The Limited Liability Company (LLC) business structure is a popular choice for many startups because LLCs combine the benefits of a partnership and a corporation. Benefits include limited liability on personal assets, management flexibility, easy distribution of profits, and certain tax advantages.
Check out our video on how to start an LLC in Florida or follow along with this comprehensive guide.
We recommend using IncFile to help you through the formation process. This business formation website offers several services that make the process easier such as a free registered agent service for the first year, unlimited name searches, assistance with filing Articles of Organization, and more.
LLCs are easy to form as the procedures and paperwork required during initiation are relatively straightforward. LLCs are an adaptable form of business and are ideal for small businesses. Therefore, if you are looking to start an LLC in Florida, here is a comprehensive guide to help you:
Steps to forming an LLC in Florida
Below are the basic steps to starting an LLC:
Choose a name for your LLC
Before registration, you’ll need to select a name for your business. The state of Florida provides guidelines on how to name an LLC. They include:
- Name must include “limited liability company,” “LLC” or “L.L.C.”
- It should be unique from other names of existing businesses in the same state
- To avoid confusion with state agencies, name cannot include words like “Treasury,” “State Department,” “CIA,” or “FBI.”
- Additional licensing is required to use words like attorney, bank, or credit union, and may require a licensed professional such as a lawyer to be part of your LLC. In which case, you may want to consider forming a Professional Limited Liability Company or PLLC.
Business owners also need to conduct a preliminary search on the Division of Corporations’ registry to determine if the desired business name is available or already taken. In addition, if you plan to develop a website, you should confirm URL availability. You can do a search online to see if the business name is available as a domain name.
Professional business formation services such as IncFile, provide this for FREE.
Hire a registered agent
A registered agent is an individual or business entrusted with the obligation to send and receive important legal documents and official notices. These include lawsuits, tax forms, government correspondence forms, and more. The registered agent can be yourself, an employee, or a registered agent service, and they must be a full-time resident in Florida.
If you elect to go with a registered agent service, they must have a legal permit to operate in Florida with a physical address.
File Florida LLC Articles of Organization
The Florida Division of Corporations requires business owners to file Form LLC-1 – Articles of Organization with them online or by mail. This gives you the official authority to conduct business in Florida. The filing fee is $125 and is nonrefundable.
Decide whether LLC is member-managed or manager-managed.
An LLC is usually member-managed when there are a small number of members and they are willing to be involved in the day-to-day business operations, and an LLC is usually manager-managed when there are a large number of members and they do not wish to be involved in the day-to-day operations.
Articles of Organization require:
- The LLC’s name
- Principal business address
- Name, address, and signature of your registered agent
- The management structure of your LLC
- Name and addresses of all the LLC’s members, if member-managed
- Name and address of the LLC manager if manager-managed
- The period over which the LLC will exist. Note that most LLCs are intended to be never-ending, but if it’s formed for a specific purpose, you should specify the date it will end.
Upon completion, the Secretary of State will review the filing and decide whether to approve the LLC as a legal business entity. As long as you provide them with everything they are asking for, you should get approved.
Create LLC Operating Agreement
Forming an Operating Agreement for an LLC is not a requirement in Florida, but it is always highly recommended. An operating agreement outlines the ownership and operating procedures of the LLC. Therefore, it ensures owners and employees understand what to expect from the company and vice versa.
An operating agreement includes the following:
- Organization: LLC’s name, details of members, business location, purpose, products or services, and ownership structure.
- Management & voting structure: Who manages the LLC, voting rights, and profit share.
- Capital contributions: Outlines members that support the LLC as well as future funding plans.
- Distributions: The procedure for dividing profits or losses among members.
- Membership changes: Process for adding/removing members or transferring ownership shares.
- Dissolution: When LLC may be dissolved and terms.
Obtain Florida Employer Identification Number (EIN)
An EIN, also known as a Federal Tax Identification Number, is the social security number for a business and a requirement by the state of Florida for all LLCs with employees. Also, you’ll need it to open a business bank account or apply for a business credit card.
Having an EIN allows the IRS to identify and track your business’s tax status. It’s provided free of charge to a business owner after formation. You can apply online or by mail.
Obtain state-specific license(s)
The most common business license in Florida is the Florida Annual Resale Certificate or Seller’s Permit. It’s a requirement if you engage in the sale of taxable goods or services in Florida. The permit expires every year on December 31st and automatically gets renewed by the Department of Revenue.
You should also check with your local government to see if there are more licensing requirements. For instance, if you’re starting a food business, you may be required to obtain certain health permits. Also, federal licensing may apply to LLCs regulated by a federal agency such as:
- Fishing and wildlife
- Firearms and ammunition
- TV broadcasting
- Nuclear energy
If you form your LLC through IncFile, they will take care of the seller’s permit and any other required licensing for a flat fee of $99.
Use IncFile to help you through the formation process
Note that you can use a third-party service such as IncFile to complete the formation process. The gold plan ($274) offers the following:
- It covers state filing fees
- Preparation and filing of articles of organization
- Unlimited name searches
- Free registered agent service for the first year
- EIN business tax number
- IRS form 2553
- Operating Agreement
- Banking resolution
- Lifetime company alerts
- Business banking account
- Business tax consultation
- Online access dashboard
- Unlimited phone & email support
Steps after forming Florida LLC
After registration, here are some additional steps to take to make sure your business runs smoothly.
Organize your finances
To ensure proper management of your business assets, you should:
- Open a business bank account: Separates personal finances from business income and keeps personal assets protected from possible business issues such as lawsuits.
- Obtain a business credit card: Builds business credit score, tracks company expenses, easier to deduct tax write-offs.
- Hire an accountant: Helps track profits or losses, avoid penalties, and save money.
Follow state tax requirements
After getting the legal permission to operate from the Secretary of State, strive to keep your LLC compliant with the federal and state legislation to ensure your business maintains its LLC status.
Florida tax filing requirements:
LLCs must report business income to the IRS annually. During filing, most multi-member LLCs fill out Form 1065 Partnership-Return and most single-member LLCs use form 1040 Schedule C.
Some of the taxes imposed on LLCs include:
- Employer Taxes: New employers must pay 2.7% tax on the first $7,000 paid to employees. This covers state unemployment insurance.
- Sales tax: Also called “Sales and Use Tax” applies if LLC sells taxable commodities and services.
- Industry-specific taxes: The state may impose additional taxes for specific industries. Check with the Secretary of State’s office for additional licensing requirements.
File annual report for Florida LLC
Florida LLCs must also file an annual report with the Florida department of state. The state does this to update all business information with the Division of Corporations. It’s due on May 1st and requires a fee of $138.75 and a $400 late fee for a missed deadline. The first annual report is due the next calendar year after the LLC was formed, and it can be submitted anytime between January 1st and May 1st of that year. Failing to report by the third week of September may result in your LLC being dissolved.
This entire process can be done online through the Department of State’s website.
An LLC is a relatively easy startup you can form without paying for a lawyer provided you use a service like IncFile. The basic steps include naming your LLC, choosing a registered agent, filing the articles of organization, creating an operating agreement, and obtaining an EIN and any state-specific business permits. Note that if you experience any challenges with the above procedures, it’s best to seek professional help to get every detail right. Altogether, strive to be compliant and manage your operations efficiently to prepare for growth in the long run.