As long as there is debt, there will be a need for a debt collector. The State of Florida recorded over 110,000 bankruptcies in 2010, up from just over 40,000 three years prior. These statistics prove debt is a real issue in the Sunshine State. For those interested in becoming a collection agency in Florida, the process is fairly easy, but there are some rules and procedures that must be followed.
Obtain a surety bond. Commercial collection agencies in Florida are required by law to have a $50,000 surety bond. For those opening only a consumer collection agency, no bond is required. Contact the Florida Office of Financial Regulation at www.flofr.com/finance/licensing-h.htm to obtain a surety bond filing form if you are opening a commercial collection agency.
Secure a business name. Before you get into the filing and registration process to become a licensed collection agency, make sure no other business in the state has the name you have chosen. Go to Florida's Department of State, Division of Corporations website at www.sunbiz.org and look through the business name database to determine if the name you have selected is already in use. You can go ahead and register your fictitious name or wait until you file your corporation papers. A fee schedule is available on the site.
Obtain a federal employer identification number. Go to www.IRS.gov to file for an employer identification number (EIN). You will need this for your bank account, tax records and state filings. There is no fee to obtain this number, and it's usually available within a few minutes. Some people refer to this as your tax ID number, so if you are asked for that, simply provide your EIN.
File as a Florida corporation. Go to the Florida Department of State, Division of Corporations (www.sunbiz.org) to register as a Florida corporation. Select the link for electronic filing, then choose one of three types of filings: a new Florida profit corporation, a limited liability company (LLC) or a limited partnership. A fee schedule is available on the site.
Register as a collection agency. The Florida Office of Financial Regulation, Division of Finance, regulates collection agencies in Florida. Go to their website at http://www.flofr.com/finance/licensing-h.htm to fill out registration forms and pay your filing fee.
Secure local business license. Visit your city hall, courthouse or chamber of commerce to find out if you are required to have a local business license.
Study Florida collection agency laws. Chapter 559 of the Florida statutes governs both commercial and consumer collection practices. Familiarize yourself and your staff with these laws to avoid facing fines or even felony charges.
Open a bank account. You do not want to comingle personal funds with business income, so open a business checking account. Be sure to bring copies of your state filings and federal EIN.
Save receipts for all your business start up expenses - they are tax deductible.