To form an LLC in Florida, you should apply through the Division of Corporations of the Department of State. Are you planning to set up an LLC in the Sunshine State? Most people consider Florida a place where one can go for a vacation and relax. The fact is it is one of the popular destinations for entrepreneurs. Moreover, there are 2.5 million small enterprises in Florida, many of which are in the tourist, agriculture, and science industries.
Here we will discuss the step-by-step guide on how to start an LLC in Florida for free to help you get started today. Keep reading, we have covered everything below!
What is an LLC? A limited liability company (LLC) is a corporate framework for a firm. It combines a corporation’s restricted liability with a partnership’s or sole proprietorship’s flexibility and absence of formality. An LLC should be considered by any business owner who wants to restrict his or her individual liability for the business and claims. If you want to know more information on the steps of forming an LLC, you can check our guide on How to start an LLC in 10 simple steps.
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You’ll need to file Articles of Incorporation with the Florida Division of Corporations to form a Florida LLC. The cost of registering is $125 and this can be done both online or by mail. The Articles of Organization are the legal documents that establish your limited liability company in Florida.
One of the first decisions you’ll have to make when beginning a business in Florida is what type of corporate entity to form. In Florida, you might wish to explore forming an LLC. For several years, an LLC has always been the most popular form of business in Florida. LLCs are simple to form and maintain, offer tax benefits, and provide protection under the law to their owners. In this guide, we’ll walk you through all you need to know about how to start an LLC in Florida. Also, read our guide on how to start an LLC in Texas.
Before we start, here are the top picks for LLC formation services in Florida:
- All of the advantages of the LLC form are available to Florida business owners, including management freedom, pass-through taxation, and limited liability protection.
- Corporations in Florida are required to keep more records than LLCs.
- Members can possibly save a lot of money because Florida does not have a state income tax
- LLC members can determine how their business is taxed at the federal level and avoid the double taxation that C corporations suffer
- The regulatory system in Florida is simpler and faster to navigate than in many other states, making it easier for business owners to recognize their legal requirements.
- For corporate entities, Florida does not allow name registrations.
- In Florida single-member, LLCs have less protection from the reach of creditors than multimember LLCs
- At the federal level, LLC members must pay significant self-employment taxes.
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What Are The Benefits Of Starting An LLC In Florida?
LLCs are a clear and simple and low-cost solution to protect your personal belongings while also reducing your tax liability. The liability protection of a corporation is combined with the tax treatment and simplicity of administration of a partnership in a Florida LLC.
Here are the advantages of forming an LLC in Florida:
Limited liability companies (LLCs) are extremely simple to incorporate and maintain in Florida, requiring little paperwork and cost. LLCs, unlike C companies, are not obliged to designate formal officer responsibilities, have annual meetings, adopt bylaws, or keep track of business records and decisions. Profit distribution options are also available to Florida LLCs. Unlike a general partnership, where the division is 50-50, an LLC has a lot more flexibility. The number of individuals allowed in an LLC is usually unlimited, and owners have freedom in designing the company’s management.
Read Our Guide On Sole Proprietorship Vs LLC: How To Make The Right Choice?
2. Pass-through Taxation
Members of LLCs often benefit from pass-through taxation, which implies they report their portion of the LLC’s profits and losses on their personal tax returns. Any taxes owed are then paid on an individual basis. Single-member LLCs record all income or loss on Tax Deductions, while multi-member LLCs submit a partnership tax return for the LLC.
Pass-through taxes eliminates double taxation for C corporations, which occurs when capital gains are taxed at the company level and then taxed again towards the individual level if profits are given as shareholder dividends.
Profits from a Florida company are liable to “double taxation.” Earnings are charged before being dispersed to owners, and profits are levied again when owners declare their part of the profits on their personal tax returns.
3. Limited Liability Protection
If a business owner’s liability protection is limited, he or she cannot be held personally liable if the company suffers a loss. Personal assets such as vehicles, houses, and bank accounts are therefore secured. Some types of businesses, such as sole proprietorships and partnerships, do not provide limited liability protection. Companies have limited liability, but they are hard to run and can provide unfavorable taxation to smaller companies.
4. Fewer Formalities
The LLC business entity is easier to manage since it does not require corporate meetings or decisions. Annual member meetings and documentation of significant business decisions are still required.
5. Name Registration
When forming an LLC in Florida, you’ll pick a catchy title that will be recognized once the company is founded. No other companies in your state will be able to use your name while your business is operating if you register it.
The business name for a sole proprietorship or partnership must be the name of the owners or shareholders. To use a name other than their own, a sole proprietor will need to file a doing business as name (DBA).
6. Increased Reliability
Starting a limited liability company (LLC) in Florida provides confidence to your organization. A limited liability company (LLC) is considered a more corporate management structure than a sole privately owned company. Customers and partners will recognize you as a respectable company if you include LLCs in your business name.
