What public records tell you about a Florida business

Before you write to an owner, you want to know a few things about their company: how long it has been around, who runs it, what it actually does and roughly how big it is. Florida makes a surprising amount of that public. None of it shows profit, but put together, it's usually enough to decide whether a company is worth a letter.

Here are the main sources, what each shows and where it falls short.

Sunbiz: the company's paper trail

Every corporation and LLC in Florida is registered with the Florida Department of State's Division of Corporations, and you can search the records for free at sunbiz.org. A company's page shows:

• Date filed. When the company was formed.
• Status. Active or inactive, and the last event on file, such as an amendment, a merger or a reinstatement after the company was dissolved for not filing.
• Addresses. The principal place of business and the mailing address.
• Registered agent. The person or company that accepts legal papers for the business.
• Officers or managers. The officers and directors of a corporation, or the managers and authorized representatives of an LLC, with their addresses.
• Annual reports. Every corporation and LLC must file one each year between January 1 and May 1. Miss May 1 and most companies owe a $400 late fee. Miss the September deadline and the state administratively dissolves the company.
• Document images. Scanned copies of past filings, including old annual reports, so you can see who was listed as an officer years ago.

Sunbiz also holds fictitious names, the "doing business as" names companies use. A registration is good through December 31 of its fifth calendar year and can be renewed. If the name on the truck isn't the legal name, a fictitious name search usually connects them.

What Sunbiz can't tell you: who owns what share of the company, how much it earns, or whether the owner would ever sell. The state itself notes that an annual report is not a financial statement. And the people listed as officers aren't always the owners.

Two related state records are worth knowing about. Notices of federal tax liens (the IRS's legal claim on a company's property for unpaid taxes) on the personal property of Florida corporations and partnerships are filed with the Department of State. Liens on real estate are recorded with the county clerk. And the Florida Secured Transaction Registry, at floridaucc.com, lists financing statements: public notices that a lender has a claim on a company's equipment or other assets. Neither is unusual by itself, but both are good to know about early.

State licenses: who the business depends on

Many businesses need a state license to operate, and the Florida Department of Business and Professional Regulation (DBPR) lets you look them up at myfloridalicense.com. A search shows the license holder, the type of license, its number, its status and when it expires. The detail page adds when it was first issued and, for many licenses, any complaints or discipline.

For contractors, licenses belong to people, not companies. Under Florida law, a company that does contracting must be qualified by a licensed contractor (called the qualifying agent, or qualifier) who takes responsibility for its work. The license record shows which business each license qualifies. That tells you something important: whose license the company depends on. If you're looking at an HVAC company, it matters a great deal whether the qualifier is the owner, a long-time employee or someone who has been there six months.

You'll also see two kinds of contractor license. A certified contractor can work anywhere in Florida. A registered contractor met a local government's requirements and can work only there.

Not every license lives at DBPR. Pest control companies, for example, are licensed by the Florida Department of Agriculture and Consumer Services, and health care facilities such as home health agencies are licensed by the Agency for Health Care Administration.

What licenses can't tell you: how big the company is, how much work it does, or whether the license holder plans to stay.

County records: where it operates and what it owns

Each Florida county keeps records that show a business on the ground.

• Local business tax receipts. Florida counties and cities can charge a local business tax for the right to operate there, and the receipts expire every September 30. Many county tax collectors let you search them online. Depending on the county, a record may show the business name, its location, the type of business and a contact. Receipts in several cities or counties are a good sign of more than one location.
• Tangible personal property returns. Businesses that own equipment, furniture or fixtures generally file a return with the county property appraiser by April 1 each year, and the value is public. It's a rough measure of how much equipment a company has. Two caveats: values are reduced for age (depreciated), and the first $25,000 is exempt, so a company with little equipment may not file at all after its first return.
• Real property records. The property appraiser's records also show who owns the building a company operates from. Some owners hold their building in a separate company. If so, buying the business may also mean negotiating a lease, or buying the building.
• Court records. The county clerk's site shows lawsuits, judgments and recorded liens.

What county records can't tell you: revenue or profit. A company with modest equipment can be very profitable, and one with a yard full of trucks can be struggling.

Federal loan data: a snapshot of size

In 2020 and 2021, millions of businesses took loans from the Paycheck Protection Program (PPP), and the SBA has published data on each loan. For each one it shows the borrower's name and address, the amount, the number of jobs reported, an industry code, the type of business and whether the loan was forgiven.

The loan amount is useful because of how it was calculated. A first-draw loan was generally capped at 2.5 times the company's average monthly payroll, counting pay of up to $100,000 per person. So a hypothetical company that borrowed $100,000 probably had payroll costs (wages plus some benefits) of about $480,000 a year or more at the time ($100,000 divided by 2.5, times 12). If it borrowed less than the maximum, or had people earning over $100,000, payroll was higher.

To get a second-draw loan in 2021, a company had to show 2020 revenue at least 25% below 2019, in at least one quarter or for the year as a whole. So a second draw tells you the pandemic hit that company hard.

What PPP data can't tell you: anything current. It reflects payroll from 2019 or 2020, the borrowers reported the job counts themselves, and not every company applied.

Putting it together for one company

For any company on your list, you can check all of this in one sitting:

1. Sunbiz: formation date, active status, an annual report every year, and the officers on recent reports.
2. Old annual reports: whether the same people were listed five or ten years ago.
3. Licenses: who holds the license the company depends on, since when, and whether that person is an officer.
4. County records: how many locations, roughly how much equipment, and who owns the building.
5. PPP data: roughly how many people the company employed a few years ago.
6. Liens and lawsuits: anything you'd want to understand before a first conversation.

That gives you a picture of a company's age, ownership, size and stability. It doesn't give you its profit. Revenue and earnings figures built from public records, including those on Second & Main, are estimates, not the owner's numbers. The real figures come from the owner, after you've both signed a confidentiality agreement, in the documents described in our post on what to ask a seller for.

A word of caution about using what you find. It's good to tell an owner what you admire about their company, as we cover in what to say in a first letter: how long it has been around, its reputation, the work it does. Reciting their equipment values or loan history back to them is a different matter. It reads as surveillance, not interest. Use the records to choose who to write to, and let the owner tell you the rest.