Incorporating Inexpensively in Florida

Need to form a corporation in Florida for the lowest possible cost? Well, here are four tips for reducing the costs of incorporation in the sunshine state:

Cost Saving Idea #1: Consider NOT Incorporating

It might seem like an odd thing to think about, but it's possible that not incorporating your business is a reasonable way to save money.

Incorporating a business absolutely reduces the liability of the business owners. And in some cases, incorporating saves taxes. But incorporating a small business also adds costs and complexity even after you do or pay someone else to do the setup work. Your new corporation will require its own annual tax return, for example. You will probably need to set up a payroll accounting system. And then, of course, your new corporation will also be burdened with a bunch of bureaucratic busyness like shareholder meetings, boards of directors fussing about, and corporate officer elections.

Very small business ventures may not be able to justify the extra cost and complexity. Rather, such firms may just need to be more careful and accept the extra risks associated with operating as a sole proprietorship. Another related thing to look into is the option of trying to get extra liability insurance. Insurance may sometimes provide the protection you need but at a more reasonable cost.

Note: Later incorporating an existing business is usually very easy and tax-free.

Cost Saving Idea #2: Opt for a Florida LLC Instead

Another option to consider if you're mulling over the idea of incorporation? Perhaps you shouldn't incorporate. Perhaps you should instead form a limited liability company.

Yes, Florida charges more for setting up LLCs than it charges for setting up corporations ($100 versus $35 at the time of this writing.) But an LLC often costs less after setup for small businesses because you may be able to avoid preparing corporation and payroll tax returns for the LLC. How can this be? Well, with a limited liability company, you can often just report the business's income and deductions inside your personal tax return.

This "easier tax return preparation" angle is significant. Paying a local accountant to prepare an annual corporate tax return will probably run several hundred dollars--at least. And with a corporation, you may also increase your payroll return processing costs and your payroll taxes.

Note: A Florida limited liability company should offer you legal protection that's just as good as the protection offered by a Florida corporation. The state legislature designed LLCs this way.

Cost Saving Idea #3: Consider Do-it-yourself Incorporation

Another money-saver: Take a look at the pre-printed Florida incorporation forms (available at the Florida Secretary of State's sunbiz dot org web site) and see if you'd feel comfortable preparing the simple articles of incorporation form yourself.

With the state's pre-printed form, you just fill in the blanks. You plug the corporation name you want to use into the "Name" box. And you plug the corporation's address into the "Principal Office" box.

If you can fill out the very simple, standard Florida form, you'll have saved yourself several hundred dollars of setup costs--at least.

Tip: You'll also need sample corporation by-laws for your new corporation. You can buy these over the Internet from web sites that supply boilerplate legal documents or incorporation kits.

Cost Saving Idea #4: Be Your Own Registered Agent

A final cost saving idea. Rather than pay some third party to collect your mail and accept legal notices, you can agree to be your own registered agent. The job of being a registered agent is one of the easiest jobs in the world. There's no reason to pay someone $100 or $200 a year (or more) for the work.

Note: You must reside in Florida and be able to provide a street address in order to act as your own registered agent.

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