What is Small Business
A Small Business is an independently-owned and operated commercial entity that has a relatively small customer base, market share, revenue inflow, sales, net profits, and asset base. They include such businesses are barber shops, restaurants, unit shops, hair salons, photography shops e.t.c. Their small size notwithstanding, their contribution to the overall Gross Domestic Product of the economy cannot be overemphasized given the facts that they are usually largely locally-owned, are the combined largest employers of any economy besides being relatively easier to open and operate.
Forms of Ownership
They can be owned in three main forms namely: Limited Liability in which case the proprietors are legally liable for any debts or liabilities up to the extent of their claim of ownership in the said business entity; Partnerships which entails joint ownership, management and operations of a single business entity; and Sole Proprietorship in which case the business entity is wholly owned by an individual who undertakes to incur any losses, liabilities, debts and profits arising out of the said business entity respectively.
Prerequisites for Registration
The US State of Florida does not only recognize the general importance of Small Businesses to its Gross State Product, but has also put in place comprehensive and business-friendly mechanisms to fast-track the incorporation, opening up and establishment of the said business entities.
In order to open a Small Business in the State of Florida, two key requirements are needed. These are: Start-up Capital and a valid Business Name. The main sources of the capital include personal savings, borrowing from banks, borrowing from investments clubs e.t.c. The Business Name can either be real or fictitious; the latter inferring the use of non-realistic names of the business owners for the purposes of conducting business. It is often referred to as “Doing Business As (DBA)”. You can use Sunbiz.org website to find out if the business name already taken by someone else.
The persons intending to open the Small Business must also be either citizens of the United States of America, or bona-fide Permanent residents or Green-card Holders. Proof of eligibility is often conducted by various agencies of both the Federal and State governments before the permission to open the Small Business is granted.
The Process of Opening a new Small Business in Florida is summarized below.
Undertaking the Florida Tax Registration
Small Businesses throughout the State of Florida are subjected to certain common taxes such as: Corporate Tax, Sales and Use Tax, Unemployment Tax, and Withholding Tax. Moreover, they can also be subjected to other taxes such as Pollutant Tax, Documentary Stamp Tax, Communications Service Tax, Fuel Tax, and Solid Waste Tax depending on the area of operations. The Florida Department of Revenue website Florida Department of Revenue has all the relevant information regarding the taxes and other fees applicable or the various types of businesses.
Obtaining the Relevant Business Licenses
Business Licenses are formal permissions granted to a business entity by the relevant state agency to authorize it to engage in a particular business activity. The failure to acquire these licenses can lead to the imposition of heavy fines on the business, the closure and even the prosecution of the business owners. Their types and costs vary largely depending on the nature of the business as well as its location in the State of Florida. Florida’s Business Licenses, Permits and Regulations page MyFlorida.com has more information regarding the requirements for the Small Business licensing in Florida.
Obtaining the Local Permits
Permits are special permissions granted by government authorities to perform certain special acts in the course of conducting its businesses. They are offered subject to the regulations set forth by the respective cities, municipalities and counties of operations. They include: Zoning, Signage, Occupational, Health, Business License and/or Tax, Building, and Alarm Permits e.t.c. A visit to the nearest local authority is necessary to ascertain the unique requirements.
As has already been stated above, Small Businesses can be owned in a variety of ways. These are Sole Proprietorship, Limited Liability, Corporations or Partnerships. Those Small Businesses that are owned by way of Corporations, Limited Liability Company and Partnerships are also required to register with the Florida Division of Corporations. The general rules and regulations governing this process are contained in the Florida Division of Corporations official website: Sunbiz.org .
Employee Eligibility Verification
Considering the fact that all Small Businesses do require labor, the eligibility of their potential workers must also be verified by the State of Florida. Three critical forms are required to verify the suitability of a potential worker to be employed in Florida. These are the W-2 Form which stipulates the wages of an employee together with his corresponding Withholding Tax which is sent to the Internal Revenue Service and the respective employee at the end of every year; W-4 Form which is basically an application that is drafted by an employee to his employer stipulating the unique circumstances that may warrant tax exemptions or change of tax status; and Form I-9 which is basically a form that seeks to ascertain the eligibility of a worker to be employed in the United States of America. These three critical pieces of information regarding employees have to be communicated to the Florida’s Directory of New Hires within twenty days of employment.
All Small Businesses in Florida are required to pay at least two mandatory insurance packages. These are: Unemployment Compensation Tax and Worker’s Compensation Insurance. Unemployment Compensation Tax are charges that are levied to the business entities by the State; and whose proceeds are channeled to the Unemployment Compensation Trust Fund and which is subsequently used to compensate workers who are able and willing to work but have no jobs. The finer details can be accessed via the portal Florida Department of Revenue. Worker’s Compensation Tax are those levied on the business entities and are used to compensate workers who are injured in line of duty. The finer details can be obtained via the website Division of Workers’ Compensation . Other than these two mandatory taxes, Small Business owners can also enroll in “Self-Insured” Scheme.
Modes of Applications
The entire process of applications, licensing, permits and registrations can be conducted through Online/Internet, Telephone, Fax or U.S. Mail. It is upon the discretion of the persons intending to open the Small Businesses to choose the most convenient means of communications.