How to Form an S Corp. in Florida

By Stephanie Kurose, J.D.

How to Form an S Corp. in Florida

By Stephanie Kurose, J.D.

Corporations that meet certain requirements can choose to be considered an S corporation, or S corp., by the Internal Revenue Service (IRS) for federal tax purposes. The name comes from Subchapter S of Chapter 1 of the Internal Revenue Code. A corporation that has fewer than 100 individual shareholders, has only one class of stock, and is owned by U.S. citizens or residents may be eligible to file for S corp. status.

Businesswoman smiling and holding laptop

Taxation Benefits of an S Corporation

The biggest benefits of electing S corp. status with the IRS is that S corporations only have to file taxes on a yearly (rather than quarterly) basis and are not subject to double taxation. S corporations are only taxed once at the dividend level as opposed to twice—once as corporate income and once as dividend income—like other corporations. S corp. shareholders simply include their portion of the business's income on their personal tax returns. This is a huge perk and why many corporations choose S corp. status. Eliminating double taxation can save a corporation hundreds of thousands of dollars per year.

S corporations are, however, more closely scrutinized by the IRS, so any mistake in accounting can result in a company losing its S corp. status. It also limits the ownership to 100 shareholders, limiting the ability of the corporation to grow.

Forming an S Corporation in Florida

The process for forming an S corp. in Florida is simple. Follow these two steps:

1. Incorporate as a C corporation.

Because every S corporation starts out as a regular C corporation, the first step of creating an S corp. is to properly incorporate the business in Florida. To do this, the owners must file Articles of Incorporation, sometimes known as Articles of Organization, with the Florida Department of State, Division of Corporations. The Articles of Incorporation must include pertinent information, including but not limited to:

  • Name and address of the corporation
  • The corporation's purpose
  • The number of shares the corporation may issue
  • The name and contact information of the registered agent

The owners can either file the Articles of Incorporation electronically or mail the form to the Florida Department of State and include the applicable fee.

2. Elect S corporation status with the IRS.

Once a business is incorporated, and as long as it meets the requirements, it can make the S corp. election at any time. It is important to note, however, that all shareholders must unanimously agree to this new status. If there is not unanimous consent, the corporation will not be able to convert to an S corp.

Assuming the decision is unanimous, the owners must file Election by a Small Business Corporation (Form 2553) with the IRS. Form 2553 requires basic information about the corporation, such as the name, employer identification number, and the state of incorporation. Every shareholder must sign this form.

Electing S corp. status is very attractive to many types of businesses all over the U.S. It is especially popular with small businesses because they can easily meet the S corporation requirements and because it saves them money.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.