Starting a limited liability company (LLC) in Florida has never been more appealing. With a myriad of benefits and a straightforward process, it's no wonder entrepreneurs are flocking to the Sunshine State. This comprehensive guide on how to start an LLC in Florida will walk you through the steps of forming a Florida LLC, highlighting its advantages and offering practical advice for success.
A limited liability company (LLC) offers liability protection and tax advantages, among other benefits, for small businesses. Follow this guide and you'll be on your way to starting your Florida business.
Key takeaways
- Understand key benefits and types of Florida LLCs before forming.
- Follow the step-by-step guide to forming a Florida LLC, including naming, appointing a registered agent, filing articles of organization, and obtaining an EIN.
- Learn how to acquire licenses/permits and file annual reports for post-formation management.
- Discover options to assist you with business management, such as mail forwarding services and business consultation.
Understanding Florida LLCs
A Florida limited liability company (LLC) is a business structure that provides liability protection and tax advantages for its owners. These versatile entities are popular among entrepreneurs due to their flexible management structure, which can be customized through a Florida LLC operating agreement.
Key advantages of Florida LLCs
The most significant advantages of forming an LLC in Florida are:
- The absence of state income tax
- Pass-through tax status allows LLCs to transfer their tax liability to the personal taxes of their members, resulting in substantial tax savings
- Asset protection, as personal assets are shielded in the event of litigation against the LLC. This is particularly important for businesses operating in regulated industries that require a business license
The simplicity of forming an LLC in Florida is another enticing factor for entrepreneurs. The state's Division of Corporations offers numerous resources to assist with LLC formation, making it accessible even for nonresidents. With low annual maintenance costs and minimal formalities compared to corporations, having an LLC in Florida is an attractive choice for business owners seeking to establish a presence in the state.
Types of Florida LLCs
There are several types of LLCs in Florida to suit different business needs. Here are a few highlights:
- Single-member LLCs consist of a single member but may be managed by multiple people, offering simplicity and flexibility in management.
- On the other hand, multi-member LLCs allow for multiple owners, making them ideal for businesses with several partners or investors.
You can also elect for your LLC to be taxed as an S corporation, which can provide certain tax benefits and flexibility for the company's owners. This type of LLC is taxed as a pass-through entity, with profits flowing directly to the members' personal income, avoiding double taxation.
Ultimately, the type of Florida LLC you choose will depend on your specific business needs and goals.
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Equipped with an understanding of Florida LLCs, we will now delve into forming an LLC in Florida. This guide will cover the following steps:
- Naming your LLC
- Appointing a registered agent
- Filing articles of organization
- Creating an operating agreement
- Obtaining an Employer Identification Number (EIN)
Name your Florida LLC
You'll need to choose a name to include in your articles of organization before you can complete your Florida LLC registration.
Names must comply with Florida's naming requirements. The following are the most important requirements to keep in mind:
- Your business name must include Limited Liability Company, LLC, or L.L.C.
- Your name must be different from an existing business in the state. You can perform a Florida business search to determine if a particular business name is used.
- The business name cannot contain words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and licensure paperwork.
When selecting a name, consider the following factors:
- Memorability
- Ease of spelling
- Potential for trademark issues
- Your business's purpose and values
See the Florida Legislature's website a complete list of Florida's naming rules.
Additional considerations
- URL availability. Even if you don't think you'll need a webpage, you probably will. At the very least, you should reserve the option of having one in the future by buying your domain name now. Before finalizing your LLC name, checking if the URL is available is a good idea.
- Reserve your name. If you aren't ready to register your LLC but are concerned your name might be taken by someone else, you can reserve it for a fee of $25.
Choose your registered agent
Florida requires you to appoint a registered agent for your LLC.
A registered agent is a person or entity authorized to receive service of process and other official legal documents and notices on behalf of your LLC.
A registered agent can be a person—including yourself or an employee of your LLC—or an entity that offers a registered agent service.
They must meet the following criteria:
- Entities (or companies) must provide registered agent services.
- The agent must have an address in Florida.
- The agent must be on-site and available to accept documents during regular business hours.
Prepare and file articles of organization
The articles of organization document formally establishes your LLC with the state by laying out basic information.
Prepare Florida LLC articles of organization and file them with the Florida Division of Corporations so that you are creating an LLC in Florida properly. You can either file the document online or send it by mail.