7. Tax Options
Generally, most small business grows and owners pay a reasonable salary each year and might benefit from another LLC tax option. Under the correct conditions, an LLC choosing S corp tax reduces self-employment and total tax burden. Whereas a limited liability company has three different ways of paying income tax and one of the most popular options is to be taxed as an S corporation.
8. Management Flexibility
A Florida LLC’s ownership and management can be structured in a variety of ways, only with a few exceptions:
- You can form a single-member LLC or a multi-member LLC.
- Members can manage a Multi-Member LLC, which is referred to as member-managed.
- Manager-managed LLCs are those that are controlled by a manager who is appointed by the members.
Disadvantages Of Starting An LLC In Florida
It’s also crucial to understand the disadvantages of forming an LLC in Florida. The following are some of the disadvantages of incorporating an LLC in Florida:
- Initial Fees: The cost of forming an LLC is greater than that of forming a sole proprietorship or a general partnership.
- Minimal Case Law Protection: Since the LLC is a newer company organization, there isn’t much case law. Consult with an attorney to see if forming a Florida LLC is the best option for your company.
- Ownership Transfers Have Limited Flexibility: Transferring ownership is often more difficult than transferring ownership of a corporation. The members must specify in the LLC’s partnership agreement whether the property can be transferred and, if so, whether other members must approve the transfer.
Steps For How To Start An LLC In Florida
One of the greatest states in which to form an LLC is Florida. In Florida, LLCs are exempt from paying state income taxes and have no restrictions on their organizational structure. The procedure of forming an LLC in Florida is time-consuming, but it’s not as difficult as you would imagine.
Your LLC will be up and running in no time once you know how to register your firm, choose a designated person, file the articles of the organization, create an operating agreement, and receive an EIN. However, in this complete guide, I’ll show you how to form an LLC in Florida straight now.
1. Choose a Name for Your Florida LLC
The first step in forming an LLC in Florida is deciding on a name for your company. Florida law, like that of other states, requires you to name your LLC something that is unique from the names of existing organizations on file with the Division of Corporations. This need is in a way to secure customers and the general public informed.
To start, look up your name in the Division of Corporations’ Business Name Database. This will return results for firms that are registered in the state of Florida. If there are no matches in this database, you should perform a brief internet screening search. To see if your desired name is already being used by another organization, simply type it into your preferred search engine.
If your internet search generates no results, you should check the United States Patent and Trademark Office (USPTO). This will assist you to avoid infringing on the trademark of another company. The United States Patent and Trademark Office (USPTO) maintains a database of trademark registration.
The names must conform to Florida’s naming regulations. The following are the most important factors to consider:
- The phrases Limited Liability Company, LLC, or L.L.C. must appear in your company name.
- Your company name must not be similar to that of another company in the state. To see if a specific business name is already in use, go to the Secretary of State’s website and perform a search.
- A business name cannot include words that are used to identify a government entity for example State Department, CIA, FBI, Treasury, etc.
- Additional documentation and licensure papers may be required for certain limited words such as bank, lawyer, attorney, credit union, and so on.
Make sure your name isn’t already in use by conducting an LLC name search. Furthermore, it is already a good idea to see if your company name is available as a web domain. Even if you have no plans to construct a company website right now, you may wish to purchase the URL to prevent others from doing so.
After naming your business, you must get a unique logo design for your business. You can get top-notch logos with the use of the best free logo makers.
2. Appoint A Registered Agent In Florida
Every Florida LLC is required to have a service of process agent in the state. When someone decides to sue the LLC, this person or business willingly accepts official documents on the company’s behalf. A registered agent can be a Florida person or a commercial entity permitted to do business in the state, as long as the agent has a physical location in the state.
A registered agent must be a full-time resident of Florida or a corporation allowed to do business in the state, such as a registered agent service. You have the option of selecting someone from your company, including yourself.
They must meet the necessary requirements:
- Registered agent services must be provided by entities (or businesses).
- The representative must have a Florida address.
- During regular business hours, the agent must be on-site and ready to accept documents.
3. File Your Florida LLC Articles of Organization
The next and most critical step in forming an LLC in Florida is to file your articles of organization with the Division of Corporations. Your articles of formation provide you the legal right to operate as a limited liability company in Florida.
The Articles of Organization are a legal document that forms your limited liability company (LLC) by giving out fundamental information about it. You’ll have to file Articles of Organization with the Florida Division of Corporations to make your company official. This paperwork can be filed online, via mail, or in person.
The following information is required by the Florida LLC articles of organization:
- The name of the LLC and its principal location of the business
- Name of the registered agent and his or her Florida physical address
- The signature of the registered agent
- The LLC’s members’ names and addresses
- If the LLC is managed by a manager, provide the name and address of the management
- If not the date of filing, the LLC’s effective date
- The member’s or authorized individual’s signature is required to complete the form
You must also provide a phone number and an email address where the state can contact you regarding your file. This information will not be publicly disclosed, but everything you enter on this form will.
