It's an exciting time to be a business owner in Florida. You are responsible for your own success, and the only thing standing between you and success is deciding which type of entity will work best for your company.
If you think it might be an LLC, we can help! In this blog post, we'll provide information on how to get an LLC in Florida so that you can make sure you cover all bases, such as the articles of organization, before starting out on the right foot. It applies whether you're a Florida single member LLC or not.
Choose a Name for Your Florida LLC
Any business entity like an LLC in Florida needs its own business name. Of course, the business name needs to be unique and not violate any of Florida's laws that prohibit certain terms from being used in business names.
The best way to find available business names is by searching the Florida Division of Corporations official business website.
You can also opt for a fictitious business name but keep in mind that this business name can be used by someone else too.
This business name search is a free and easy way to find available business names.
Florida Division of Corporations register will list all business names that match your criteria, so you can sort them by registration date or alphabetically.
Suppose you want a business name with less competition. In that case, the business name search can help you find it as well by showing which business names have not been registered in the Florida Division of Corporations register yet.
Florida has laws prohibiting certain terms from being used in business names. These include:
- Alcoholic Beverages - the words "alcohol" or "liquor."
- Savings and Loan Associations - any term related to savings, such as "savings," "bank," etc.
- Funeral Homes – any word containing "funeral" or "mortuary."
For a detailed list of prohibited terms, make sure to consult the Division of Corporations.
Find a Registered Agent Service
If you're setting up an LLC in Florida, it's important to find a registered agent service before taking the next steps. These offer an LLC formation service and can give business advice.
A registered agent service handles some of the legal, administrative, and tax-related paperwork for your business on an ongoing basis, like the articles of organization.
The services that are provided can vary depending on the provider, but they often include:
- Handling state and/or local taxes by filing the appropriate forms
- Handling routine tasks like receiving official mail, handling legal documents and forwarding to the correct recipient, and updating your company's information in various databases
- Receiving bank statements on behalf of your LLC so you can keep track of its financial status
Whether it's worth paying a registered agent depends on your needs. If you're a small business owner with limited needs, you may be able to handle everything on your own.
If you're not sure whether or not it's worth the investment, talk to a business accountant and ask for their opinion.
File Florida Articles of Organization
The Florida LLC Articles of Organization is a document that contains the name and address of your LLC in Florida, as well as information about directors (the people who run your business), LLC capitalization (what type of company you are), and what kinds of shares, exist in this Florida Company.
The Florida Articles of Organizations can be filed online, either with the Florida Division or the Florida Department of State.
There are Florida Articles of Organization for every Florida LLC, even if you do not yet have a Florida Company.
If your Florida business does not exist yet but is in the process of forming, file articles to create it before submitting more information about this new company or applying for permits and licenses- like an EIN from IRS with Florida Department of Revenue.
Florida Articles are necessary documents for Florida LLCs and should be filed with the State before any other legal documentation is created or submitted.
If you file your Florida Articles online, there will also be a $25 fee to comply with Florida law for e-filing services.
Create a Florida LLC Operating Agreement
An LLC operating agreement is a document that establishes the rules for how an LLC will be managed. It typically includes the following provisions:
- What percentage of ownership each member has in the company
- Who can make decisions on behalf of the company or have voting rights at meetings (e.g., managers, board members)
- How meetings are conducted and by whom
- What happens if a member chooses to sell or transfer their ownership in the company
- Whether members will bear any future expenses
An LLC operating agreement is not required, but we highly recommend that you have one since your business could be exposed to liability without one.
If you don't have an LLC operating agreement, a court may end up making decisions for you.
Apply for an Employer Identification Number (EIN)
EINs are issued by the IRS and allow businesses to have a unique number used for their tax identification.
EIN, also called Federal Tax Identification Number (FTIN) or Federal Employer Identification Number (FEIN), helps ensure anonymity when filing taxes, including if there is more than one owner of the LLC.
The IRS website has a form to apply for an EIN that is free, but the applicant will need their Federal Taxpayer Identification Number (TIN) and business bank account information.
You can also go into any local office of the Internal Revenue Service to apply for an EIN in person with proper identification.
You are not required to have a social security number in order to obtain an EIN.
Choose the Type of Your Florida LLC
You can structure LLC in Florida in three ways:
- As an S or C corporation, which is taxed separately from the company's profits
- As more than one member LLC, with different members having specified management rights on day-to-day business decisions and profit distribution
- Or as a single-member LLC
Single-member LLCs provide flexibility because the member is responsible for all of the company's activities.
They are taxed as disregarded business entities, and they report income on the owner's personal tax returns.
LLCs with more than one member offer a balance between flexibility in decision making while still protecting from personal liability for lawsuits against other business partners or employees.
However, it can be difficult for LLCs with more than one member to make decisions because members will have different opinions and goals.
Additionally, multi-member LLCs don't file taxes as LLC. Instead, all LLC members pay taxes individually. This means that this type of business structure offers better personal asset protection.
Lastly, a C corporation is taxed separately from the company's profits and may have a higher tax rate than other business structures.
However, there are fewer responsibilities for maintaining records because it operates as an individual person who owns the C corporation.
File your Florida LLC Annual Report
Every LLC in Florida is required to file an annual report with the Florida Department of State.
The annual report filing fee is $138.75, and a late fee will be added if you don't submit your annual report on time.
There are two ways to file an annual report: (a) by mail or (b) online through the Division of Corporations.