To prepare your articles, you'll usually need the following information:
- Your LLC name and principal place of business.
- The name and address of your registered agent (P.O. boxes will not be accepted).
- The person forming the LLC is required to sign the Articles. Also, in Florida, the registered agent must sign.
Once you file your articles, the Secretary of State will review the filing. If the articles are approved, the LLC becomes a legal business entity.
Receive a certificate from the state
The state will issue you a certificate that confirms the LLC formally exists after the LLC's formation documents are filed and approved.
This certificate will allow the LLC to obtain an employer identification number (EIN), business licenses, and business bank account.
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Create an operating agreement
An operating agreement is a document that outlines the way your LLC will conduct business.
Florida does not require your LLC to file an operating agreement, but it is an essential business component. Having a readily accessible, written operating agreement is helpful for various reasons, including settling disputes that may arise over financial agreements and other potential litigation. Without an agreement, the courts make determinations based on state law, not necessarily what is in the best interest of the LLC or its members.
Your Florida LLC operating agreement can include, but is not limited to, the following:
- LLC's name and principal address
- Name and addresses of LLC members
- Duration of the LLC (if it has a specific end date)
- Name and address of the registered agent
- Formation date
- Purpose of the business
- Members and their contribution
- Each member's ownership stake in the company, voting rights, and profit share
- The way profits and losses will be divided
- Procedure for admitting new members, as well as outgoing members
- Management of the LLC
- Dissolution terms
- Indemnification and liability clauses
Get an employer identification number
The nine-digit employer identification number (EIN) is assigned by the Internal Revenue Service (IRS) to identify your LLC for taxes. You can obtain your EIN by mail or online through the IRS.
The purpose of an EIN is to assist with the following:
- Filing and managing taxes at the state and federal level
- Obtaining licenses and permits
- Opening a business bank account
- Hiring employees
What to do after forming your Florida LLC
Following the establishment of your Florida LLC, several post-formation tasks must be tackled. These include opening a business bank account, acquiring necessary licenses and permits, and filing annual reports. By staying on top of these tasks, you'll ensure that your LLC remains compliant with state regulations and is poised for success.
Obtain your Florida business license
Depending on the type of Florida business you operate and its location, your Florida LLC may require specific licenses and permits. These include professional licenses, zoning permits, or a business tax receipt.
Securing necessary licenses and permits before operating is vital for maintaining compliance with state regulations. Failure to do so can result in fines or penalties, jeopardizing the success of your Florida LLC.
Establish a bank account
A separate business bank account for your Florida LLC is vital in safeguarding personal assets and streamlining accounting and record-keeping. To open a business bank account, you'll need to obtain a certificate from the state, acquire an EIN, and provide the necessary documentation to the bank.
Several banks in Florida offer advantageous business bank accounts for LLCs, including:
- Chase Bank
- Wells Fargo
- Bank of America
- PNC Bank
- Truist Bank (formerly SunTrust)
Research the options available and choose one that best suits your business' needs.
File annual reports
Submitting annual reports helps maintain your Florida LLC's compliance with state regulations and preserves its active status. Florida LLCs are required to file their annual report online between Jan. 1 and May 1 each year. The cost of filing an annual report is $138.75.
To complete an annual report, you'll need the following information:
- LLC's document number
- Entity name
- Federal Employer Identification Number (FEIN)
- Principal place of business address
- Mailing address
Staying up to date with Florida's annual report filings is crucial for the continued success of your Florida LLC.
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Understanding Florida state tax requirements
To ensure your LLC remains compliant with state tax laws and regulations, it's crucial to understand Florida state tax requirements. LLCs in Florida have three options for filing their taxes: as an LLC pass-through entity, an “S corp," or a “C corp." These all have different ramifications regarding taxation and identity protection. Pass-through status can be particularly beneficial at the state level, as Florida does not have a state income tax.
By understanding and staying compliant with Florida state tax requirements, you'll ensure the financial health of your LLC and avoid potential tax penalties.
Obligations for Florida LLCs with employees
- Report all new employee hires or rehires. Within 20 days of hiring or rehiring, LLCs must report new employees to the Florida Department of Revenue.
- Purchase workers' compensation insurance. LLCs must purchase workers' compensation insurance as soon as the fourth person is hired.
- Pay unemployment taxes. This is a requirement for all Florida LLCs with employees.