4. Receive A Certificate From The State
After the LLC’s formation documents are filed and approved, the state will provide you with a certificate confirming the LLC’s formal existence. The LLC will be able to acquire an Employer Identification Number (EIN), business permits, and a business bank account with the help of this certificate.
5. Prepare A Florida LLC Operating Agreement
Florida LLCs are not required to establish an operating agreement under state law. However, we suggest that your LLC’s members sign a documented operating agreement. The operating agreement streamlines your LLC’s day-to-day operations and prevents member disputes.
It describes the members’ and managers’ rights and responsibilities, including how you will run your LLC. It can also assist you to keep your limited liability status by demonstrating that your LLC is a separate legal organization. In the absence of an operating agreement, your LLC will be governed by state LLC law.
Verify that your Florida LLC operating agreement has the following information at a minimal level:
- The LLC’s goal, as well as the products or services it provides
- The members’ names and residences are listed below
- The amount of each member’s contribution to the LLC
- The percentage of the corporation that each member owns, as well as their voting rights and profit-sharing
- The procedure for new members to be admitted.
- If the LLC is controlled by a manager, this is the process for electing a management
- The meeting schedule and vote processes for the LLC
- Terms and processes for dissolution
- Provisions of indemnification and liability
6. Obtain Your Florida Business License
A Florida business license is required for LLCs in a variety of industries. Check the Florida Secretary of State’s website to see if your industry or profession needs a business license.
7. Establish A Bank Account
In order to conduct business in Florida, LLCs should first open a bank account in the state. Read Our Guide On How Foreign Nationals Can Open A Bank Account?
8. Comply With Florida Employer Obligation
In addition to the measures outlined thus far, Florida LLCs with employees must also comply with the following requirements:
- Employee Reporting: Employers are required by state and federal law to report new employees to the Florida Department of Revenue within 20 days of their employment date.
- Paying unemployment taxes: For the first $7,000 in salaries, new Florida employers must pay a 2.7 percent payroll tax to support state unemployment insurance. Depending on the number of benefits their workers claim as well as their overall salary, established firms will pay a lower or higher rate.
- Acquiring workers’ compensation insurance: In most Florida industries, employers are required to obtain workers’ compensation insurance after hiring their fourth employee. For these purposes, LLC members are considered employees.
9. Get An EIN For Your Florida LLC
Employer identification numbers are required for Florida LLCs with employees or several shareholders, as well as those taxed as corporations. When you submit federal business taxes, the IRS will ask for your EIN. Your LLC will also require an EIN when registering for a credit card or a business bank account in Florida, as well as when applying for business loans in Florida or somewhere else.
Even though your LLC has no employees, it must acquire its own IRS Employer Identification Number (EIN) if it has more than one member. Only if your LLC will have workers or if you opt to have it taxed as a corporation rather than a sole proprietorship will you need an EIN if you register a one-member LLC. On the IRS website, you can register for an EIN by filling out the online application. There is no charge for filing.
10. File Your Annual Report
Florida is one of only a few states in the country that does not levy a state income tax. This means that the owners of a Florida LLC are exempt from paying state income taxes on their portion of the profits. For people forming an LLC in Florida, this can be a significant benefit.
The state of Florida requires LLCs to file an annual report electronically. The annual report’s objective is to keep the company information on file with the Division of Corporations up to date. To avoid late costs, the report must be submitted between January 1 and May 1 each year. Your LLC’s authority to operate in Florida could be terminated if it is not filed by the third Friday in September. The report must be supported by a processing fee of $138.75 at the moment of typing.
This vital identifying information regarding your LLC must be included in your annual statements:
- Name and address of your LLC
- EIN (Employer Identification Number)
- Your organization’s start date
- At least one firm manager’s contact information
- Any new information, such as a change in the registered agent, should be included
What Are The Next Steps Of Forming An LLC In Florida?
Once you’ve submitted your paperwork, you’ll need to wait for confirmation that your application has been accepted. If you filed online, you would receive an email confirmation. If you applied in person, you will receive confirmation in the mail. Following are some additional details to keep in mind once you’ve formed your LLC.
The formation of your LLC provides you with a legal base on which to conduct business. In addition to this, you have to plan to maintain your LLC up to date and compliant with the state’s website. Making quarterly tax payments is one example. All Florida LLCs are required to file an Annual Report once a year, with the first report due the year after incorporation. You must also have a registered agent for your company.
