It takes a little less than 1 hour and around $200 to form a limited liability company (LLC) in Florida. The steps are as follows:
STEP 1: Name Your Florida LLC
To begin, you need to name your Florida LLC. To start a Florida LLC, you choose the company’s name very simply: “Florida LLC” or something similar.
Your Florida LLC name must be unique in the state of Florida. The company name must have a maximum of 75 characters and include a word or words that accurately describe what the company does.
If your LLC name is already in use by another business, you must select an “F” as your second initial after choosing the main letter; this is used to designate that you are the successor to the corporation.
You may choose not to assign a legal name to your Florida limited liability company (LLC). The Florida Department of State requires that the owner of a Florida LLC include an individual’s name as part of their business name.
STEP 2: Choose a Registered Agent in Florida
With your name chosen, you will need to appoint a Registered Agent in Florida for your LLC. The registered agent is the domiciliary address to which the company must send documents every time a copy is sent to the limited liability company (LLC).
To ensure that your Registered Agent fits the Florida Department of State’s website requirements, it is essential that you select someone who can accept mail and who is allowed to receive and open the company’s mail. Make sure you select someone who can accept the business’s documents and assist in mailing them out.
The address of your Registered Agent must be an established street address in Florida. With this address, you will receive your LLC Documents from the Department of State.
The company must have a Registered Agent within 30 days after the formation of the LLC. If an LLC has gone longer than 30 days without having a registered agent, the Department sends an amendment process letter that requests for missed deadlines to be amicably resolved.
Documents must be signed by the registered agent or the person authorized to sign on behalf of the LLC. All documents that are submitted to the Department must include:
1. The registered agent’s name and address
2. The name of the LLC
3. The street address of the registered agent’s place of residence in Florida
4. The date when the LLC was formed or, as an alternative, accepting an amendment to an earlier business filing, when it was first organized
5. Signature of the registered agent
6. Date of signature of the registered agent
7. State that the registered agent is the owner of an interest in the business
8. The street address where mail can be sent to this LLC or other successor business entities
9. If attached, a signed waiver for mailing by mail to this LLC or any successor entity and another signed acknowledgment form
The minimum state filing payment for a new LLC is $200, which includes both filing fees and renewable annual extensions (increases) for amendments and renewal applications.
STEP 3: File Articles of Organization of Your Florida LLC
Once you have filled out the forms properly, they will be sent to the Department of State. Once this happens, your business details will begin to be processed and included in Florida’s vital record system.
The LLC will now have an official existence in the state of Florida, and this official document will serve as proof that the company is legitimately registered and operating within the state from this point forward.
Rules to follow:
The Florida LLC must have its Articles of Organization filed with the Department of State. The articles will provide the details of the company, and contain the name, addresses, phone numbers, and email addresses of its business owner or members who are required to sign the company’s articles.
Article 1: Name, purpose, and duration
Article 1 is straightforward and must state that you are creating a Limited Liability Company (LLC) in the state of Florida with tax-exempt status under Section 301(c) of the Internal Revenue Code (IRC).
Article 2: Name, address, and articles of organization
This section lists all the information necessary to identify the company. This includes the business name, company type, location information (including home office information), and registered agent information.
Article 3: Management business structure and membership/ownership of LLC
This article is largely dependent on who will be responsible for the direction of your Florida LLC. If a committee runs your LLC for collective governance, you can list the names of each committee member here.
If there is only one owner, you may wish to enter his or her name as the registered agent. Article 3 also indicates whether or not all owners are equal members with rights to participate in management and voting and whether or not they must be listed on the official Articles of Organization document.
An LLC may allow for more than one member with limited rights, such as owners of a separate corporation that the LLC is a subsidiary of. This would be indicated here.
If there are multiple members and each is an equal owner, you can enter their names under “Members”. An example would be “Barbara” listed as the Owner of the LLC with “Ron” listed as an Officer of the LLC.
This article also provides details on how to deal with board vacancies or other situations where there are potential conflicts during the company’s operation.
