Starting an LLC in Florida: Step-by-Step Guide – NerdWallet

many people think of Florida primarily as a state to vacation and enjoy leisure time in, but it ’ s besides a lead choice for entrepreneurs. Florida is home to 2.5 million small businesses, many of them in the tourism, farming and skill sectors. When starting a business in the Sunshine State, one of the first gear things you ’ ll need to decide on is a business entity type. You may want to consider starting an LLC in Florida. The restrict liability company, or LLC, has been the most democratic business structure in Florida for several years in a quarrel. LLCs are easy to start and maintain, come with tax flexibility and offer legal auspices for their owners. If you want to take advantage of everything an LLC has to offer, keep reading. We ’ ll break down everything you need to know to learn how to form an LLC in Florida.

How to start an LLC in Florida

In order to start a business in Florida, you ’ ll need to go through the Florida Department of State ’ s Division of Corporations. The Division of Corporations sets the rules, requirements and costs to form an LLC in Florida. You ’ ll besides need to follow their rules if you want to operate your out-of-state LLC in Florida.

Choose a name for your Florida LLC

The first pace in how to form an LLC in Florida is to choose a name for your occupation. Like other states, Florida law requires you to choose a list for your LLC that ’ s different from the names of other businesses that are on file with the Division of Corporations. This prerequisite is designed to prevent confusion among customers and members of the public. The appoint of your occupation must end with “ Limited Liability Company, ” “ LLC ” or “ L.L.C. ” Licensed professionals in Florida can opt to form a professional limited liability party, or PLLC, whose mention should end with “ Professional Limited Liability Company, ” “ chartered, ” “ PLLC ” or “ P.L.L.C. ” You can ’ triiodothyronine use certain words in your LLC ’ s list, such as those referencing banks, fiscal institutions or agencies of the federal politics .

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Before establishing your business, it ’ south authoritative to check if your business mention is available. You can do a preliminary diagnose search on the Division of Corporations ’ business name register. Unlike the huge majority of states, Florida does not allow you to reserve a commercial enterprise name. This means you should submit your articles of organization vitamin a soon as possible after you do a preliminary search. Otherwise, another company might claim your clientele name. Keep in mind that the Division of Corporations doesn ’ triiodothyronine clear names for hallmark conformity. If you ’ re creating an LLC in Florida, it ’ s up to you or your business lawyer to ensure that your LLC ’ mho name doesn ’ metric ton conflict on any other company ’ mho rights.

Choose a registered agent in Florida

Any business that operates in Florida must name a register agentive role that will accept legal and official mail on the business ’ s behalf. A registered agent for a Florida LLC can be an person or a company. They will notify you if your business is sued or receives a government notice. When forming an LLC in Florida, an individual registered agent must be a Florida resident. A company that serves as the registered agent must be a business entity authorized to operate in Florida. The register agentive role must have a physical address in Florida ( P.O. boxes are not sufficient ). Your business can ’ triiodothyronine serve as its own registered agent, but a extremity or director of the LLC can. many businesses find it commodious to use an on-line legal service, such as IncFile, to serve as their registered agent.

Obtain a Florida business license

Businesses in respective industries need a occupation license to operate in Florida. The Department of Business and Professional Regulation licenses entrepreneurs in skilled trades, such as architecture and real estate of the realm. The Department of Agriculture and Consumer Services regulates some farm and consumer industries. Smaller agencies regulate the health fields, indemnity agencies, group homes and daycare providers. The Florida Department of State web site links to licensing authorities by occupation, so you can read up on what licenses you might need when forming your LLC in Florida. Companies that use a trade name other than the entity ’ s legal identify must file for a fabricated occupation name, besides known as a DBA or “ doing business as ” name. For case, say your business ’ second legal list is Joan and Day, LLC, but you operate as “ Joan ’ s Landscaping. ” You would need to register the latter appoint as a assumed occupation name with the Division of Corporations. You ’ ll besides need to advertise the fabricated mention in a county newspaper where your principal place of business is located. Remember that your fabricated name can ’ t already be in use by another clientele. Search Florida ’ s business name database to ensure your name is available. Any business in Florida that sells taxable goods or services must besides register with the Florida Department of Revenue. You must sporadically forward the collected tax to the state of matter and file sales tax returns. The filing deadlines for these returns vary based on the amount of sales tax your commercial enterprise collects annually.

File your articles of organization

The following gradation in forming an LLC in Florida — and the most important one — is to file your articles of arrangement with the Division of Corporations. Your articles of organization officially establish your authority to operate as an LLC in Florida. You can access a fillable PDF of the articles of organization, or you can e-file for fast process. The filing fee for the articles of constitution is $ 125. The Florida LLC articles of organization require the follow data :

  • The LLC ’ s diagnose and principal position of business .
  • Registered agent ’ s appoint and Florida street address ( P.O. Boxes are not acceptable ) .
  • Registered agent ’ randomness key signature .
  • Names and addresses of the LLC ’ s members .
  • name and cover of the LLC ’ sulfur coach if manager-managed .
  • effective date of the LLC, if not the date of charge ( optional ) .
  • signature of the member or authorized individual completing the phase .

