How to Form a Florida LLC
If you decide that a limited liability company (LLC) is the right legal structure for your Florida business, this page will help you understand how to form one. Just follow along with the six easy steps below to create your Florida LLC.
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What Is an LLC?
Like corporations, LLCs provide limited personal liability for their members. Liability protection helps to shield members' personal assets from their business's obligations.
To illustrate, imagine that your business becomes insolvent (bankrupt). With an LLC, your business's creditors cannot go after your home, vehicles, or personal accounts to pay off your business's debts. They can only seize business assets to cover your company's obligations. This is a significant advantage of the LLC business structure and one of the main reasons companies choose LLCs. Further, forming an LLC is easy, and you can accomplish most of the steps online. Incorporation is a more complex process and is unnecessary for most small businesses.
Like partnerships, LLCs offer pass-through taxation. With pass-through taxation, members pay the taxes on their share of the LLC's profits and losses through their personal income tax returns. This can be preferable to corporate taxation. When corporations pay taxes, they can be subject to so-called “double taxation." This occurs when the corporation pays business taxes and stockholders pay taxes on their dividends too.
Step 1: Choose a Name for Your LLC
When you start an LLC, it's important to have a unique and memorable name to identify your business and drive sales. You may already have a name in mind for your new business, but you should check for availability before you commit to one. There are also some naming rules that Florida LLCs need to follow.
First, you should run a name search on the Division of Corporations Business Name Database. This will give you results of registered businesses in the state of Florida. If there are no matches on this database, you should do a quick screening search on the internet next. Simply type your desired name into your favorite search engine to see if another company is already using your name.
If an internet search does not yield any matches, you should check the U.S. Patent and Trademark Office (USPTO), too. This will help you to avoid infringing on another company's trademark. The USPTO provides a searchable database of registered trademarks.
Finally, it's wise to check for domain name availability. Even if you don't launch a company website right away, it's a good idea to secure your domain name for future use.
After you have settled on a unique name, you need to make sure to follow Florida's naming laws. According to Florida's Revised Limited Liability Company Act, your LLC name must:
- Include the words "Limited Liability Company" or the accepted abbreviated forms "LLC" or "L.L.C.", "Ltd.," or "Co."
- Be different from the names of existing businesses
- Not imply that the business has a purpose other than the one listed in its articles of organization
- Not contain language that would confuse the LLC with a governmental agency, corporation, or other registered entity
Note that your company name must be substantially different from other Florida business names. For example, you cannot just add a suffix, punctuation, abbreviate a word, or make other minor changes to an existing company name. Your name must be distinct and not easily confused with other Florida businesses.
Step 2: Choose a Florida Registered Agent
A registered agent is the person who agrees to accept service of process if your LLC gets sued; the agent also accepts mail on the LLC's behalf. One of your company's owners or managers can be your own registered agent. They just need a physical address in the state of Florida and a business address that is the same as your company's registered address. You cannot list a P.O. Box as your registered agent's mailing address.
If none of your owners or managers can act as your registered agent, you could consider hiring one. Many registered agents advertise online and provide this service for a small fee. If you have a business attorney, they may offer registered agent services too.
Step 3: File Your Florida LLC Articles of Organization
Your Articles of organization act as a charter to formalize the existence of an LLC. This document must lay out these essential facts about your business:
- The LLC name
- The mailing address of the LLC's principal office
- The registered agent's name, address, and signature
- The LLC's purpose if it is a professional limited liability company
Although not required, you have the option of giving the following information:
- Your LLC's management structure (member-managed or run by managers)
- Names and addresses of the LLC's managers or members
- Members or managers' rights and responsibilities
It's a good idea to include this optional information. You may need to file these details with the state before financial institutions will open an account for your business.
Once you (or your attorney) have written your Articles of Organization, you need to file them with the Florida Division of Corporations. The filing fee is $125, payable with a credit card, debit card, or sunbiz account. You can submit your forms and fees through the Florida Division of Corporations website. For an additional fee, you can request a certified copy of your filing.
Step 4: Create an Operating Agreement
An LLC operating agreement is a key legal document that all LLCs should have. You are not legally required to have an operating agreement in Florida. But financial institutions may ask for this document before they open a business bank account or offer a loan to your business. Potential investors, accountants, and other professionals may insist on seeing an operating agreement before doing business with your company.
Generally, an LLC operating agreement covers the following:
- Basic company information
- Your LLC's purpose
- Percentage ownership of each member
- Procedures for bringing in and releasing members
- The management structure. This section should include the authority and responsibility of members and managers.