Article 4: Ownership and members
This declares that the LLC will own its assets as a separate legal entity and lists the name of each member officially authorized to act on behalf of the LLC. If there are multiple owners, each may be listed here.
For example, “Barbara” is listed as an Owner, with “Ron” listed as an Officer of the LLC. Charles is named as an Agent for both Barbara and Ron. The Registered Agent must be a U.S. citizen or resident alien and at least 18 years old.
Article 5: Registered agent service and address of the registered office
This is the address where you will receive official LLC documents from the Department of State if you are not using a mailing service as your registered agent. The company will pay annual renewal fees to the Department of State at this address.
FOR THIS TO BE EFFECTIVE, the LLC must have an identical address (i.e., similar to the street address of the registered agent’s place of residence) on file at the Department.
Article 6: Limited liability and management
This article outlines how much personal liability each owner has for the company’s obligations. The articles will state that each member who is not an owner has limited liability in favor of the LLC, which means that any obligation of the LLC will be limited by his or her personal assets.
Article 7: Employees and other service providers
This article allows any person who is not an owner or member to be listed as an employee or a service provider. This will enable you to draw up contracts with your employees and other contractors without listing them as owners of the LLC.
Article 8: Directors and committee
Here, you can name the members, for example, staff members, contractors, or officers of the LLC who will conduct business on your behalf (at least a few times per year). You can also list members who will act on your behalf if one of the owners is unavailable.
The document must state which “members” have voting rights, which “members” can participate in management activities, and any other requirements that may apply to managing a limited liability company (LLC) in Florida.
Article 9: Distribution of assets
This article states how the assets will be dispersed if the company dissolves or makes a decision to sell off its assets. For example, this may say that all assets that are not used for business will be transferred to another sole-proprietor LLC.
Article 10: Dissolution
This critical article states when the company is dissolved and the shareholders or members of the LLC become liable for debts due to the company. This article must be filed within 90 days after consideration of dissolution by a majority vote of ownership or if the company is dissolved by judicial order as required by state law.
STEP 4: Create a Florida LLC Operating Agreement
Although the Florida LLC is a simple form of business entity, it does come with some specific conditions that must be met before the company can begin operating. In order to establish how an LLC will work, it must have a formal operating agreement.
Not only does this allow for important legal procedures to occur in advance of official articles of the organization, but it also helps define responsibilities and duties between LLC members and other stakeholders.
STEP 5: Get an EIN for your Florida LLC
The business must obtain an employer identification number or EIN. Once a company has an EIN, it can begin receiving its Federal Tax ID Number (EIN) and filing tax returns. The EIN is a 13-digit number that consists of nine numerical digits plus four-letter suffixes. The suffixes are as follows: TN, OH, NY, FL, or CA.
The first four letters will correspond to the state where you have your Florida LLC incorporated. For example, an EIN for a Florida LLC is 932-00-000.
The EIN of the LLC does not have to be the same as its name. However, this name must have been registered with the Florida Secretary of State before the EIN can be issued to your LLC.
Florida LLC Forms
You can order Florida LLC forms from the Florida Secretary of State. These forms are generally used to create additional documents such as bylaws, operating agreements, private placement memorandums, and articles of amendment.
The website provides sample materials that you can use as a guide for creating your own documents to ensure they comply with state law. These forms can be downloaded, printed out, and completed by hand or purchased as pre-printed documents that have already been filled out but need minor editing and signatures.
Florida LLC Operating Agreement
This is the most important form for any new Florida LLC. The operating agreement is a contract outlining the framework of how the company will conduct its business and create additional documents. This information must be in place before the first official document in this series, a certificate of formation must be filed with Florida’s Secretary of State.
Like Articles of Organization, this document can be assembled using a template (as one example) or by hand.
What are some of the benefits/advantages and disadvantages of forming an LLC?
There are several benefits and advantages to forming an LLC. One major advantage is the limited liability of the owners. This means that the business will have to pay for any debts or obligations out of its funds. The personal assets of the owners are not at risk in most cases.
