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hi folks in this video i'm going to show you how to create your own corporation or llc in the state of florida now you will notice that i have in parts of the video i have a beard and a different hairstyle it's because i recorded this in two different instances first i created a corporation in florida or the llc and then i waited for that corporation to be approved then i went back and applied for my tax id i made some updates to the corporation and you will notice that through the video let's get started so the first step is to go to the florida department of state website specifically in the division of corporations the domain name for that is sunbiz dot o-r-g i'll put that in the description so once we're in the division of corporations on the zombies website we're gonna click here where it says search records and the first thing you want to do before creating the llc or corporation is to make sure that there isn't another business already with a similar name because the state will decline your application to create the new business so i'm going to go here in the search for records and i'm going to click on name and then i want to search for uh company names that might possibly have similar names so my the business i'm trying to create is called qbk tax services so i'm gonna go ahead and put that into the entity search box and click on search now and then i'm gonna see what's in there so it doesn't seem to be anything with qbk on it with those three letters so we might be safe uh let's see if there's something similar like maybe possibly qb tax services without the k i'll click on search and nothing with qb tax or qbk tax so it's not a guarantee that the name itself will be uh approved but so far so good doesn't seem like any of the um the the other companies have a similar name so i'm going to go back into the division of corporations website i'm going to start with the process of actually creating the company so i'm going to go back to the home page of sunbiz and then i'm going to click here where it says start a business and you have some general information type of business of entity structures and then you're going to see the option that says start e-filing based on what you want to do if you want to set up an llc you would pick limited liability company if you want a c corp or an s corp you would pick this one that says profit corporation now from the state of florida perspective a c corp or an s corp is really the same it's a corporation or incorporated inc and the s corporation status it's an irs only type of election and this is really the advantage of working with a cpa or a professional that can help you navigate all those questions in terms of which one is better for tax purposes llc corporation or s-corporation and there isn't a simple answer that's this one's better than the other it all depends on how big the business is going to be how many partners you're gonna have and the type of legal structure that you want and i'm not a lawyer so i can't speak to legal structure i can only speak to tax structure for the time being i'm just gonna let you know i'm gonna set up a corporation and i'll do an entirely different video explaining which one you choose based on your circumstances llc corporation as corporation whatever happens to be so i'm going to click here where it says profit corporation to create the corporation i'll click on profit corporation and then on the first on the next page you get a couple of links here for instructions for simplicity's sake i know how to do this so i'm just going to go ahead and start the process i'm going to click on the big button i'm just going to click on the big button that says file or correct florida for profit articles click on that and the process will be exactly the same whether it's an llc or a corporation okay so so i'm going to show you corporation but llc would be the exact same thing then i'm going to click here where it says file articles or corporation click on this on the check box that says i have a read and acknowledge the terms you should be clicking on the terms and you should be reading the terms and agreeing with that before moving forward and then i'm going to go ahead and click on start new filing that would be the next process then it's going to ask me all the details about the corporation so i'm going to start with the effective date this is the date that i'm incorporating essentially so this will be 1 0 5 20 21 and then is asking you do you want to also order a certificate of status or a certified copy sometimes investors and banks and stuff like that would ask for that i don't need that so i'm just going to pay the required fee of 70 to register the corporation then afterwards i have to pay an annual fee to renew it and keep it active which is currently accidentally this video 150 a year consequently corporate name this is what i'm going to put qbk tax services and then i could put a corporation if i want to i can put incorporated i can put corp or i can put inc i'm going to put uh inc in this case simplify it just uh qbk tax services inc then corporate stock shares now generally speaking if you haven't had an agreement with all the owners partners or investors in terms of how many shares each person has you start with a simple number like 100 or a thousand or ten thousand or a hundred thousand right just to kind of simplify the process this is gonna be owned by me and me only so i'm just gonna put a hundred shares and i'm gonna own all hundred shares that's the legal portion of uh of deciding how to structure a company and i can't provide advice from a legal perspective but in order to simplify things let's assume that uh that number will represent the percentage and then once you figure out who's going to own what then just put a number there that represents uh the whole number of all the stock that everybody is going to owe so if you got three owners or and two are going to have let's say forty percent and forty percent and one is gonna have 20 you can put a hundred shares and then in your internal agreement of who owns what stock when you print your stock certificates you will do 40 for owner one 44 owner two and 20 for owner