Are you looking for a way to protect your personal assets from being sued by creditors? Perhaps, you want a more effective way to run your business. If this is the case, you might be looking to start an LLC in Florida. The process of forming a Florida LLC is relatively simple. In most cases, you can do it by filling out a few forms and paying a fee to the state.
Forming your own limited liability company means that you will control how the business is run. Still, unlike a sole proprietorship, with this type of business structure, your personal assets are safe from being taken if someone decides to sue the business. If your company goes bankrupt, your house and car will not be taken from you as payment for a debt because your personal liability is separate from the company’s liabilities with this business entity type.
Although the process is relatively simple, it does involve a few steps that you will need to go through to form the Florida LLC.
Benefits of starting an LLC in Florida
Starting a Florida LLC has many benefits. The main reason for most people to do so is to protect the business itself from possible lawsuits and personal asset protection. For example, if someone slips on your sidewalk and files a claim against you, they cannot access your personal assets. Your spouse’s bank account or car is safe, too, since those are not part of the company.
There are a few other significant benefits to a Florida LLC as well:
- The profits of an LLC are not considered personal income, so you will not be taxed on them as such. LLC owners report business income on their personal tax returns. However, they pay personal tax but not corporate taxes.
- There is less paperwork needed for tax purposes than some other form of business ownership.
- A Florida LLC also makes it easier to create partnerships with other companies since an LLC can have more than one business owner.
- You have more flexibility in terms of choosing how the business is run.
- Additionally, business funding options tend to be more readily available for LLCs than other business structures.
Florida LLC Rules & Requirements
Every state has its own specific LLC laws that business owners must meet before a business can officially operate as one. In general, there are a few requirements that you must meet to form a Florida LLC.
Best Florida LLC Formation Services
If you don’t want to hire a business attorney, but you also don’t mind paying a few bucks, some LLC formation services will help you form a Florida LLC and file the paperwork with the state. Some are less expensive than others, and some provide more excellent value. Please read our reviews and check our top list of best LLC formation services for 2023 to find out more.
The following is a step-by-step guide of what you can expect when forming an LLC in Florida:
The following is a step-by-step guide of what you can expect when forming an LLC in Florida:
6 Steps to Starting an LLC in Florida
- Step 1: Name your Florida LLC
- Step 2: Choose a Registered Agent
- Step 3: File your Articles of Organization
- Step 4: Create an Operating Agreement
- Step 5: Get an EIN for your Florida LLC
- Step 6: Annual Report
Step 1: Name your Florida LLC
The first step is to choose a name for your Florida LLC. The name must include the words Limited Liability Company, or one of its abbreviations: LLC, Ltd. Liability Co., or any other abbreviation that clarifies that you are an LLC.
For example, an acceptable company name would be “John Doe, LLC.” You can name your Florida LLC anything you want, as long as it does not include “bank,” “trust,” or any other financial term or terms that would suggest that your company is something that it is not, such as a federal government agency.
Additional paperwork may be required if your LLC’s name contains certain words such as “bank”, “attorney,” or “university”.
The name cannot be so similar to another registered active business that it could cause confusion or make people believe they are the same.
The Department of State’s Division of Corporations website contains a business name database of already registered businesses where you can run a business name search. You can also check with the Florida Department of State to see if your desired name is available before filing any forms or paying fees for your Florida LLC.
If you want to register a name for your LLC different from the business’s actual name, you can do so by registering a DBA (Doing Business As) or fictitious business name. You will need to register this fictitious business name with the Division of Corporations.
It is also worth checking to see if your desired company name is available as a domain name. You may be surprised to find that someone else has already claimed the website name you want. You can use a domain availability search tool such as Namecheap and register the domain for your Florida LLC website, as they offer some of the best prices.
Step 2: Choose a Registered Agent
A registered agent is a person or a business entity responsible for receiving legal papers during normal business hours, including service of process, on behalf of your Florida LLC. Florida requires that all limited liability companies have someone in the state to accept legal documents should any disputes or lawsuits arise against your business.
You can serve as your registered agent. Still, it is recommended that you hire an outside person or company to accept service on your behalf. The registered agent’s address will be available on the public record.
A registered agent can be any entity or person at least 18 years of age. It can also be another limited liability company in good standing. Many companies will serve as registered agents for your Florida LLC for a small fee. They may offer the service free if you hire them to do the business filing on your behalf and receive any legal business document or manage government filings during regular business hours. One of them is ZenBusiness. Using a registered agent service will enable you to avoid having your address on the public record.
