Are you about starting a business in Florida and want to form an LLC? If YES, here are the exact requirements to start an LLC in Florida and how much it cost. A Limited Liability Company or more commonly referred to as “LLC” is a type of a business entity. This business entity is most preferred by entrepreneurs, investors, and small business owners because of the myriads of benefits the business entity carries.
The LLC business entity gained popularity in recent years because it provides flexibility with taxation and provides strong liability protection for the owners, even in Florida.
A Florida LLC (Limited Liability Company) is a legal business structure in Florida that provides personal asset protection to its owners (called “members”). LLCs in Florida are used to run businesses and they are also used to hold assets, such as real estate, boats, aircraft, and vehicles.
Why Incorporate an LLC in Florida?
A Florida LLC harnesses the benefits of both the Sole Proprietorship/Partnership (pass-through taxation) and the Corporation (liability protection for the owners). LLCs also have less formalities and annual requirements than Corporations, usually making them much easier to manage.
The owners of a Florida LLC are called “members.” The Florida LLC may be managed by its members, or members may appoint managers to run the business. Again, there exists a document that governs the owners’ relationship with each other, and it is called an Operating Agreement. If drawn up correctly, the document would identify each member’s interest in the LLC, show how the LLC will be managed, and what happens if there are disagreements in the company formation.
Florida courts provide strong liability protection to owners of LLC’s. LLC members are not personally liable for the company’s debts or commitments. However, members may still be liable for debts if they personally undertake them. Technically, all members can partake in managing the company, but smooth business operations are normally left to a centralized group. You can also designate one or more owners to take on daily operational responsibilities of the LLC.
If you want to start a business in Florida, you should know that forming a Florida LLC gives your business some of the protections that corporations enjoy. It protects you against lawsuits, prevents your business from being over-taxed, and makes your business look more credible.
Running your business as an LLC can also reduce the amount of paperwork that you complete each year, making your business life generally easier. This guide will walk you through the steps required to form and organize an LLC in Florida.
A Detailed Guide to Starting a LLC in Florida and How Much It Cost
- Provide a name for your company or organization
The first stage in forming an LLC in Florida is to choose an appropriate name for your company. This is in fact one of the most important steps in the process. Be sure to choose a name that complies with Florida naming requirements and is easily searchable by potential clients.
There are some laid down rules you have to follow when picking a name for your company. They include;
- Your name must include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork to file and would need a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- Professional LLCs that are formed after 2014 must include the words “professional limited liability company” or the abbreviation “P.L.C.” or “PLLC”
- Your name must be unique and distinguishable from all other entities filed with the Florida Department of State, Division of Corporations (DOC). If your name is similar to another LLC, you can obtain written permission from that business to use the name.
- The name must be used by the LLC while transacting business in Florida, unless an assumed name is adopted.
Please not that an LLC’s name is not considered distinguishable when its only difference is:
- The symbol “&” or the word “and”
- The use of a suffix
- A definite/indefinite article
- The plural, singular or possessive version of a word
- Punctuation marks
- An abbreviation of a root word
The name of your LLC should not have language implying or stating that you are affiliated with the government agency. It should not imply that the LLC was organized for a different purpose than the one authorized by the RLLCA and LLC’s articles of organization.
Picking a name can be an uphill task, and you do not want to pick a name that has already been taken. To prevent that, you have to do a name search on the State of Florida Sunbiz website. Another thing you have to do is to check to see if your business name is available as a web domain. Even if you don’t plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it, and making things difficult for you when you finally need it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google’s G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more.
LLCs in Florida can operate under a fictitious name for a small fee. If you intend to use the name of your LLC as a trademark, trade name, or domain name, searches should be conducted with the US Patent and Trademark Office before applying.
- Choose your preferred agent who must be registered
The next step to take when forming an LLC in Florida is to choose a registered agent. What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. This person would act like your business’ point of contact with the state.
Your LLC needs a Registered Agent that will receive the Service of Process on its behalf. Service of Process includes legal documents such as notice of lawsuits, subpoenas, summons, and complaints. Not having a Florida Registered Agent opens your LLC to various penalties.
Worse, the Florida Department of State may even administratively dissolve and shut down your LLC if you fail to comply with this requirement. Administrative dissolution means your LLC won’t be able to do business in the state anymore.
For your registered agent to be considered valid and suitable, the agent must be a resident of Florida or a corporation authorized to transact business in Florida. You may elect an individual within the company including yourself for this role. If your LLC’s Registered Agent is a person, then he/she is required to be at least 18 years old.
- File the Florida Articles Of Organization
The next logical step to follow when forming an LLC in Florida is to file your article of organization with the state of Florida. You can file this article easily online at the MyFlorida Sunbiz website or by mail. Note that when filing on Sunbiz or by mail, you will be asked for the name and address of the person(s) authorized to manage your LLC. Only your company managers should be listed here.