The provisions in this agreement form a contract among the members of your LLC. In the event of future conflict among members, this contract can help to resolve misunderstandings.
If you own a single-member LLC, you do not have to worry about conflict among members. But you should still have an operating agreement. A single-member LLC operating agreement may be necessary for banking and other professional services. Further, an operating agreement helps to establish the legitimacy of your LLC.
Step 5: Comply with Tax, Regulatory, and Licensing Requirements
Your legal requirements will vary depending on the type of business you operate. However, all businesses will have tax obligations of some sort.
If your business sells goods, collects sales taxes, and has employees, then you likely must register with the Florida Department of Revenue (DOR). To find out whether you will need to collect Florida sales tax, you can check the Department of Revenue's sales tax guide. You can use their online business tax application to arrange to pay sales taxes if necessary.
You will also need to apply for an employer identification number (EIN) if you hire employees. An EIN is also known as a federal tax identification number. It's a unique number that identifies your business for tax purposes. In this sense, it's similar to a social security number for individuals.
To get your EIN quickly and easily, you can file online via the Internal Revenue Service (IRS) website.
The business licenses and/or permits you need will depend on the nature of your business. You can learn more at the Florida Department of State. If you think that your business might need a federal license, you should consult with the Small Business Administration (SBA). The SBA's website gives an extensive list of the business activities that need federal licensing.
Step 6: File an Annual Report for Your Florida LLC
Under Florida law, all LLCs have to submit an annual report to the Department of State. The deadline for this report is May 1st of every year. So, if you form your LLC in March of 2022, you need to file an annual report before May 1st of 2023, and every year thereafter. There is a filing fee of $138.75. You should avoid a late filing because this results in a $400 late fee.
Your annual report needs to include this basic identifying information about your LLC:
- Your LLC's name and address
- Your EIN number (if you have one)
- Your date of organization
- Contact information of at least one company manager
- Any additional information, such as a change of registered agent
You can submit your annual report online with the Department of State.
Florida Limited Liability Company FAQs
Can I do business under a different name?
Yes. But if you would like to operate under a different name from your LLC's name, you need to register a fictitious name with Florida's Division of Corporations. A fictitious name is sometimes called a DBA name (a “doing business as" name). It can be useful to have a fictitious name if you would like to go into another area of business or sell a different product under a separate company name.
You can learn how to file a DBA name in Florida with FindLaw's four-step process here.
Is my out-of-state LLC valid in Florida?
If you created an LLC outside of Florida (a “foreign LLC"), you can register it in Florida by filing a form with the department of state. Along with this paperwork, you need to pay a $125 filing fee.
To complete the foreign LLC form, you need to provide some basic company information. This includes the LLC name, address, location of the foreign LLC, and registered agent. Your LLC's name will need to be distinguishable from any other registered Florida business.
Can I change my LLC's registered agent?
Yes. Under Florida law, you can change your registered agent by sending information about the new registered agent to the Florida Department of State. The fee for this change is $25 and the registered agent change form is available here.
Another way of accomplishing this is by giving information about the new registered agent on your annual report.
Do I have to file an operating agreement in Florida?
No. Florida does not require LLCs to file an operating agreement. An operating agreement should not be confused with articles of organization. Articles of organization are required, and you will need to file them when you register your LLC.
An operating agreement is optional, but you will probably find that it is a key legal document for your business. Most financial institutions will ask for an operating agreement before offering a loan or opening a bank account for the LLC. Other professionals may also want this document before providing you with services. There is more information on writing an operating agreement in step four above.
You should keep this document in a file along with other important business documents. You do not submit your operating agreement to the state.
How do I terminate my Florida LLC?
If your circumstances have changed, you may need to close your business.
Terminating (“dissolving") your LLC is easy to do in Florida. You can file your articles of dissolution online here. You will need to provide:
- Your LLC's name
- Date and reason for dissolution
- Your members' names or the name of the person who is winding up the company
After you have submitted the articles of dissolution online, it will take two to three business days for the online system to reflect this change.
What if I don't file an annual report?
You need to file an annual report to continue operating your Florida LLC. If you fail to submit an annual report, the department of state may dissolve your LLC. Under Florida law, they can dissolve your LLC if you do not submit your annual report by the third Friday in September.
So, remember to mark your calendar to file your annual LLC report by May 1st of every year. This will allow you to continue running your LLC legally and avoid the $400 late fee.
For Further Assistance With Your Next Steps
Fortunately, forming an LLC in Florida can be a straightforward process with FindLaw's Business Formation Service. However, if you have specific questions about your business, contact a business organizations attorney (link) near you today.
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