounts, and more!