Dreaming of opening a restaurant in Coral Springs?
A business law attorney can help you with the necessary legal steps.
Coral Springs is a great place to operate a restaurant. As a growing city with a rich culture and active business community, there are great opportunities for restaurants to target the business lunch hour or nightlife. If you have ever dreamed of starting your own restaurant, and know a few good recipes, then consider getting started right away.
Here are some of the legal steps you will need to take to start a restaurant in Coral Springs.
Organize a limited liability company or corporation
Every business should form a legal entity to limit the liability of the owners, and restaurants are no exception. If a patron is injured at the restaurant, the injured party can sue the owners of the business. However, having a legal business structure like a limited liability company may protect the owner’s assets that are outside the business. Forming a limited liability company or other corporate structure is a valuable first step in starting a business, given the large number of assets that it can protect.
Contrary to what inexpensive online companies advertise, organizing a limited liability company (or incorporating a corporation) is more than just filing a form with the secretary of state. Business owners and investors should discuss with an attorney their objectives, decision-making processes, business goals, and operational plans.
While there are other legal entities to discuss with your attorney, most business owners choose to organize a restaurant as a limited liability company. The way that the company is operated, how decisions are made, and the eventual dissolution of the company (if necessary) is entirely up to how the owners want to craft the business at the formation stage.
Register the business with tax authorities
Before a restaurant can make even one sale, the owners must register the restaurant business with the appropriate tax authorities. In Coral Springs, like most cities in Florida, there are four different government entities that the business must register with: the Internal Revenue Service, the Florida Department of Revenue, the County of Broward, and the City of Coral Springs.
The IRS will provide the business an Employer Identification Number (EIN) to be used on all tax filings. After receiving the EIN, the business must register with the Florida Department of Revenue using the DR-1N form. This is a comprehensive form covering the basic registration for tax purposes, the sales and use tax, the Reemployment Tax (formerly called Unemployment Tax) and other purposes. Then the owners must also register the restaurant business with both the city and the county.
The city and county levy taxes on the personal property and business equipment, so you’ll need to prepare an inventory of your equipment, such as ovens, refrigerators, griddles, tables, and chairs when filing each year.
Apply for a food service license
In Florida, all restaurants must obtain a license to serve food from the Division of Hotels and Restaurants. As part of the application, the new restaurant must submit a detailed site plan. The site plan must show the location of all major kitchen equipment, drains, fixtures, bar area, tables and chairs, and even the dumpster.
After the site plan is approved, the Division of Hotels and Restaurants may require an inspection of the restaurant location. You will also need to provide a proposed menu with the application. After approval of the site plan, the menu, and the inspection is satisfactory or is waived, the food service application may be considered and approved.
Depending on your restaurant other approvals may be required. For example, many restaurants serve alcoholic beverages. Before serving alcoholic beverages, all owners of the restaurant must obtain a beverage license. This is obtained from the Florida Department of Alcohol and Tobacco and requires a background check from all owners of the business, even minority owners.
The City of Coral Spring also requires an application to serve liquor to be filed with the City Hall. A restaurant owner should review zoning laws with their attorney to see if sales of alcoholic beverages are permitted in that location.
Lease the restaurant location
Because you have to submit a site plan before you can open a restaurant, it may seem that signing a lease should come before applying for the license. However, if the license application is denied, the restaurant lease is worthless, as you can’t legally operate a restaurant there.
An owner should choose and view a location before submitting a site plan, and perhaps pay a deposit to the property owner to hold the location while the application is pending. However, a restaurant owner should not bind themselves to a lease until after the food service application, or at least the site plan, is approved.
Commercial leases, like those for a restaurant location, do not have the same legal protections that are built into residential leases. A business owner can assume costs and liabilities in the lease that were not anticipated. Many commercial leases are 20, 30, or even more pages.
A wise restaurant owner should use the skills of an experienced attorney to review a complicated lease, so the owner can focus on spreading the word about the new venture.
Open the doors to your new restaurant
This last step is the most rewarding. It may seem that there is a lot of red tape to get here, but it will be worth it once you start seating your first tables. In fact, with an experienced attorney to guide you, preparing the required documents for each step can be as simple as having a conversation with a professional.
Attorney Matthew Fornaro has helped many successful businesses, including restaurants, complete the necessary paperwork before opening their doors. Taking the right steps at the formation stage can set the restaurant on a successful path, possibly avoiding any additional legal costs, disputes, and liabilities that can plague a business later.