Florida LLCs with employees are also required to have an EIN. You can obtain an EIN from the IRS or through an EIN filing service.
Cost of forming an LLC
Now that you understand the steps involved in starting an LLC in Florida, let's look at the costs associated with having a Florida LLC.
The cost of a Florida LLC can range from $125–$538. Some of those fees are one-time fees associated with forming your LLC. Other fees are annual and are associated with running your LLC.
Here is a breakdown of the one-time fees associated with having an LLC in Florida:
New Florida LLC
- Filing fee: $100
- Registered agent fee: $25
- Name reservation fee: $25
Here is a breakdown of some of the annual fees associated with running a Florida LLC:
Existing LLC
- Annual report: $138.75
- Annual report received after May 1: $538.75
- Amended annual report: $50
For a complete list of fees for Florida LLCs, visit the Florida Division of Corporations.
Registered agent services
While you can choose to serve as your own registered agent, procuring a registered agent service can bring many advantages to your Florida LLC, including professional correspondence management and privacy protection. Florida registered agent services typically range from $100/yr for basic services, to over $400/yr for premium services. LegalZoom's registered agent service costs $249/yr.
By considering the costs of state filing fees and registered agent services, you can decide on the most cost-effective approach to forming your Florida LLC.
Additional Services for Florida LLCs
Apart from the fundamental formation requirements, your Florida LLC can be bolstered by extra services such as mail forwarding and business consultation. This section examines these options and highlights their benefits for your LLC.
Mail forwarding services
Adding virtual mail and mail forwarding services to your Florida LLC package can be highly beneficial, offering the following:
- A professional business address
- Convenience in receiving mail and packages
- Mail security
- Cost efficiency
- Privacy protection
Business consultation and support
For the sustained success of your Florida LLC, consider bringing on an attorney as a business advisor. A Florida business attorney can advise you as you get your business up and running, expand your operations, hire employees, and navigate the compliance landscape. LegalZoom's Business Attorney Plans connect you with an expert who can help you with whatever you need, whenever you need them.
Next steps
Forming an LLC in Florida gives you formal liability protection as you conduct business, but you'll need to keep your LLC compliant and in active status on the state's website.
This might include making quarterly tax payments. All Florida LLCs must file an annual report each year, and the first report is due in the year following formation. LLCs must file reports online between Jan. and May 1. You also need to maintain a registered agent for your business.
Here's an overview of what you may need to set your business up for success:
- Obtain permits or licenses necessary to operate your business, including health department permits, zoning permits, home occupation permits, and professional licenses.
- Open a business bank account.
- Apply for a business credit card.
- Purchase insurance for your business.
- Protect your name and logo with a trademark.
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Filing your Florida LLC annual report
Filing your Florida LLC annual report is a required annual task that must be completed by May 1 each year. The filing fee is $138.75, and the information included in the annual report filing typically consists of updates to the following:
- Current address
- Registered agent
- Member information
- Manager information
Filing your annual report on time helps maintain your LLC's good standing with the state and ensures you comply with Florida's requirements.
Summary
Forming a Florida LLC offers numerous advantages, including liability protection, tax benefits, and management flexibility. By following our guide and considering the various costs and additional services available, you can create a strong foundation for your business and pave the way for success in the Sunshine State.
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Frequently asked questions
How much does it cost to start an LLC in Florida?
Forming an LLC in Florida costs $125, which covers the fee for filing the articles of organization with the Florida Department of State. Once approved, your LLC will be officially established.
How do I start an LLC in Florida myself?
To start an LLC in Florida yourself, you need to choose a name for your LLC, prepare and file articles of organization, create an operating agreement, obtain an EIN, and get a business license. Then you can establish a bank account and take the next steps.
What do I need to file for an LLC in Florida?
To file for an LLC in Florida, you must submit the Florida LLC articles of organization document, which includes information like the LLC's purpose and place of business, a list of the organization's managers and members, and a registered agent. Additionally, name registration and a Federal Employer Identification Number from the IRS are required for tax purposes, along with an operating agreement, business license, and a bank account.
How long does processing an online EIN application for a Florida LLC take?
It takes approximately 15 minutes to process an online EIN application for a Florida LLC.
What is the deadline for filing a Florida LLC annual report?
The Florida LLC Annual Report must be submitted by May 1 annually.
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