Florida S Corporation Filing Requirements: Everything to Know
The state of Florida accepts the IRS' S corporation election, so you do not have to file a state-level form to be recognized as an S corporation.3 min read
What Are Florida S Corporation Filing Requirements?
The Florida S Corporation filing requirements make it easy for companies to be an S corporation because the state of Florida does not assess an individual income tax. For a company that elects to become an S corporation, it can help shareholders avoid double taxation, since shareholders of regular corporations pay income tax on their dividends that have already been subjected to corporate taxes. The state of Florida accepts the IRS' S corporation election, so you do not have to file a state-level form to be recognized as an S corporation.
Advantages of Florida S Corporations
- Unlike other business structures, such as sole proprietorships that end with the death of its owner, Florida S corporations can continue operation after the death of a stockholder.
- It is easy to offer fractional ownership shares with S corporations.
- Stock can be transferred without impacting business operations, through purchases, inheritances, and gifting.
- S corporations benefit from being taxed as a pass-through entity.
- S corporations provide additional liability protection for shareholders in the event that the company files for bankruptcy or is sued.
Disadvantages of Florida S Corporations
- Some financial lenders require personal guarantees from business leaders, which limits the financial liability protection shareholders get from the S designation.
- Having stockholders may lead to more conflict than businesses owned by a single person or small group.
Frequently Asked Questions About Florida S Corporation Filing Requirements
When filing an S Corp in Florida, what information is needed?
S Corporations in Florida have a series of documents that must be included in their corporate records. These documents include:
- The company's Articles of Incorporation, as well as any amendments filed at any time during the company's history.
- A copy of the Bylaws and any amendments to them.
- A copy of the minutes from every director and/or shareholder meeting within three years.
- Information related to the creation of stock classes for the company, including any resolutions by the Board regarding stocks.
- Detailed lists of shareholder and director actions that did not involve a meeting that took place in the last year.
- Copies of any written communication sent to shareholders within the last three years.
- The company's current Annual Report.
- An alphabetical list of the company's shareholders including the number of shares each person owns.
- A communications list for the company's current leadership team that includes their full names and business addresses.
Who files to become an S Corp?
For the most part, S Corps are formed by new corporations or C Corporations looking to become S Corps. Other business forms like LLCs and Partnerships don't have a reason to become S Corps since they already receive the chief benefit of becoming one. These business forms all avoid the double-taxation problem that C Corporations experience.
In a C Corporation, the corporation's income and the shareholder-employee's income are both taxed. Essentially, the income of these entities is taxed twice, once on the company level, and again on the shareholder-employee level. This results in lower earnings by shareholder-employees. S Corporations are only taxed on the shareholder-employee level since the corporation files tax returns, but the corporation's income is not taxed.
What are the requirements for becoming an S Corporation?
To become an S Corporation, a company must file Form 2553 and pay the fee while meeting the following criteria:
- The company only has one class of stock.
- The company must qualify as a small business having no more than 100 shareholders.
- All shareholders must be domestic, meaning that they cannot be nonresident aliens.
- Shareholders cannot be estates or trusts, meaning that there has to be an individual that owns the stock rather than their related business entity.
Florida S Corporation Filing Requirements
1. Become a corporation in the State of Florida.
2. File the Form 2553 with the IRS.
3. File an annual report due by May 1. There is a fee of $150 to file the report.
4. Pay franchise taxes to the State of Florida by the last day of the 4th, 6th, 9th, and 12th months based on the company's annual net income.
5. S corporation issues Schedule K-1 to shareholders.
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