three so you just want to make sure that whatever you're printing as a stock certificate of ownership of that corporation or llc if you're doing membership interest certificates that when you that legal document is going to match whatever you're reporting to the state which is the whole number of shares that are available you might need an accountant or a lawyer to kind of talk through all these things but in a nutshell that's what it means then we got the principal uh place a residence i mean a place of business so i'm gonna put the address of my office so just type that in there and then it says mailing address in this case my mailing address and my form my formal address or my business address is going to be the same so i'm going to click on the little check box and make it the same then it's going to ask me who is your registered agent so that if you're going to have a different person other than the owner or or a manager or representative be the point person for all things florida department of revenue uh related or florida department of state division of corporations related or possibly if the business gets sued who gets a copy of this in from of that information that's the role of the registered agent you can click on what is a registered agent on there and then i'll have a little pop-up explaining what are the roles of that register agent in this case i'm the owner and the register agent at the same time so i'm just going to put my personal name here okay all right and then i'll skip business to serve as register agent because it's not a business the one that is a registered agent it is myself then on the address i'm going to put the address of the get registered agent which happens to be the same address that the business has so i'll keep that in there and then register agent signature i'll put there just hector garcia that's it i'm electronically signing for that then it says look uh where uh who is going to get the uh the notice uh that you have to pay the annual fee for 150 and possibly pay a late fee if you don't file it on time who's going to get that who is the incorporator so in this case i'm treating the register agent and the incorporator as the same so i'm just going to put my same information there again it's all the same person per se so we have myself as a registered agent and myself as incorporated perfect and i'll also sign us the incorporator so again you could have um an incorporator that's different than the register agent that's also different than the owners or the or the corporate officers then it says what is the corporate purpose so you have two options here once you can type here what the business does so we can call it professional tax preparation and then basically you're gonna set in stone what is the legal capacity of that business i don't know if there's a specific lingo you have to use in here or if just writing natural english is good enough i'm not a lawyer but i generally almost never actually type in what the business does i'll hit this checkbox that says all and any lawful business because if i don't know exactly what i'm going to do or maybe do other services i just want to my company to serve in capacity of being able to do anything that's legal basically then we're going to go down here it says correspondence email and name so i'll put here my email address um as well so this is the person that's going to actually get the email letting them know that you have to um uh update the company pay the annual fees that sort of thing that's a contact person the official contact person all right now we're gonna talk about the officers or directors so i am the president so i'm gonna put myself as the president i'm going to put p and i'll put my name here as the president and then i'm going to put my uh the address so usually you'll put the address off the director in this case i'm putting the same address off um of the business but a lot of people will put their personal address in there like their home residence and then we're gonna have another uh director here i'm gonna put vice president and then i'm gonna put a different person right who's the manager of the business and i'm going to put let's put andrea here and let's also put the same address okay perfect so we have we have hector as the president okay that's perfect we have uh andrea as the vp and then i don't need a third person here i'll just delete that okay um that's good okay so i got my two officers present and vice president with their addresses let me put u.s here as the country and let's see what else we have down here okay nothing else okay and if you actually have a business itself be a a director or an officer of the base of the business so a business being a director of a business you would put that in there by the way this is not ownership this doesn't mean ownership this is just the officers right you can have a private document that explains who the owners are we talked about that that is done through cert stock certificates and that's more of a legal question than an accounting question i'm not going to get into that but from the purposes of the state to be officially a corporation registered as a corporation this is the process that you take and you register your officers only which could also happen to be owners but in this case uh it doesn't matter where we're disclosing where the officers are make sure that you put this right because when you go open a bank account uh they're going to want to require that the officers sign on those or at least one officer signs or is present when opening a bank account so you got to make sure that you put people there that are going to be the ones dealing with all the money and the banking and the official point of contacts for any context of the business then i'm going to go ahead go ahead and click on continue and then it's going to ask me to review really quick you got the start date the business name the number of shares principal area or residence principle place of business sorry register agent and the registered agent's contact information incorporator name a corporate purpose contact person and officers and directors and then we hit continue okay then then it gives me a document tracking number i would