You can also perform the following with an LLC that is registered:
- Get the essential permits and licenses, such as health department permissions, zoning authorizations, home occupation permits, professional licenses, and more, to run your business. To perform transactions in some states, you’ll need a seller’s license
- The state’s tax agency will need you to register your business
- Open a bank account for your business
- Make an application for a company credit card
- Consider a company insurance purchase
- With a trademark, you can protect your company’s name and logo
In Florida, forming an LLC is a lot easier than you may assume. You can accomplish everything online from the comfort of your own home once you’ve decided on a unique name for your LLC. Above, I have highlighted the crucial steps on how to start an LLC in Florida.
Additionally, you can choose a name for your Florida LLC using a free website, but if you want to start an LLC legally, you must submit your formation documents with Florida’s business division, which is usually the Secretary of State.
If you’re a beginner, make sure you’re not sending any misleading information that could harm your company in the long run. There are several LLC services on the market that can assist you in registering your LLC much more efficiently.
Incfile is a popular business creation service that allows you to simply register and maintain your new LLC. The best part? It is absolutely free to form your LLC with Incfile and it is very easy to file formation and registration, the only state fee that you have to pay is $125.
Ready to start an LLC in Florida? Just choose a unique name, and form your LLC in the sunshine state easily! If you have any doubts, feel free to drop them in the comment section below! Our experts are there to assist you.
Frequently Asked Questions (FAQs)
1. Do I need a business license in Florida?
Your LLC may require additional local and state business permits, depending on the sort of business and its location.
2. Should I form an LLC in Florida?
If you’re just getting started in business or have been working as a sole proprietor for a while, you might think about incorporating an LLC. LLCs restrict an owners ’ personal liability for debts and lawsuits, and they provide a great deal of flexibility in terms of corporate ownership, management, and taxation.
3. What do you need to open an LLC in Florida?
You’ll need to file Articles of Organization with the Florida Division of Corporations to form a Florida LLC. The cost of filing is $125. This can be done either online or by mail through the SunBiz website. The Articles of Organization are the legal documents that establish your limited liability company in Florida.
4. How much does it cost to set up an LLC in Florida?
While submitting on your own is usually the lowest choice, completing all of the documents on your own can be difficult. Another option is to hire a lawyer, although this will usually cost you hundreds, if not thousands, of bucks.
1. The cost of filing the Articles of Organization with the Florida Division of Corporations is $125.
2. A fictitious business name can be registered with the Florida Division of Corporations for $50.
3. Annual Report & Supplemental Fee costs $138.75
4. The filing Fee costs $100
5. Registered Agent Fee costs $25
4. Is Florida a good state for an LLC?
There are various entities to choose from when starting a new business in Florida, ranging from sole proprietorships and partnerships to corporations and more. The Limited Liability Company, or LLC, is a growingly common structure. In fact, Florida ranks fifth among the best states to start an LLC.
5. Do LLCs pay taxes in Florida?
LLCs are exempt from state income tax, with the exception of those that are also incorporated, and their owners do not pay any tax to the state of Florida on the individual income they receive from their businesses.
6. Do I need an operating agreement for my Florida LLC?
Operating agreements are not required in Florida for LLCs, but they are highly recommended. An operating agreement will secure your limited liability status, eliminate financial and management disputes, and ensure that you, not state law, determine the rules that govern your organization.
7. Can I form a single-member LLC in Florida?
A single-member LLC in Florida is considered like a multi-member LLC for most reasons. When it comes to submitting a tax return, single-member LLCs have more choices.
8. Can a Florida LLC have only one member?
A single-member LLC in Florida is formed in the same way as a multi-member LLC. By submitting Florida LLC Articles of Organization with the Division of Corporations and paying the required fee, you can incorporate an LLC. A single-member LLC can be incorporated in a variety of ways, including online, by mail, fax, or in person.
9. How do I know if my Florida LLC name is available?
It’s critical that the name of your LLC stands out from the names of other firms registered with the Florida Division of Corporations. To ensure your preferred name is available, you can run a free name search on their website.
10. How long does it take to get LLC in Florida?
It will take two to five business days to establish your LLC entity, depending on how fast the state executes the filings.
11. Does Florida LLC provide outside protection?
Outside creditor claims emerge from the LLC’s debtor members’ claimed actions. Your objective is to protect the LLC assets from individual creditors if you are at fault in an accident or otherwise accountable to creditors. As a result, outside creditor protection is the name given to this kind of liability protection.
12. How much does an EIN cost in Florida?
The Internal Revenue Service provides a free service for obtaining an Employer Identification Number (EIN). Be cautious of websites that pay for this free service on the web.
13. Can I be my own registered agent for my LLC in Florida?
Yes, any business owner or employee who is over the age of 18 and has a Florida street address can serve as the company’s registered agent in Florida.
14. What licenses do I need to start a business in Florida?
A state-wide company operating license is not required or issued in Florida, which means you don’t need a license from the state of Florida to operate your business there.