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Buying a Florida Business: Checklist

Buying a Florida Business

This information is for people thinking of buying a Florida business. As in all states, there are legalities and regulations to follow in order to buy and run a Florida business. Although it is impossible to list of everything a prospective business buyer will need to do to acquire an existing Florida business.

Existing Florida Business

Every type of business is unique and has its own requirements. A prospective buyer of an existing Florida business should work with a business broker, consult with an attorney and CPA and work with the seller. This list should provide you with prompts to do research for due diligence and to become an owner of a successful Florida business.

Requirements

Once you’ve committed to buying a Florida business, there is a lot to do, depending on the type, size and complexity of the business. Some variations may be needed according to the buyer’s requirements and the legal requirements necessary buying a Florida business.

Even though most business sellers are very helpful in the transfer of the business, it is up to the prospective buyer to take the appropriate actions and make sure they meet all legal requirements before buying a Florida business.

The following items may need to be completed prior to buying a Florida business.

  • Attorney Consultation: to learn the proper legal structure of the business you want to purchase as well as ways to reduce personal liability. The most common legal structures for buying a Florida business are Subchapter-S Corporation and Limited Liability Company (LLC).
  • Choose a name for the business and find out if you need to register it. Business owners in Florida who conduct business under a name that is not their own, may need to register their business name via fictitious name filing.
  • Consult a CPA about tax implications and the allocation of the purchase price of the business. An accountant can also assist you in applying for an Employer ID Number (EIN).
  • Open a commercial bank account to use for your business operating and/or payroll expenses.
  • Decide if you will handle your own payroll or use a payroll service. Many payroll services offer quarterly and annual tax filings of payroll and unemployment tax.
  • Acquire a credit card processing machine.
  • Apply for Sales Tax License
  • Find out which local and state licenses the business currently has and make sure they will be current and valid at the time of closing.
  • Look into getting business insurance. Start with the current insurance company used by the Seller. Since insurance is not transferable, make sure you have a binder prior to closing. Research insurance well before closing as it can be difficult to obtain insurance in Florida in flood zones or coastal zones where the threat of hurricanes is high.
  • Transfer Utilities. Consult with the seller to transfer of all utilities, phone service, yellow page listings and other advertising.
  • Find out what contracts, business obligations and customer relationships the company has. This includes equipment leases, floor planning, product financing, gift cards, coupons, vouchers, supplier credit, distribution contracts, territory restrictions, vendor contracts or agreements, customer contracts service agreements, warranty obligations, business group memberships and so on.
  • Florida Personal Property Tax. Florida businesses that own tangible property (equipment, furniture, computers, etc.) that is not included in the assessed value of the real property must pay an annual tax. The estimated tax for the current year should be pro-rated at closing, with the Seller covering their share up to the date of closing.

These are the basics, but keep in mind that others may be included, depending on the type of Florida business you are buying.