print this page or save it okay so let me save this as a pdf here save it in my computer somewhere just in case you have an issue in the process you know exactly what the document tracking number is and you know um that's your reference number if you need to talk directly with the state because maybe there's an issue getting your corporation done then we're going to hit and continue okay then it's going to ask you for form a payment i'm just going to put credit card payment and enter my credit card information so after enter my credit card and billing information i'm going to hit continue you're going to give it a second for it to summarize the payment you're going to review the payment and then you have to press one more button which is a process payment we're going to click on process payment and that's done there's your receipt now this doesn't mean that business is incorporated already it means that they have processed your request and they have received your payment so i'm also going to save that receipt and then click on finish and and that's it that's the process of setting up the corporation now once uh the the corporation it's approved by the state you're gonna get an email uh that you know by the way this company is officially set up and at that point you will know you have the official capacity to uh to to work as that business if there's a problem you might get an email stating that problem if there's a delay of some sort or additional questions that's all going to be done via email you can also call the department of state division of corporations and discuss that with them if you want to double check what that looks like we're going to click here where it says search records and we're going to click on search records and then we're going to click on name and then we're going to search for the company name and then hopefully once and i'm doing this sort of immediately after i applied so this is not going to show up yet once i do a search that company should show up in your search you can look at it and you can officially see that the company was set up so the next step is we're going to go into google and we are going to search new e i n and that's it you could type the word irs you're going to scroll down until you find the irs.gov website that says apply for an employer identification number in this page you're going to read all the instructions make sure you understand what responsible party means you have a limit to one ein per day in the application you're gonna read through all that and click on apply online now okay so the next page uh tells you um about the ein assistant there's a whole bunch of additional instructions once you read through that and you understand exactly what all this stuff means or or what your responsibilities are terms and conditions you're going to read through all that make sure you understand it and you're going to click on begin application so we'll start by choosing our legal entity we got sole proprietor we have partnerships we have corporations which includes c and s corporations llc then we have other things like state trusts and you have an option to view additional as well for this example we're going to go go ahead and choose corporations because my intent is to set up an s corporation for this entity and click on continue then it's going to ask me a more detailed question is it a corporation a regular c corporation is it an s corporation sub chapter s corporation uh and then you got all the options like personal service company we'll ignore that select s corporation and then click on continue i'll have another video while i explain yes corporation but that for now just just follow along then it tells you that after this you must file an additional form form2553 to elect the s-corp status so i created the corporation and i asked for an ein but later on i'm going to do that so i'm going to hit continue and go to the next page where it's going to ask me why are you getting an ein so you can go through them the one that makes the most sense for you in my case i'm gonna do start a new business because it's the most common one and then hit continue then i start with the personal information so i'm the responsible party i'm gonna put my name my last name i'm gonna put my um my social security number in there and i'm applying as a responsible party not necessarily the owner but i also happen to be the owner and then it's gonna ask me are you the president ceo or corporate officer or are you a third party and then you you pick the two options there so in this case i'm an owner corporate officer everything else so i'm going to go ahead and choose that and hit continue then it's asking me for the legal address of the business the physical address of the business so i'll start by typing my my physical address so i'll put the address there and then um if i want that company uh mail that official corporate mail to also go with my name to say company name to the care of hector or whatever i'll put that in there and then if i don't have a different address i can hit continue if there are errors in the field for example irs doesn't allow commas dots hyphens that sort of thing so i got rid of that and i'll let's just try unit 134 okay perfect and then i'm going to go ahead and hit continue okay then it's going to ask me hey we checked with the usps and for the official address and i'm going to accept their version because it actually happens to be more accurate then it's going to ask me the big question which is what is the name of the corporation so i'll put qbk tax services which is the name of the corporation we set up in florida i'm putting comma inc here because uh that's the official legal name uh but um you have to just be aware that if you're a corporation you'll be inc or corp if you're an llc it would be llc and i think the irs doesn't accept commas so i'm gonna skip the comma in this case and it will just do cubic attack services inc and if i have a dba doing business as a trade name i would just put that in there not required but if you happen to have a trade name as well you put that in there you pick the state that it was incorporated in you you picked the state in which it was incorporated or operates and then