Advantages of Incorporating in Florida
- First and foremost, Florida laws provide the most flexible incorporation statutes in the country.
- Florida law is designed to be as easy as possible for a person who wants to incorporate in this state but does not want to wind up with a long list of requirements or restrictions that are not necessary.
- In addition, the State of Florida imposes no “day-to-day administration” requirements on the division of corporations, thus allowing you to direct and control your business without interference from the state. Most other states do impose some corporate filings, filing fees, and regulations on their corporations, often requiring filing an annual report or “certificate of status” with the Secretary of State, which costs several hundred dollars per year. However, Florida does not impose any such requirements or charges. Florida is the only state that does not impose a franchise tax on corporations or LLCs. This is a massive saving for Florida-based corporations and LLCs when compared to many other states who are collecting hundreds of thousands of dollars in yearly franchise taxes.
- The lack of strict requirements to operate a business in Florida has led many people from other states to incorporate in Florida. For example, California has many strict employment laws but very few incorporation statutes. Many business owners from California choose to incorporate in Florida as a means to avoid strict employment regulations and excessive mandatory wage requirements.
- Florida has a reputation for being one of the most accessible states in the US to incorporate. However, some may argue that this is a double-edged sword. Because the state of Florida makes it easy to create an LLC, some people exploit those loopholes by creating non-legitimate businesses or shell companies. This can be detrimental to those who do business in this state as they may be dealing with someone who is trying to hide assets and/or shield their assets from creditors or ex-spouses.
- Florida corporate laws are also very generous toward shareholders/members and their creditors, which can be a double-edged sword. While this is a plus for owners of Florida LLCs, it can also be detrimental to Florida-based creditors. If a company becomes delinquent on any payments to creditors (e.g., vendors or banks), then the shareholder/member is liable for all amounts owed up to the amount of their investment in the company. In addition, the creditor will have to get court approval to collect from a shareholder/member, which can be a lengthy process. This is not the case in many other states, where creditors can go after debtors using traditional means without getting court approval.
It is essential to weigh these advantages and disadvantages before deciding whether or not Florida is the best state for your business.
How much does it cost to start a Florida LLC?
This depends on a variety of factors: the company’s industry, size, and location.
The state fees are low, ranging from $20 to over $200. Generally speaking, the cost increases as the number of pages required rises. In most cases, however, you should be able to complete a simple form for between $100 and $200 in materials (depending on the type of company selected), with a few additional hours spent completing forms.
Separate Your Personal & Business Assets
Protect your assets from lawsuits and creditors. Keep your business and personal finances separate by forming an LLC today.
This can be especially important if you have a startup company that is not yet profitable. In such a situation, you may have substantial amounts of personal assets (such as a home, retirement account, or other investments) that can be used to satisfy any judgment rendered against your company.
- Opening a business bank account: You need a business checking account. Having a business bank account separate from your personal accounts (and any corporate accounts) adds an extra layer of separation between your company and your personal finances.
- Getting a business credit card: You may need a credit card for your business because it is the best way to ensure that your company gets paid on time. Your credit card bill will show up in the same place every month, so you can make sure that you always have enough money in your business checking account to pay the bill at least one month before it is due. If necessary, you can also use a credit card for purchases that may not otherwise be allowed by your merchant agreement, but only use it as a last resort.
- Hiring a business accountant: If you are starting a new business, you should have an accountant review the operating and financial statements. Your accountant should be able to help you set up the business as a sole proprietorship or as an LLC. However, if you plan on hiring employees in the future, it may be better to incorporate.
Get Business Insurance for Your LLC
Businesses need insurance to cover a variety of common risks. If you do not insure your business with a commercial liability policy, you may have to personally pay for any damages or injuries on your business property. This financial risk can cost you hundreds of thousands of dollars if the worst happens.
Create Your Website
Your business website is your online identity. It should contain all of the same information that you put on paper, but it needs to be engaging and easy to find.
