Florida is a business-friendly state with enormous favorable benefits. A Florida LLC combines the tax advantages and flexibility of a partnership with the liability protection of a corporation. An LLC in Florida bestows potential tax advantages and protects personal assets from business liabilities.
Before forming an LLC, the first question lingering in your mind must be, “Is Florida a good state to form an LLC?”
To make it easy for you, the pros and cons of setting up an LLC in Florida have been stated below:
Pros
- Pass-through taxation
- Members decide the type of business structure they want (partnership or corporation)
- Strong liability protection
- Flexibility in management structure and business ownership
- No limit in the number of members
- Ease of subsidiaries formation
Cons
- Cost of maintenance
- Limited flexibility in transferring Business Ownership
- Certain advantages require presence in Florida
- Limited case law protection
Forming an LLC in Florida is easy.
Create a Florida LLC in five simple steps
Step 1: Name your Florida LLC
Choose a name for your LLC in Florida that complies with the Florida state law guidelines. The name must deliver the purpose of your company and be easily accessible by potential customers.
Follow the below guidelines:
- Your name must end with the phrase “Limited Liability Company” or one of its abbreviations such as “L.L.C.,” or “LLC.”
- Your name must be distinctive on the records of the Florida Department of State.
- Your name must not include state-restricted words such as bank, attorney, etc. unless a licensed individual is a member of your LLC such as a lawyer or your LLC has undergone paperwork to operate as such.
- Your name cannot include words such as Federal, State Department, etc., that imply a governmental agency.
- Your name must not deceive the public by implying a purpose other than stated in articles of organization.
- Check availability of the desired name by doing prior research with the Department of State: Division of Corporations Entity Name Search website.
- Check accessibility to a suitable domain name for your business. You may not want to expand your business online now, but it is advisable to get access to it for the future.
Note: Unlike many other states, you cannot reserve a name for your LLC in Florida.
FAQ
- How can I register a “Doing Business As” or a fictitious name in Florida?
You can register a fictitious name or a trade name or a DBA by filing the “Application for Registration of Fictitious Name” with the Florida Division of Corporations. The filing fee is $50. This can be done online or via mail and must be renewed after every five year.
File the Application for Registration of Fictitious Name: Download form OR Apply online.
Step 2: Choose a Registered Agent
A registered agent is an individual or business entity that accepts legal documents, service of process, and government correspondence in the interest of your business. A registered agent is a connecting link between your business and the state.
All LLCs in Florida are required to have a registered agent. Your registered agent must have a physical street address or be an entity legalized to do business in the state. An organization with PO Box as the only address cannot serve as a registered agent.
Advantages of a registered agent:
- Accepts lawsuits on behalf of your LLC
- Present during conventional business hours
- Enables you to be in private and focus entirely on growing your business
FAQ
- Can I be my own registered agent?
Yes, you or any member of your LLC can become a registered agent if they meet all the requirements.
Step 3: File an Articles of Organization for your Florida LLC
Articles of organization is a document that legally registers your LLC with the State. This document briefs the government about the functioning details of your company. You can file the articles of organization online or via mail with the Florida Division of Corporations. The filing fee is $125.
A foreign LLC will be formed if you are expanding your existing LLC to Florida.
The following details are required for filing the application:
- Name of the LLC
- The principal address of your business
- Name and address of the registered agent
- Name and address of the person(s) authorized to manage LLC
- The effective date of filing
- Authorized signature
File via mail: Download Articles of Organization for Florida Limited Liability Company form
File online: Articles of Organization
Mail to: New Filing Section
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
FAQs
- How much does the Florida LLC cost?
The filing fee is $125 and fee payable every year with the annual report is $138.75.
- What is a foreign LLC?
When an existing LLC expands its business operation to another state, it is known as a foreign LLC. A Certificate of Good Standing/Status is filed together with the articles of organization to register as a foreign LLC. This certificate verifies that the LLC was legally formed and is in compliance with the state regulations.
- How to order a Certificate of Status/Good Standing in Florida?
The Certificate of Status, also known as the Certificate of Good standing in other states, can be ordered online by filing the Certificate of Status-Sunbiz application with the Florida Division of Corporations. To order via mail, refer to the sunbiz website for details. The requesting fee is $5.
Mail to: Department of State
Division of Corporations
Section Name
P.O. Box 6327
Tallahassee, FL 32314
- How long does it take for Florida LLC formation?
It might take 2-3 business days if articles of organization was filed online. If the filing was done via mail, it might take 2-4 weeks.
- What is the difference between member-managed and manager-managed LLC?
- Member-managed: It is a decentralized management structure where the executive powers are distributed among the LLC members. The decision-making process requires a vote of every member as per contract.