Failure to file annual reports will result in a late filing fee ($400), and the report may not be accepted as filed if it is overdue.
Do LLCs Pay Taxes in Florida?
Some limited liability companies in Florida pay state taxes, while others don't.
The professional limited liability company classified as a partnership or disregarded entity is not required to pay state income tax in Florida.
If your limited liability company falls under a partnership or disregarded entity classification and you want to be registered with the Department of Revenue so that you can pay state taxes in Florida, fill out an application for sales tax registration from the department's website.
Limited liability companies set up as C corporations are subject to state income taxes in Florida, but limited liability set up as S corps and sole proprietorships are not.
How Long Does It Take To Get an LLC in Florida?
It usually takes at least two weeks to process LLC formation, but you can choose expedited service and get your LLC in as little as 2-3 days.
Online filings are quicker because they don't require a physical signature on the Articles of Organization form like paperwork filed by mail does.
You'll also have to pay an extra fee expediting processing if filing paperwork by mail.
The option of expedited filing is useful for those business owners who have little time to spare and need to set up their Florida LLC as quickly as possible.
Does Florida Have an Annual LLC Fee?
Yes, Florida has an annual LLC fee. Florida law requires an annual filing report from every LLC in Florida.
The filing fee is $138.75, and there are additional fees if professional limited liability company owners fail to file the report in due time.
Annual reports are due by the first day of May every year. If the filing fee is not paid by this date, the filing will be considered delinquent.
The filing fee can be paid online or in-person at the Division of Corporations, Office of Business Services location nearest you.
If you happen to expand your business and register it in another state, you will need another registered agent services in that particular State, and you'll also need another yearly report.
Is Florida a Good State to Form an LLC?
Florida ranks high on the list of desirable states to form an LLC because, according to the US Census Bureau, Florida has a 6.00 percent sales tax rate.
It also ranks high in terms of low unemployment rates, as determined by the Department of Labor National Unemployment data.
In addition, Florida ranked among the top ten states with respect to property taxes and corporate income tax on average - which are two major taxes that affect LLCs.
Finally, Florida ranks lowest when it comes to individual income tax rates in the US - which is a huge relief for business owners trying to keep their company afloat.
This means companies can more easily invest those funds into other ventures and grow their business without having to worry about high costs from sales or income taxes.
The average corporate income tax rate in Florida is currently at 5.5 percent, which makes it one of the best states to form an LLC.
The individual income tax and sales tax are also low enough that they create a much more favorable environment for business owners who want to operate outside of the typical commercial space like expensive strip malls or retail spaces.
How Long Does It Take Sunbiz to Approve LLC in Florida?
Sunbiz is the Florida Division of Corporations in charge of processing and approving business license and certifications. It represents the official entity register.
Depending on how busy they are with other requests for business licenses, it can take anywhere from one hour to three weeks for Sunbiz to approve an LLC application.
The average wait time is about five days - most people approved within 24 hours or less than a week to get a Florida LLCs business licenses.
Do I Need to Renew My LLC Every Year in Florida?
Florida LLC renewal is required every year, and this process involves submitting a renewal form, fee, and tax report.
The LLC must be registered for the current year with Florida Sunbiz before submitting an annual renewal application in order to avoid late filing fees.
In addition, you may also have to file other forms if your ownership has changed or if there are any changes in the company name, business address, or business structure.
Renewal for your LLC in Florida is filed with Sunbiz using the online filing service to file a Florida annual report and pay the fee.
The information you are required to include in your renewal form must contain:
-your business name and mailing address
-the current year of registration and effective date
-a statement that the LLC is in good standing with its filed documents for the last fiscal year and you are still operating as a Florida limited liability company
-the members (owners) of the company and their mailing addresses (applicable even in sole proprietorship structures)
Can a Foreign LLC Conduct Business in Florida?
Yes, a foreign LLC can conduct business in Florida. The first step is to file an application with the Florida Department of State.
In order to qualify as a foreign Florida LLC, the LLC must have a physical presence in Florida.
This means that the business entities should maintain an office, a representative, or store at which it conducts its day-to-day operations within this State. It applies when they hire employees or make business transactions.
Other requirements include the same procedures you would otherwise need in order to obtain a business license and become an LLC formation in Florida.
Can You Have a Florida LLC Without an Operating Agreement?
No, you don't necessarily need to have an operating agreement to start an LLC in Florida.
However, not having an operating agreement leaves your LLC vulnerable to certain circumstances that may arise in the future.
An operating agreement shields LLC members against potential disputes and issues with how to split business profits in case one of the members wants out.
These are only some of the potential scenarios that you can easily resolve through operating agreements.
Can I Be My Own Registered Agent for My Limited Liability Company in Florida?
A registered agent can be an individual or business entity that services the company's processes on behalf of that company.
The very entity can not be its own agent, but someone who is associated with the business can.
The only two requirements that are non-negotiable are that this individual needs to have a Florida street address and be of legal age.
However, hiring a professional registered agent service is always the best option because there are a lot of legal intricacies to handle.
Setting up an LLC in Florida is a straightforward process, but it is not easy.
As aspiring LLC owners, it takes some time and effort to decide on several things before the LLC can start operating in Florida, such as business licenses.
These include what type of business entity you want to be, as well as choosing a registered agent for your company or hiring one out. Provided that it is well-formed, an LLC in Florida can be a really valuable asset for your business.