Forming an LLC in Florida
Written by: Ashly Guernaccini
To start with, a Limited Liability Company, also known as an LLC, is an American business structure provided for a company that offers personal liability protection, tax incentives, and detailed management for its owners. An LLC can be further described as a single-member LLC in which there is only one owner, or a multi-member LLC, where many owners, otherwise known as “members,” share management, profits, and liability protection.
Many business owners choose to take the next steps in their business management by protecting their personal assets and company by turning their sole proprietorship into an LLC. Unlike corporations, LLCs are relatively easy to form and maintain, and luckily, they are not subject to a double tax as a corporation. While it may seem overwhelming at first, there are a few basics to cover that can explain the brief steps of creating an LLC in Florida.
Does it matter what I name my LLC?
The short answer is kind of. To start an LLC in Florida, you will need to spend $125 to file the Articles of Organization with the Florida Division of Corporations, which can be done online, by mail, or in person. The Articles of Organization is the legal document that officially creates your Florida Limited Liability Company. In order to file your Articles, your LLC must have a name that complies with Florida laws, and isn’t already taken by another Florida entity.
LLC naming guidelines in Florida:
- One of the naming guidelines in Florida require that the phrase “limited liability company” or “LLC” is included in the name.
- Florida also restricts users form using names that can be confused with government agencies such as “FBI” or “State Department.
- Florida requests that words such as “Bank” or “University” require additional paperwork in order to start businesses such as law firms or medical practices.
Once you and your members come up with a name, the name must be searched through the Sunbiz Florida website in order to ensure that the name is not already taken by another company.
Of course, in today’s day and age it is rare for a business to not maintain a website, so it may benefit you to also check your company’s domain name to make sure it is available if and when you desire to purchase a URL and create a website for your LLC.
Choosing a Registered Agent in Florida
After naming your company, the next step is appointing a registered agent in Florida.
Your registered agent must have a street address in Florida (not a PO Box or mail service). A registered agent can be either an individual or business entity that will be responsible for receiving documents on your company’s behalf and inform you of the papers received. These documents may contain important tax forms, legal documents, notice of lawsuits, and government correspondence, and will ensure that although your company may have businesses in multiple states or if you leave the state, your registered agent will function as your company’s point of contact with the state.
A registered agent holds a crucial role in your company, and atCAUSE Law proudly offers this service to its clients. Contact our expert business attorneys today if you’re looking for a registered agent in Florida.
Florida LLC Requirements: How to Form an LLC
Besides coming up with a name and finding a registered agent, the next steps in forming your LLC in Florida require getting an Employer Identification Number, opening a bank account in Florida, ensuring that you have the proper licensing in place for your business, registering with the Florida Department of Revenue, and most likely creating an Operating Agreement.
Get an Employer Identification Number (EIN)
The Employer Identification Number is a nine-digit number issued by the Internal Revenue System. This number is then used to identify a business entity, such as an LLC, and it allows the state and federal government to keep track of the company’s tax reports and documents. You can think of an EIN as a business social security number that allows a company to open up a bank account, file taxes, and hire employees.
Create an Operating Agreement
Although an Operating Agreement is not a necessity for a Florida LLC, it is beneficial to create an agreement for your LLC in order to outline the ownership and operating procedures of the company. An Operating Agreement is a legal document that outlines management roles for the LLC among members and ensures that all business owners are on notice about their rights, duties, profits, and responsibilities.
For more information on why you should an operating agreement, read our article on the Top Five Reasons Why You Should Have a Florida LLC Operating Agreement.
Do LLCs pay taxes in Florida?
The only businesses that pay state income taxes in Florida are traditional corporations, or C corporations. LLCs, sole proprietorships and S corporations are exempt from paying state income tax. An LLC can be treated as a limited liability partnership, C corporation, S corporation, or a sole proprietorship, and each classification is subject to different tax structures, filing documents, and distribution of profits for members. In rare cases, an LLC is also incorporated. In Florida, this results in state income tax at either 5.5% or the 3.3% alternative minimum tax.
Can I add a member to my LLC later?
Yes. Your Operating Agreement will include the procedure that you decide on for adding members to your LLC.
Once you determine that you want to add another member, you must outline the specifics of the new arrangement including the new ownership structure, percentage interest in the LLC, and new or changed duties and rights among the members.
A new member’s ownership interest in the LLC should be discussed with existing LLC members as well as the new member before arriving to an agreement and adding the new member to the LLC and its Operating Agreement, which can be done through an amendment that lists the new member’s name, capital contribution, and percentage interest in the company.
Need Help Forming an LLC in Florida? Contact Our Business Attorneys today!
If you’re looking to form an LLC in Florida and still don’t know where to start, contact our experienced business attorneys in Clearwater, Florida. We’re happy to help with anything you need, whether it’s an initial consultation to get you on the right path or for us to completely handle the formation of your LLC.
Ashly Guernaccini is the founding attorney of atCAUSE Law Office. With over a decade of experience in business law, Ashly is certain that good lawyering does not involve a one-size-fits-all approach. She’s an advocate for businesses of every size, whether it’s a small local business or a large corporation.