How to Form an S Corporation in Florida

Forming an S Corporation in Florida is similiar to forming a regular corporation.

An S Corporation is a special type of corporation that combines liability features of a corporation with favorable tax regulation. An S Corporation is technically the same as a regular corporation in the eyes of the state in which it is incorporated. The distinction comes from the Internal Revenue Service (IRS) granting a corporation sub-chapter or S Corporation status. Forming an S Corporation in Florida has many of the same steps as forming a regular corporation. This process is simple, but things become more complex after you've incorporated in Florida and need to apply for S Corporation status from the IRS.

Instructions

1. Read the rules and regulations about business incorporation and regulation in Florida at sunbiz.org, Florida's Department of State Division of Corporations website. The documents are located at the Florida Business Registration section. Download, print and read the Florida Articles of Incorporation form.

2. Provide on the incorporation form the name of the corporation, the Address of the principal office, a statement of purpose for the corporation, the number of shares of stock in existance, a list of the initial officers and/or directors, the name of the registered agent and the name of the incorporator if you used one. After sending in your completed incorporation form along with the required fee ($70 in 2010), you will receive confirmation from the Florida Division of Corporations that your corporation has been formed. Only then can you proceed with applying for S Corporation status from the IRS.

3. Obtain documented consent from the shareholders of your corporation that they approve of seeking S Corporation status. The most common way of doing this is to hold a vote during one of your board meetings and documenting the results of the vote in the minutes for that meeting. Maintaining records of all board meeting activities is a mandatory part of running a corporation. You cannot apply for S Corporation status unless you have at least 75 shareholders and no more than 100, so structure your corporation accordingly.

4. Apply for and receive a Federal Employer Identification Number if you do not already have one. The application is simple and only requires your Social Security number and basic contact information

5. Download and print IRS form 2553 for election to become an S Corporation. The form asks some very detailed questions about the shareholders of your corporation and the distribution of stock ownership. It also requires the signature of all shareholders. Most applicants will find it useful to involve an attorney at this point because of the detailed nature of the questions, although it is not necessary. Once you complete the application, mail it to the following address:

   Department of the Treasury
   Internal Revenue Service Center
   Cincinnati, OH 45999

Tips & Warnings

• Bookmark the IRS webpage for S Corporations for easy access to the information and forms you will need to maintain proper governance and tax compliance moving forward.

• Considering the many different requirements for S Corp status, considering working with a professional incorporation service. There are also many online services that will counsel you and file the forms on your behalf for a fee.

• To qualify for S Corporation status, the IRS requires that your corporation must be a domestic corporation and have only allowable shareholders. This includes individuals, certain trusts, and estates. It may not include partnerships, corporations or non-resident alien shareholders. The corporation must also have no more than 100 shareholders, have one class of stock, and not be an ineligible corporation. The latter includes certain financial institutions, insurance companies and domestic international sales corporations.

References

• Corporations Division of Florida: Florida Corporation Types and Advantages of Each
• Internal Revenue Service: S Corporations