Send Out a Press Release
A press release is a great way to get your company in front of your local, national or even international media. If you are in the process of starting a new business or have recently made an acquisition, it can attract publicity to your company. However, press releases are only helpful if you have a professional marketing firm that can write and distribute them.
Florida Business Permits & Licenses
You may need a permit or license if your business is involved in a particular occupation. For example, a real estate broker must get an exemption from the Florida Board of Real Estate Brokers (the state licensing body). A massage therapist must get an exemption from the Florida Board of Massage Therapy Examiners (the state licensing body).
If you plan on selling goods to consumers in Florida, you must obtain a sales tax license. You can get a sales tax license from the Department of Revenue.
Florida LLC Tax Filing Requirements
All LLCs must file an annual report with the Florida Department of State. If your LLC does business in Florida, then you will have to file a separate tax return for your business. The first step is to know what kind of business you are in (asset protection, S corp).
Typically, the IRS refers to this as a “check-the-box” election. You can make the election either by filing an election with the IRS or the state.
If you sell goods to Florida residents, then you will have to collect and report sales tax on your transactions. To do so, you need a sales tax license and a resale certificate. You can get this from the Florida Department of Revenue.
If your LLC will be hiring employees in Florida, you should register with the state and withhold and pay federal and state employment taxes. To do so, you need a Federal Employer Identification Number (EIN). You can get an EIN from the IRS.
The corporate income tax is a business tax imposed on the net income of corporations.
Some industries are allowed to obtain tax exemptions or credits, which can substantially reduce the tax liability of your company. For example, the film industry is allowed to have a refundable tax credit for production expenses. There are two types of assets that a business may owe:
- Intangible Personal Property (IPP) – These taxes are imposed on intangible personal property (joint venture interests, licenses, patents, and trademarks) that are owned by your business and used in your business.
- Tangible Personal Property (TPP) – These taxes are imposed on tangible personal property (buildings, machinery, and equipment).
The income tax is a business tax imposed on the net income of corporations.
All businesses should file with the IRS to report their business and personal tax responsibilities. When you file, you can elect to be treated as an “S” corporation, “C” corporation, or a partnership.
Register for Florida State Taxes
The corporate income tax is a business tax imposed on the net income of corporations.
Business payroll taxes are taxes that your company must withhold from employee paychecks and send to the government. The most common payroll tax is the federal income tax, which you will have to withhold from all of your employees’ paychecks.
You will have to deposit this withholding money into a separate bank account and then send it to the IRS along with your own corporate income tax return as soon as it is due.
Federal LLC Tax Filing Requirements
You do not need to file a separate tax return for your Florida Limited Liability Company (LLC). However, if you have employees or own property in the LLC, you will have to report that on your personal income tax return.
You must also keep track of your expenses and earnings in order to calculate your net income as an LLC. This income will be taxed at an entity level, even if the business is organized as a pass-through entity (LLC).
To be an S Corp, you must meet specific licensing requirements in addition to the LLC. You will need to get a federal EIN from the IRS.
If you expect to become a multi-state employer, then you should also file with each state’s Department of Revenue.
Florida LLC Annual Report
All LLCs must file an annual report with the Florida Department of State. The first step is to know what kind of business you are in (asset protection, S corp).
You will need to send in your business license application as well as your Articles of Organization and operating agreement. You can get this information from the Florida Department of State. Be sure that your information matches what is on file with the state or they will send you a letter asking for corrections.
If you plan to hire employees, you will need to register with the federal government and obtain a Federal Employer Identification Number (EIN). You can get an EIN from the IRS.
If your LLC expects to become a multi-state employer, then you should also register with the state employment agency of each state where your business will be operating.
What is a certificate of status, and why would I need one?
A certificate of status is a document that confirms your corporate existence. If you are incorporated in another state, then you would need a certificate of quality to register in Florida. If you are not incorporated in another state, then you do not need a certificate of status.
All the above information about starting an LLC in Florida is only a general overview of the requirements for starting an LLC in Florida. There are other details that may be important to your specific business. If you plan on operating an LLC in Florida, then we highly recommend discussing your situation with licensed attorneys.