we put the date and the year that the business officially started and we hit continue there's actually a couple questions like you know is does your business deal with highway motor vehicle right of more than 55 000 pounds or whatever so i'm gonna put no uh to that first one because that doesn't happen to me but you want to read through them you know do we do gambling well no uh are we doing excise tax returns well no uh do we do um manufacture alcohol tobacco firearms now another question about employees do you have or expect to have employees in the next year and then if you do you want to put yes because you also want to apply to be an employer so we're going to hit continue and then we're going to on the next page we're going to fill out all the information about us as an employer as a future employer and if you put the no there that's okay you can always apply to be an employer later on by creating an eftps account which is how you pay taxes electronically but for now we're just basically letting the irs know yes we are going to have employees yes we expect to have employees so um you know so expect a w-2 you know from us a 941 all the payroll tax forms all right the next page this is where it's asking me about my wages or future wages so let's say i'm i'm planning to pay wages towards the end of the year or the middle of the year whatever happens to be some this is when i plan to pay okay so i start putting that there or let's just push it out to like october uh or even december like you basically this is an estimate they're not gonna hold you to it um so we're gonna put the number of employees okay um in here uh which you you have to choose a number of agricultural employees or or regular employees and then we hit continue then it says what does your business organization do so we go through all the different industries and you want to try to find the one that best fits you um you know maybe maybe in our case we could be finance it gets really tough accounting is actually doesn't fit into any of these this is for a tax firm that i'm creating so you want to pick the one that's best if you can't quite figure it out you can click on other and see if there's more options on the other and then hit continue and you will notice that you will see things like consulting manufacturing all things and then if if yours actually fits any of them you can just uh pick one of those the one that makes the most sense for you again you have to do your best here there's no right or wrong just hopefully you'll get it right um and again consulting works for most service companies uh but in my case i'm gonna click other and just type it in there tax preparation services again i'm not afraid if i got it wrong i could manually type it in there and that's good enough for me so we're going to hit continue okay and you got the option to either request it by mail or get the ein letter immediately online of course i'm going to choose that we want online we want now so we'll hit continue then it takes us to a summary right so just going through making sure that it's correct you want to check that all the information it's accurate addresses social security numbers or the last four digits anyway how many employees you plan to have you know type of company what you do what you don't do and then we're gonna hit submit okay we immediately got a tax id it's on the screen i can print it on the screen actually you should print this screen but down here it says click here for ein information you click on that it's actually going to download a pdf into your computer and you want to save this file don't lose it this is an official document that proves that your company it's registered with irs and it has a a tax id ein i'm just going to call it by the company name right and then just save it in my computer obviously put that in a safe place your bank is going to ask for this somebody asking for a loan may ask for this government entities you're contracting with me ask for this so you definitely want to have this information handy we're going to hit continue and then that finishes the process and that's it we officially have our ein our tax id number for our new uh corporation so we can actually file a tax return we can actually employ people officially we can open a bank account that ein number is going to be probably the most important document when you first create the company so you can report all your tax returns and all your official activities with the government okay so it actually took a couple of weeks sometimes it takes two days sometimes it could take a couple of weeks for the corporation to be officially set up by the state so i got an email here confirming your articles of incorporation for qbk tax services were filed on january 25th so obviously three weeks in this case and then it gives you some instructions kind of reminding you to renew the company every year because in florida you have to do an annual renewal and pay for that and i have a different video that explains that process i'll put it in the description somewhere and here is my document number so this is my official uh document number in which i can use to find the company information in the zombies website let's go to it let me go to sunbase.org which will take me to the division of corporations i'm going to click on search records i can either search by name or by document number let's try by name i'm not sure why that wasn't working okay and then we'll put here qbk tax services in the search go to search now and there it is uh qbk tax services inc i can click on that there's the company document number file date it's active principal address register agent officer 1 officer 2. it's pretty clear down here where it says domestic profit i can click on view pdf image and this is called the articles of incorporation this is the standard stuff that gets filed by the by the state if you do this with an attorney most attorneys draft their own articles of incorporation and they include a lot more details about what the company can do and can do and that sort of thing that's kind of one of the benefits of going with an attorney if you don't go with an attorney it's pretty much plain vanilla template based articles of incorporation