If your LLC will be manager-managed, only the manager’s name is required unless the manager is a company or an authorized representative (such as a registered agent service.) By providing only necessary information, you will protect the privacy of your LLC managers.
You have until the due date of your LLCs first annual report to decide how your LLC will be managed. It is recommended that you learn more about member-managed and manager-managed LLCs before you file.
The filing fee for your Florida LLC articles of organization is $125. This is a one-time fee. Your Florida LLC will be approved in 1-2 business days if you file online. It will be approved in 5-7 business days if you file by mail, and Your Florida LLC will be approved in 30 minutes if you file it in person.
You can file your Florida LLC online by using this address https://efile.sunbiz.org/llc_file.html
If you prefer to send by mail, you can access the form from this online address, http://form.sunbiz.org/pdf/cr2e047.pdf, then fill and send.
You can make the recommended payment by check or money order and make it payable to “Department of State”. Send your completed Articles of Organization and $125 filing fee to:
- New Filing Section
- Division of Corporations
- PO Box 6327
- Tallahassee, FL 32314.
When filing your Florida LLC in person, you are required to bring your check or money order (payable to “Department of State”), and your Completed Articles of Organization to the Division of Corporations at:
- Clifton Building
- 2661 Executive Center Circle
- Tallahassee, FL 32301
To make sure your Articles of Organization is processed on the same day, you should arrive at their office before 4:30 pm. But know that you cannot arrive late and expect to finish on time or even on the same day. Things you need to have at hand while filing your Articles of Organization include:
- LLC name
- Principal office address
- Florida Registered Agent (name, street address, and signature)
- Name and address of each member and/or manager
- Effective date
- Additional provisions (if applicable)
- Name and signature of your LLC’s organizer
While filing your LLC Articles of Organization, the Florida Division of Corporations also allows you to order a Certified Copy (of your Articles) for $30 extra and/or a Certificate of Status for $5 extra.
After the Florida Department of State approves your LLC, you will be given a stamped and approved copy of your Articles of Organization, an Acknowledgment Letter, and a Certified Copy or Certificate of Status (if you ordered them). If you file online, these documents will be emailed to you. If you file by mail, they’ll be returned to you by regular mail. If you file in person, they’ll be returned to you on the spot.
- Outline your operating agreement
If you are going in a sequence, now would be the right time to start worrying about your operating agreement. It should be noted though that an operating agreement is not compulsory in Florida, but it would be in your best interest if you have that document at hand.
Note that an operating agreement is a legal document outlining the ownership and operating procedures of an LLC. It is usually said that if the Articles of Organization is the document that forms your LLC, then the Operating Agreement is the document that governs it.
Note that you don’t need to file your Operating Agreement with the Florida Department of State (or with any other agency for that matter). It’s a document that you use in running your LLC, and you just need a copy for your LLC/business records.
If your LLC has more than one member (“multi-member LLC”), then you must ensure that each member gets a copy of the Operating Agreement. Your company operating agreement should contain,
- Names of the owners (also called members)
- How much of the LLC each member owns
- How the LLC is managed
- How the business is run
- The duties and responsibilities of the owners, managers, and officers
- How taxes are paid
- How profits and losses are distributed.
Operating Agreements are not limited in nature. If necessary, you can add any additional provisions/sections, as long as they are legal.
- Get your EIN
When you have completed the previously outlined steps, you are now faced with the most important step in your quest to form an LLC in Florida. That is getting your company EIN. The EIN which is the Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity.
It is essentially a social security number for your company. It is by this number your company would be identified henceforth for taxes and other things. Your EIN is so beneficial to your company as it is used to open a business bank account, for tax purposes and to be able to hire employees.
An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done either online or by mail. But a note of warning should be sounded here; you must ensure that you apply for your Federal Tax ID Number only after your Florida LLC is approved. If you don’t, and your LLC filing is rejected for some reason, you’ll have a Federal Tax ID Number connected to a non-existent LLC.
It is recommended that you apply for your EIN online because of the extremely fast approval time of 10 to 15 minutes. You’ll get a PDF printout with your Federal Tax ID Number at the end of the application. The online application is only available Monday through Friday, from 7am to 10pm Eastern.
But you must equally note that you can only use the online EIN application if you have an SSN or ITIN. Also, in order to use the online application, your LLC cannot be owned by another company. It must be owned by one (or more) people.
When applying for your Florida EIN by fax, you only need to complete and sign Form SS-4 and fax it to the IRS at 855-641-6935. No cover letter is needed. Your EIN will be approved in approximately 4-5 business days. When applying through mail, you need to complete and sign Form SS-4 and mail to the IRS at the address below. Your EIN will be approved in approximately 4-6 weeks.
- Internal Revenue Service
- Attn: EIN Operation
- Cincinnati, OH 45999