How to Form an LLC in Florida
25 September, 2018
If you are starting up a new business in Florida? Then you must be thinking of forming an LLC in Florida? Well, the benefits of establishing an LLC in Florida are more than the forming any other business entity. It helps to provide the flexibility to the owners, managers or members, inexpensive to form, protect personal assets from debts/losses, to gain potential tax advantages and in maximizing the credibility.
As a matter of fact, every state has different requirements for forming a limited liability company. Whether you are operating your company or incorporating an existing business, you are required to follow all the formalities and annual requirements. The best part about forming an LLC is that there are no maximum numbers of the members in the business, you can appoint as many members according to the requirements of your company. In fact, LLC is also known as a "hybrid" business structure because it brings together elements of limited liability partnerships and corporation.
So, are you ready to form an LLC in Florida? Here are some steps which you need to follow while forming an LLC in Florida from filing the documents with the State Department to completing tax files and licenses requirements.
Step-1 Selecting a name for LLC in Florida
The first and foremost step in forming an LLC is to select its name. Do proper research and choose an appropriate name for your LLC. You need to check with the Division of Corporations and Department of State in order to determine whether another business has trademarked it or not?
If the name you want is already in use by another business entity, then you will need the consent of that business in order to use that name. Under Florida Law, an LLC name must contain the words "Limited Liability Company," or "Limited Company", or the abbreviations such as "L.L.C." or "L.C." In fact, the "Limited" word can be used as "Ltd." and "Company" may be abbreviated as "Co."
Step-2 Designate a Registered Agent
Before officially forming an LLC in Florida, you will need to find a registered agent for your LLC to act as the go-between the state and for your company. An agent can be an individual or business entity that is authorized to do business in Florida and agrees to accept all the legal paper on behalf of your Florida LLC.
As a matter of fact, the registered agent must have a physical street address in Florida because you'll have to provide the address and name of your registered agent on the Articles of Organization. The registered agent is responsible for receiving and forwarding along any process, demand, notice about the business entity.
Step-3 Draft your Article of Organisation
The third step is to draft the article of organization for your LLC because a Florida LLC is created at the moment when you file Articles of Organization with the Florida Division of Corporations. The items listed in your article of an organization must include-
- The full name of your LLC name
- The effective date of your business formation
- The office address of your LLC's principal office
- The street address, signature, and name of your registered agent.
- The street address, name, and signature of every authorized manager and member.
- Your name and email address for confirmation and additional communication (if applicable)
In an article of the organization, you can also choose to include a declaration regarding what your management structure will be whether it is manager-managed or member-managed and any other information that is relevant. Well, the business owners can submit the documents offline or online with all of the required field completed along with $125 filing fee.
Step-4 Prepare an Operating Agreement
If the Articles of Organization is the document that helps to form Florida LLC, then the Operating Agreement is the document that outlines the ownership and managing aspects of an LLC.
This document includes the name of the owners or members, how the business is running, how the taxes are paid, how the LLC is managed, the duties and responsibility of the managers, officers, owners, contributions and distributions, changes amongst the members, as well as, dissolution procedures. Well, the state department of Florida doesn't legally require LLCs to have an operating agreements for their business, so it's up to you to pull this document together on your own.
Completing Additional Requirements
Once you are done with the filing of article of an organization for your LLC in Florida, the next steps are to figure out precisely what is required for your Florida LLC in the way of licenses or permits, and taxes after forming an LLC.
Step-5 Obtain a Federal Employer Identification Number (EIN)
Once the state department approves your filing for LLC, the next step is to obtain an EIN from the Internal Revenue Service (IRS) either online or through the mail. The federal government uses a Federal Tax Identification Number or the Employer Identification in order to identify a business entity.
It is necessarily a social security number for every company who are willing to incorporate their business in Florida. Well, there is no filing fee for obtaining an EIN.
Being an identifying number for the LLC, it serves a few other purposes such as:
- Federal and State tax purposes
- The business account to pay payroll taxes for employees paid by the company.
- Opening a business bank account
Step-6 Open a Bank Account
Once the Florida state Department approves your Florida LLC and Federal Tax ID Number, the next step is to open a separate LLC bank account. Well, many entrepreneurs have made the mistake of operating their business out of a personal bank account.
Whether you are a setting up a single-member LLC or working with partners, it's essential to keep your business and personal finances entirely separate in order to steer away from the legal system problems.
Step-7 Apply For Business Permits and Licenses
The next step is to obtain the necessary business permits and licenses in Florida in order to operate LLC legally. Well, Florida does not have statewide general business permits or licenses. Depending on the type of the company you are running and the location in Florida, you may need to get permits and licenses to conduct your business entity.
Step-8 Register with Revenue Department
Well, Florida LLC's may need to register with the Florida Department of Revenue for withholding taxes, corporate taxes, and sales taxes depending on their way of running a business. If you are selling a physical product, you will typically need to register for Florida sales tax with the Florida Department of Revenue.
Step-9 Florida LLC Annual Report
Once you are registered with the Revenue Department of Florida, you are also required to submit an annual report to the state department every year. The annual report must include- the date of your company's organization, EIN, the name of your LLC address of your principal office, the name of owners or managers and any additional information of the state department may require.
The documents can be filed online through the mail, or in person. The fee for the filing of the annual report is $138.75, and you are supposed to submit your first yearly report between January 1 and May 1 of the year following the calendar year in which your LLC was formed.
But after 1st May, you need to pay a hefty penalty of $400 along with the annual report filing fee. The reminder notice for a yearly report will be sent to the LLC's email address which you will provide while submitting this document for filing by the state department.
By now you must be having a profound idea for forming an LLC in Florida. Forming an LLC in Florida is not a difficult task, all it requires is your personal efforts. But it is essential to follow all the state's rules and requirements of Florida to operate your business legally.
So, once these steps are completed, you can save much time and have a quick start towards the running and success of your business.
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