now one thing you'll notice is my tax id is not here my ein is not here and that's because in the order that we did this we set up the florida corporation first then required then requested the ein or the tax id that's why we never enter the tax id at the beginning so only when you request a tax id first and then do the corporation second that's when you can enter the tax id during the application process but that's not the order in which we do things generally my recommendation is set up the company first make sure that i uh the state confirms that the company exists that has been registered that the name is good then request a tax id and then you go back to here and update that let me go don't remember exactly what's uh let me do some biz again and i think it's here under manage change existing business let's click on that and update your information that's the one update your information and then down here it says federal employer tax id so we'll click on that pretty simple so we'll type here qbk let me just go back to the search again i'm just going to copy and paste that might be easier so qbk tax services go ahead and paste that and then what's our state document number let's go back here copy this paste that here an email address for contact okay so i got documented email address and then what is the new tax id so we got a pdf file that we received when we registered it here we go copy this okay and paste that in here beautiful i'm not a robot yes okay verify good okay so now we click on submit now the next thing i want to show you is how to request to convert the corporation to an s-corporation in the eyes of the irs so even though when we applied for the ein tax id we selected that we want it to be an s-corporation it doesn't happen automatically so in order to do that you're going to go into google and you're going to type form 2553 okay just go to form2553 and you download the form okay now what you need to do in this form is you need to fill it out immediately after you set up your corporation to convert your corporation into an s type of corporation so to do that we're going to put the company name here then we type the ein number date incorporated so we go back to that original email which says effective on january 20th so we're going to match the states 20 2021 and the address state of incorporation florida am i doing anything has to do with um a change in name or address so the answer is no election to be effective tax year so in this case i'm going to put the tax here so i'll put 0 1 0 1 20 21 so basically it means that i want the first tax here with an effective calendar date um to be the one that gets up up so basically what i want is to be taxed as an s corporation from the get go so i'll just put 1 1 20 21 and then it says what tax year would you like to select i'm going to select calendar year so i don't want a specific fiscal year if you want to change your to uh your taxability to a fiscal year you would do this at this point then we got the name and title of the representative supporter hector garcia president okay and then my phone number okay then it says if you're fighting late is there a reasonable cause for you fighting late i'm not fighting late because i'm filing on time um if you are doing late filings you need to google what are the type of things that you would type in here but this is a timely filing that we're doing immediately one thing here on the name i just noticed i didn't put ink let me put that there as well so i'm gonna scroll down and right here it's a signature officer once you print this that's where you would sign and put your title and then put your date then on the name and address of each officer i'm going to put both of our names here with address and then officer 2 okay so percentage ownership let's say this is a 50 50. super 5050 data acquired would be when you acquired the company's shares okay so in this case it would be 0 1 20 20 21 which is pretty much when we created the company so 01 20 21 and i'm gonna put percent here just to make sure there's no confusion so then once we're done with this like um we're gonna type in the social security number of each of the officers or the owners in this case okay so just make up the numbers here okay and then what is the tax here of each of the individual taxpayers that goes in the box next to it it's not letting me type it in there but then you would put it's letting me know so 12 30 and then 12 30. uh actually what am i doing not 30 31 so 12 31 12 31 okay that means uh i my end my individual tax year for each of the taxpayer ends at the end of the year then we print it and you're going to sign and date it i can't type it so these two boxes signature and data needs to be done manually and then i'm going to scroll down and there's a coup a couple extra boxes here so this is if you're doing a fiscal year which we're doing so we're going to skip that and we're going to come down here and we're not a qualified sub chapter as trust so we can't we don't have to put anything uh in there either okay so we just um so we could just skip that part three so part two and part three is not necessarily we do need a part one with the names socials and percentage ownership of each of the officers and um and all the information that comes in here so really quick um just a couple of rules around s corporations is you can have more than 100 shareholders and all the shareholders need to be u.s persons and you can only convert to an s-corporation straight with the form 2553 if you originally incorporated as a corporation so if you incorporate it as an llc and you want to be taxed as an s corporation you need to file the 2553 plus you need to file another form called the 88 32 which is a different uh form altogether so usually just kind of file both both of them back to back so here's form 8832 it will tell you here depending on the form that you're filing 8832 and the state that you're in which is going to be the address that you're going to send this to so in my case i'm a florida corporation i'll be sending this one to utah so again the 8832 that's only if you set up an llc and you want to be taxed as a corporation or an s corporation if you want to be an llc taxed as a corporation