Florida Legal Services Guide to Starting a Sole Proprietorship Business
What’s delaying your final decision to set-up a business in one of the busiest streets of Florida? Is it your lack of knowledge on the legal requirements? If you are just finding your way into the world of self-employed individuals or operating your very own small business, don’t let your lack of knowledge prevent your dream of becoming an entrepreneur turn into reality.
Florida provides many opportunities to start a business. While you may need to do a lot of groundwork to ensure a smooth flow of operations, hiring a Florida attorney may help you in setting up the proper entity and structuring your business for legal compliance and liability protections. Opening a business as a sole proprietor is seldom recommended from a legal perspective and liability protection, but we want to provide you some information on sole proprietorship businesses so you may better understand the different entities available in Florida.
Introduction to sole proprietorship
Sole proprietorship is a type of business set-up by one person, the business owner. This individual takes 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. If you opt for another name, you must comply with applicable Florida and local licensing requirements in order to operate legally and do business.
Advantages of a sole proprietorship
• Can be easily started without needing registration as long as you name the business under your own name.
• You have full control in decision making, since you are the only rightful owner of the business.
• All potential earnings of the business are yours.
Disadvantages of a sole proprietorship
• The business owner is personally liable for any debts incurred by the business. This is one of the main reason why a Florida attorney would likely not recommend you to conduct business operations as a sole proprietor.
• The business assets are subject and exposed to the personal debts of the business owner.
• A business structure as a sole proprietorship is deemed non-existent after the death of the business owner.
What are the basic requirements for a sole proprietorship?
Below is an easy-to-follow process that lawyers in Florida may suggest to all soon-to-be entrepreneurs planning to set-up a sole proprietorship business (again, while each circumstance is different, we generally do not recommend running a business as a sole proprietorship).
• Follow the procedures to register your business with the Division of Corporations of the Florida Department of State if you decide to use another name, known also as “doing business as” DBA.
• Register your business with the Internal Revenue Service (IRS) for federal taxes. Your EIN is also a requirement if you will open a separate bank account for your business’ earnings.
• Obtain any licenses required to conduct your specific type of business in Florida.
• Obtain any applicable city and/or county business licenses and local business tax receipt as it may be required where you conduct business.
• If you have intentions of hiring permanent or part-time employees for your sole proprietorship business, additional requirements may need to be followed under Federal and Florida regulations.
ABOUT THE AUTHOR: Nico Apfelbaum
Nico Apfelbaum, Esq. is the managing attorney of Apfelbaum Law, a Florida law firm serving Port St. Lucie, Stuart, the Treasure Coast and assisting clients with matters throughout Florida. Apfelbaum Law provides a wide variety of legal services, including, family law, divorces, business and contract transactions and litigation, immigration, wills and estate planning, probate law, and real estate law.
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.