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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.
An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.
Luckily for Florida-based entrepreneurs, forming an LLC in the Sunshine State is a relatively straightforward process without unusual requirements or hefty filing fees. Therefore, starting an LLC in the state shouldn’t prove too difficult.
To avoid a misstep in the filing process, follow these steps to start an LLC in Florida, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Florida step-by-step
1. Select a name for your Florida LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the state of Florida:
- An LLC’s name must be clearly distinguishable from the names of existing business entities on file with the Florida Division of Corporations. Search the Florida Division of Corporations’ business name database to confirm that your chosen name is available for use in the state.
- An LLC’s name is required to contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “L.L.C.”, or “L.C.” The words “Company” and “Limited” may be substituted with the abbreviations “Co.” and “Ltd.”, respectively.
Reserve your LLC name
Unlike in most states, Florida does not allow people to reserve a business name prior to legally organizing an LLC.
2. Designate a registered agent
As in every U.S. state, forming an LLC in Florida requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.
The registered agent must either be a state resident or business entity with a physical street address in Florida OR if the individual or business is based out-of-state, they must have a business office in Florida
3. File Articles of Organization
An LLC is officially organized in Florida through the filing of Articles of Organization with the Florida Division of Corporations. Filing the articles can be done online or by postal mail. The filing fee is $125 and payment can be made by check, money order, or credit card.
Your Florida LLC’s Articles of Organization must provide the following details:
- LLC name
- LLC principal address
- Registered agent’s name, address, and signature
- LLC managers names and addresses
- The date the LLC was formed
- Members’ signatures
Foreign LLCs that intend to do business in Florida
LLCs that were formed outside of Florida but plan to do business in the state are required to register with the Florida Division of Corporations.
Follow these steps to render your LLC eligible to operate in Florida:
- Comply with state LLC naming guidelines and confirm that your name is available for use in Florida by searching the Florida Division of Corporations’ business name database.
- Appoint a registered agent authorized to work in Florida
File a Qualification of Foreign LLC with the Florida Division of Corporations and pay the $125 filing fee. When submitting the application, LLC members must include a Certificate of Existence from the state in which the LLC was formed. The certificate must be dated from within 90 days or less of the date of its filing with the Florida Division of Corporations.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Florida, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.
The operating agreement should do the following:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- Detail how the LLC will be run
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).
The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Fulfill your Florida LLC’s additional legal obligations
Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
Florida LLCs and foreign LLCs doing business in the state are required to file an Annual Report once a year to hold on to “active” status. An LLC’s initial annual report is due between January 1 and May 1 in the year following its organization. Filing can be completed online and the fee is $138.75.
LLCs that file their annual report late will be required to pay a $400 late fee on top of the standard filing fee.
Register to pay state taxes
A percentage of Florida LLCs, including those that collect sales tax and those with employees, must register with the Florida Department of Revenue. In most cases, the registration process can be completed online or by filing a paper application through the mail or in person at the DOR office.
Check the Florida DOR website for a complete list of state taxes and fees that require businesses to register with the Department.
Obtain business licenses and permits
Some LLCs may be required to obtain one or more state or locally-issued business licenses, permits, or certifications depending on the nature of their business and the area in which they are located.
Visit the MyFlorida.com website for detailed information on state business licenses, and consult with a city clerk in your municipality for information on fulfilling local regulations.
Florida LLC checklist
A Florida LLC’s name must obey the following guidelines:
- Must be distinguishable from the names of existing businesses already on file with the Florida Division of Corporations.
- Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “L.L.C.”, or “L.C.” The words “Company” and “Limited” can also be substituted with the abbreviations “Co.” and “Ltd.”, respectively.
Required formational documents and filing fees:
- Articles of Organization – $125 filing fee
- Qualification of Foreign LLC – $125 filing fee (LLCs formed outside of Florida, only)
An LLC is created in Florida by filing Articles of Organization with the Florida Department of State, Division of Corporations.
Additional legal obligations:
- Annual reports – Mandatory for all Florida LLCs
- State and local business licenses – Required for some types of businesses
- Florida DOR registration – Required for some types of businesses