you will file form 8832 if you want to be an llc tax as an s corporation you will file both the 8832 and the form 2553 which i are showing you how to fill out so up here pretty self-explanatory the name of the company address tax id we're not doing a late election in this case because we're doing it right timely so we'll skip that part then on box on part one box one we're going to put a which is the initial classification of a new company and then for tube a we can skip that because of the nature of what we've done and then we're going to go to three which is is there more than one owner and if you put yes it tells you you can be either you can be a partnership or you can be a a corporation if you put no it tells you hey you can either be a corporation or a disregarded entity which means you don't need to file a separate tax return so in this case we're gonna put yes but uh for the purposes of an s corporation it doesn't matter if it's one or two owners or three or up to a hundred um um you doesn't matter what you put in the answer here you can still convert it to an s corp so i'm gonna put yes there's more than one owner and if there was in fact just one owner here on uh error four you would have to put the owner's name and their uh social security number because the irs wants to know that this llc that you're possibly classifying as a disregarded entity as it says her uh whose personal tax return they need to be looking at that llc's return now you can use the 8832 to convert the llc from a disregarded entity to a partnership or to a corporation the exercise that we're doing specifically now is to convert it to a corporation so we can also file the 2553 to convert it to an s corporation so here number five is if one of the owners is another company is another corporation uh you would have to identify identify that or at least the main one or the parent one and then we're gonna go down here to six which is type of entity for the purposes of converting an llc to an s corporation we would select the first one which is basically converting it to a corporation and the 2553 we do would finish the job basically into the s corporation so the 8832 converts it to a c corporation the 2553 converts it to an s corporation if you already set up the company as a corporation period you don't have to go to this form because you don't have to convert anything and then down here it says you know if the company is foreign foreign jurisdiction you would put that election effective date you were put there the first day of the business in that case a 1 20 21 whatever happens to be 120 21 and then the name and title of the contact person so put there my name okay and then the phone number okay and then every corporate officer will need to sign date and put a title there okay so everybody that's a president vice president anybody has an officer i mean he says it right here um or in the instructions they'll say exactly who the who the officers are and then if you are scrolling down a little bit if you're filing this late then you would put an explanation to why you're filing late again for the context of this video we're not filing late and then another set of signatures same exact signatures for uh the late uh relief portion of the of the selection then down here there's some general instructions you can check them out and that's the 88 32 form in a nutshell again to avoid any confusion if you set up as a corporation with an inc or a corp in your state in this case florida but in any state that you're in you only need to do the form 2553 to convert to an s corp and if you file it as an llc you got to do both the 8832 and the 2553 back to back so you can do a conversion and then an s election now why you would do that i would refer you to your accountant i will put some videos below in terms of the advantages of an s corporation there are some pros and cons to doing that but it's a very common question that we get is good follow-through after we set up the the corporation or the llc wanting to be taxed as an as a as an s corporation anyway my recommendation in general is to get this done by a professional attorney accountant uh someone that would not just set up the corporation for you and select the right tax entity you also want someone to draft the documents that that entails the relationship between the parties especially when there's more than one owner it is really important to have documents in place that explain and give a pathway to um to you know dealing with disagreements or you know authorizing specific owners or directors to be doing certain things in behalf of the company a lot of a lot of these things that i'm saying are with within the context of legality or it's a legal thing and as an accountant i can't give any legal advice the only generic legal advice i'm giving you is seek professional legal advice um and this video is only intended for people that feel savvy enough that they can set up their own corporation at least the sun-based part the florida part and the couple of these forms this stuff is really not that complicated if you do it wrong you could have some tax repercussions of course on the irs side um but a lot of people set up their own company so they don't need to pay someone a couple hundred bucks or a couple thousand dollars to set up the company for them i believe the value on the accountant is on the entity selection or the tax entity selection and doing the analysis on whether or not a c corp and s corp or a partnership it's better for you in terms of the general composition and tax treatment of the company and then where legal advice could come in handy is setting up these contracts and agreements for all the business that you will be engaging in anyway um there's my email below so if you need to contact me or ask me a question again i can't give legal advice i can only give tax advice you can contact me there i hope you enjoy this and i'll see you on the next one and by the way if you're a small business owner starting a business for the first time and this video is the one that helped you start your business i am so glad i was the first professional you seeked out in your journey and best of luck uh to your to you and your business thanks