You can read our ZenBusiness review and see how we rate them.
Step 3: File your Articles of Organization
Once you have your business name and registered agent, the next step is to file a Florida LLC Articles of Organization with the Florida Department of State. You can use the online form to file your Florida LLC, or you can download the Articles of Organization form and mail it to:
New Filing Section
Division of Corporations
PO Box 6327
Tallahassee, FL 32314
The Articles of Organization will include your business name, your registered agent’s name and physical street address, the business’s physical address, and the name and address of each person who is signing to establish the LLC. All members will need to sign this form to be valid for Articles of Organization.
Step 4: Create an Operating Agreement
After filing your Florida LLC Articles of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your Florida LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
Florida does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your Florida LLC, so there are no misunderstandings down the line.
Step 5: Get an EIN for your Florida LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your Florida LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your LLC’s various tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6: Annual Report
An annual report is a document that all LLCs must file with Florida every year. This report includes information such as the name and business address of your Florida LLC, the name and address of your registered agent, the business address, and the name and address of each member.
An annual report is a way for Florida to keep track of all of the active LLCs in the state. It is also a way for the state to collect information about each LLC’s members and registered agents. Filing an annual report is mandatory for all LLCs in Florida. Failure to do so can result in fines and other penalties.
Filing your annual report is a straightforward process. You can do it online at the Florida Department of State’s online service. The current annual report fee is $138.75.
Florida LLC Processing Time
Online filings take 2 to 4 weeks for the Division of Corporations to process your Articles of Organization and approve your LLC.
These are the basic steps to start a Florida LLC. Whether you need help or want more information, there are resources available to you, including the state of Florida’s website and legal experts.
You may need to take a few additional steps to establish your Florida LLC fully. Below are a few of the most common:
New employee reporting: Florida requires LLCs with employees to report new hires to the state within 20 days of their hire date.
Unemployment tax payment: Florida LLCs are responsible for paying unemployment taxes on the first $7000 in wages. This tax is paid to the state at a rate of 2.7%.
Workers’ compensation insurance: Florida LLCs must purchase workers’ compensation insurance. This insurance provides benefits to employees who are injured or become ill due to their job.
Professional Liability Insurance: You may consider purchasing professional liability insurance for your Florida LLC. This type of insurance protects you from lawsuits alleging that you or your employees committed errors or omissions in your work.
Open a business bank account: It is good to open a business bank account for your Florida LLC. This account will help keep your personal and business finances separate and make filing your taxes a little easier.
Apply for a business credit card: A business credit card can be a helpful tool for tracking your business expenses. It can also help you establish business credit, which can be helpful if you ever need to take out a business loan or lease office space.
Florida LLC Frequently Asked Questions
How much does it cost to start an LLC in Florida?
The official fees used to start an LLC in Florida are as follows:
Annual report filing fee: $138.75
Filing Fee: $100.00
Registered Agent Fee: $25.00
How much does it cost to maintain an LLC in Florida?
The state of Florida charges an annual fee for your LLC to remain active. The amount is $138.75, and it must be paid every fiscal year.
How long does it take for an LLC to be approved in Florida?
The time it takes to approve an LLC in Florida varies. It can take 2 to 4 weeks, depending on the backlog of other applications.
Do LLCs pay taxes in Florida?
No. LLCs do not pay State Income taxes in Florida. They only file an annual report and pay a $138.75 fee to maintain their status as an active company.
How much is an EIN number in Florida?
The IRS issues an EIN number to all businesses for free.
How long does it take to get an EIN?
Online application: Same Day or Next Business Day
Fax Application: About 4 business days
Mail Application: Within 4 weeks.
Does Florida allow single-member LLC?
Yes, Florida allows single-member LLCs.
Does an LLC need a business license in Florida?
An LLC does not need a business license in Florida. However, certain types of businesses are required to have one.
Can I be my own registered agent in Florida?
An entity cannot be its own registered agent in Florida. An LLC must hire an external third party to act as its registered agent. However, an individual can act as their own registered agent.
Does Florida have an annual LLC fee?
Yes. The state of Florida only charges $138.75 per year as a form of corporate tax for each LLC registered in the state.
How do I get an EIN in Florida?
Is Florida a good state to form an LLC?
Yes. Florida is generally considered a good state to form an LLC because it has low annual fees. Registering for an LLC does not require much time or effort.