- Manager-managed: It is a centralized management structure where the management rights are concentrated with the manager(s) of the LLC. Managers can take decisions for everyday affairs.
Step 4: Drafting a Florida LLC Operating Agreement
An operating agreement is an inner legal document that outlines the basic structure and functioning of the LLC. It states the rights and responsibilities of the members and managers.
This document is not mandatory to draft, but it is advisable to do so. This document ensures all the members are on the same page with the functioning of the company. However, this document is not rigid and can be amended as per requirement.
Every member must keep a copy of this document. In situations of conflict of interest or call for amendments, the operating agreement may be looked up for structural proceedings.
Mentioned below are some of the points that can be included in your Florida LLC:
- Distribution of assets and profits among the members
- Voting structure for decision-making
- Membership interests
- Rights and duties of members and managers
- Dissolution process
FAQ
- What is membership interest?
Membership interest represents the collective ownership stake of a member in an LLC. This includes profit and asset distribution, and voting interests. Membership interest can be amended if necessary.
Step 5: Get an EIN
EIN stands for Employer Identification Number. This unique nine-digit numerical code is issued by the IRS. Having an EIN is beneficial for your business that provides legitimacy to your business. The IRS uses this number to keep tax records of your LLC.
With an EIN, you can keep your Social Security Number personal and thus, avoid the chance of identity theft. Applying for an EIN is free and can be done online or via mail, or by fax.
Below are the few benefits of EIN:
- Lets you open a business bank account
- Gets you access to business credit card
- Apply for a business license
- Apply for business loan
- File and manage Federal and State taxes
- Separates your personal and business finances
- Hire employees
Apply for EIN online
Apply via mail or fax: Application for EIN
Mail to: Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
FAQs
- How much time does it take to get an EIN?
The number gets assigned immediately online. The mail-in process takes about four to eight weeks, whereas the fax arrives in four to seven business days.
- Do LLCs pay taxes in Florida? If so, which tax structure should I choose for my LLC?
Yes. LLCs are liable to pay taxes in Florida. However, an LLC does not pay state income tax in Florida if it is classified as partnerships or disregarded entities.
LLCs are taxed as a sole proprietorship or a partnership based on the number of members in it by the IRS. Accordingly, the IRS will tell you about the tax options available for your LLC.
There are abundant factors to keep in mind before selecting the tax status for your LLC (agenda of the company, financial plan, etc.) We recommend speaking to a tax professional can help for reaching a rational conclusion. For more details, visit the Florida Department of Revenue website.
- Which license and permits are required for business in Florida?
The requirement for different licenses and permits necessary to operate business in Florida depends on the type and location of your business. For details, visit the Division of Library and Information Services.
File an annual report
You are required to file an annual report with the Florida Division of Corporations. You must file the annual report online before 1st May every year. The fee is $138.75 to file the annual report for your Florida LLC. However, after 1st May, Florida charges a penalty fee of $400. If you fail to file your annual report by the third week of September, your LLC will administratively get dissolved.
File online through the sunbiz website: Annual Report
Dissolve an LLC in Florida
You can dissolve a Florida LLC in two ways – voluntarily or involuntarily. The latter option is simple but carries its own consequences. LLC owners may deprive Limited Liability Protection, and the company may get a forfeited status.
Voluntarily dissolving your LLC keeps your business compliant with the state. To do so, check the formational documents of your LLC – articles of organization or operating agreement. One of these documents must have the procedures mentioned for dissolution, such as asset distribution, notifying creditors, etc. If not, follow the below procedures:
- Take approval of all LLC members – Hold a voting process and record the number of votes in written to approve the resolution in the LLC’s meeting minutes.
- Winding Up
- Close your business tax accounts – Your LLC has many active tax accounts, licenses and permits associated with it under the Florida State government. Pay off all the debts and taxes. Cancel every license and permit.
- Discharge the liabilities of LLC
- Distribution of assets – Liquidate and distribute the profits and assets among the creditors and the members of your LLC.
- File the Articles of dissolution – File the articles of dissolution with the Florida Division of Corporation to voluntarily dissolve your LLC. This document asks for the following details:
- Name of the LLC
- Date when articles of organization was filed
- Assigned document number
- Occurrence that led to dissolution of the LLC
- Date of dissolution
- (If there are no members) the name, address, and signature of the person appointed in accordance with this subsection to wind up the company
- Authorized signature
File the Florida LLC articles of dissolution: Download form OR File online
The filing fee is $25, payable to the Florida Department of State. An optional certified copy of the processed articles can be availed by paying an additional $30 fee. Filings via mail take 5-7 days for processing, whereas it takes 2-3 business days if filed online.
Mail to: Registration Section
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314
Leave a Reply