Foreign LLCs — which are LLCs that are formed in another state but want to operate in Florida — must fill out a unlike form called Qualification of Foreign LLC. This form besides has a $ 125 filing tip, and you should include a certificate of thoroughly standing from your home state along with the form. The state of Florida normally takes about one week to process articles that are filed on-line and a copulate of weeks to process articles that are mailed in. After the state approves your charge, you can download a replicate of your accept articles online and store them with your other business records. If the express rejects your articles for some argue, you ’ ll be given the opportunity to make corrections.

Draft an LLC operating agreement

According to state law, Florida LLCs do not need to have an operate agreement. however, we recommend that the members of your LLC adopt a written engage agreement. The operate agreement facilitates your LLC ’ s daily operations and prevents disagreements among members. At a minimum, ensure that your Florida LLC operating agreement includes the adopt information :

  • The purpose of the LLC, including products or services offered .
  • The names and addresses of the members ( and the director, if there is one ) .
  • Each member ’ s contributions of respect to the LLC.
  • Each penis ’ s ownership bet on in the company, voting rights and profit partake .
  • The routine for admitting fresh members .
  • The procedure for electing a director if the LLC is manager-managed .
  • The LLC ’ s meet schedule and vote procedures .
  • dissolution terms and procedures .

Creating this document can be confusing for new clientele owners, but on-line legal services or your occupation lawyer can help with this process, a well. After creating your LLC manoeuver agreement, make sure all members have an opportunity to review and sign it. then, store the agreement with other important business documents.

Choose how you want to be taxed

As an LLC, you have the choice to be taxed as a pass-through entity or a corporation. As a pass-through entity, your business will not be responsible for filing separate tax forms. alternatively, each member of the LLC will report business earnings and losses on their personal tax returns. If you opt to be taxed as a pot, your LLC will be responsible for federal bodied taxes ( Florida has no state of matter income tax ) and will need to file separate occupation taxes. At the federal grade, LLC members must pay 15.3 % in self-employment taxes to cover social security and Medicare obligations. If you have employees, you must withhold union social security and Medicare taxes from your employees and pay the employer ‘s contribution of these taxes. There ’ randomness besides a federal unemployment tax that you ’ ll need to pay in addition to Florida submit unemployment taxes.

Obtain an EIN

Florida LLCs with employees or multiple owners, adenine well as those taxed as corporations, must apply for an employer identification number. The IRS will ask for your EIN when you file federal business taxes. additionally, your LLC will besides need an EIN when opening a citation card or clientele bank score in Florida, american samoa well as if you apply for business loans in Florida — or anywhere else.

Comply with Florida employer obligations

In addition to the steps listed thus far, Florida LLCs with employees have some extra obligations, including :

  • employee report : Under state and federal law, employers should report new employees within 20 days of their hire date to the Florida Department of Revenue .
  • Paying unemployment taxes : New Florida employers must pay a payroll tax of 2.7 % to cover department of state unemployment indemnity, which applies to the first gear $ 7,000 in wages. Established employers will pay a lower or higher rate depending on the number of benefits their employees claim, plus their total payroll .
  • Purchasing workers ‘ compensation indemnity : In most industries in Florida, employers must purchase workers ‘ recompense coverage upon hiring their fourth employee. LLC members count as employees for these purposes .

A business lawyer who specializes in Florida employment law can alert you to any extra requirements and help you stay in submission.

File your annual report

As we mentioned briefly above, Florida is one of a small handful of states that doesn ’ t charge a state income tax. This means that owners of a Florida LLC don ’ t have to pay any state of matter income taxes on their contribution of the business ’ second profits. This can be a big advantage for those forming an LLC in Florida. The state of Florida does require LLCs to e-file an annual report. The function of the annual reputation is to update the business information on file with the Division of Corporations. The report is ascribable between January 1 and May 1 of each year to avoid late fees. If not filed by the third Friday in September, your LLC could lose the authority to operate in Florida. The reputation should be accompanied by a file fee, which is presently $ 138.75.

Pros

  • Members of an LLC aren ’ metric ton personally liable for business debts and lawsuits .
  • LLCs have fewer recordkeeping requirements than corporations .
  • Florida doesn ’ t have a state income tax, so members can potentially save a bunch of money .
  • At the federal level, LLC members can choose their clientele ’ s tax treatment. Under default tax discussion, LLCs avoid the double tax of C corporations .

Cons

  • LLC members must pay high self-employment taxes at the federal tied .
  • Florida doesn ’ thymine allow name reservations for business entities .

When evaluating the pros and cons of forming an LLC in Florida, keep early types of occupation entities in beware as well. It ’ randomness easiest and least expensive to form a sole proprietorship or partnership, though they offer little liability protection. If you ’ re plan to fundraise from investors, consider a C corporation or S corporation, which gives you the ability to issue store .

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