Let’s start with a fundamental question before we plunge into the business world and see if it’s a viable framework. What is a limited liability company (LLC)? It’s a corporate structure with a versatile system, benefits from tax efficiencies, and offers limited liability to its owners. Individuals, foreign entities, companies, and other LLCs will all be members, and there is no limit to the number of members. It’s also known as a hybrid corporate arrangement because it incorporates limited liability companies and corporations. Now that you’ve decided on Florida as your business place, there are a few items you’ll need to do before registering your LLC. A Florida LLC is a legal business structure that protects its members’ assets. A Florida LLC blends the advantages of a company with those of a sole proprietorship or partnership. They are also much easier to manage because they have fewer formalities and annual specifications. In Florida, limited liability companies (LLCs) handle businesses and properties such as cars, real estate, vessels, and airplanes. There are numerous benefits of forming an LLC. The first one is that it requires less paperwork, and the cost of filing these papers is also less. You can even create an LLC with one member, and also, you can have an unlimited number of members. One thing that might worry the owners is the hassle of taxes, but it is not the case here as the taxation is pretty simple.
Without further ado, let us look at the procedures for forming an LLC in Florida.
Step 1: Give your LLC a Name
We’ve all heard the expression “what’s in a name?” Well, the title contains a lot of details, particularly in the business world. The label represents the organization. It appears on your business card, logo, website, and other materials, so choose your LLC name carefully. You may be inventive, but there are specific guidelines to follow. The LLC’s name in Florida should have words or their abbreviations Limited Liability Company or LLC, respectively. It must be differentiated from the other registered LLC names. If you discover that the name you want is already registered, you can change it without absolutely discarding it. You cannot distinguish the name by merely doing some corrections such as using abbreviations for corporate organizations, the plural and singular form of the words, adding the articles such as an, a or the, using symbols and punctuation more. It would help if you made some substantial changes such that your name becomes distinguishable, but it conveys the same meaning.
Once you’ve chosen your name, you’ll need to see if it’s available. Consequently, it’s important to double-check the name’s availability before using it on any of your documents. You should review with the State’s business search to check if another organization with the same name exists. After following the steps, you should have a name for your company and be ready to go. What if you’re concerned that someone else would use the fantastic and imaginative name you’ve composed?
Sadly, Florida lacks providence for name reservations; however, once the company’s name gets registered on your Articles of Organization, no one will be able to access it. So just read the article straight to the end to get your LLC up and running as soon as possible.
Step 2: Select a Florida Registered Agent
You must have a licensed agent listed in the Corporations Division of Corporations if you choose to do business legally in Florida. The Service of Process is served on your company’s behalf by LLC agents. This process serves notices, subpoenas, litigation, grievances, and other legal documents; if you do not have a registered agent, your LLC is subject to specific penalties. Worse, if you fail to meet this requirement, the State can dissolve and close your LLC. Your company’s Registered Agent can be an individual or a company, and it must have a physical street address in Florida where the correspondence can be provided. If the LLC’s Registered Agent is an individual, that person must be 18 years old. The agent must be a Florida native. However, you can hire a Commercial Registered Agent if you don’t have an address in the State or don’t want your address on the public records. Registered Agents serve as a mediator for LLCs and other legal entities. They collect all of the LLC’s regular mail addresses and pass them on to the owner.
As a consequence, you’ll need to recruit an agent. It is mandated by Florida’s revised law, which states that an LLC, business, or international limited liability company which is licensed and has an authorization certificate to start the business must have the following:
• You’ll need a licensed agent.
• and a registered and authorized office
Who is qualified to act as a registered agent? There are two choices available to you:
A single person
Yes, the person does not require advanced training or expertise. There are some conditions for a person to be your registered agent; they should be a Florida citizen and be at least of the age 18 years and have a Florida street address.
You may also hire third-party consultants, lawyers, and other professionals. However, friends and family members may also serve as agents.
Registered agent assistance
You may also employ Registered Agent services or others if you don’t want to deal with the hassle; these companies will do the work for you and have registered agent service for free. You may also outsource the agent duties to a national registered agent service. There may be a situation where you may require to replace your agent for several reasons, such as your current agent’s resignation or your willingness to use an expert service. Working with an agent’s absence will lead to official dissolution, so you must enforce the changes quickly.
Step 3: Send the Articles of Organization to the State of Florida
The formation of the LLC process is now catching its pace. It’s time to draft an essential document for your LLC: the Articles of Organization. The Articles of Organization provides a record with the State department for your LLC, allowing it to begin doing business in Florida. It’s time for your LLC to launch after you’ve completed the previous steps. You can register the Articles of Organization in three ways: online, mail, or hand-delivered. It doesn’t matter which choice you go for; the filing fee is $125. You can choose from any of the options because they are all valid. The LLC’s article of the organization must include the following information:
• the LLC’s office’s mail and street addresses
• the LLC’s members’ names and addresses
• the registered agent’s address, signature, and name
• the LLC’s first day of operation
• a member’s or an approved representative’s signature
Filing Forms Online
For the online application, you have to go to the Department of State’s e-filing site. After that, you have to fill out the form and pay the fee.
Filing the Paper from
You must first download and print the application. You also have an additional letter with your name, residence, and phone number included with the mailed edition. You must also have payment in the form of a money order or a cheque made payable to the Department of State. You can give it to New Filing Section, Division of Corporations, PO Box 6327, Tallahassee, FL 32314
Delivered by hand
You can also submit your document in person along with the payment if you live nearby. The Department of State handles the paper and online filings when presented, so the time for the application to get processed differs, counting on the backlog records’ size. However, you do not have to wait for your forms to be completed; you can review the processing timetable to check when your document will be processed.
Step 4: Operating Agreement for a Florida LLC
The Articles of Organization, which form your LLC, were generated in the previous phase. The Operating Agreement, which governs the LLC, will be created in this phase. Unlike the Articles of Organization, you do not need to register your Operating Agreement with the Florida Department of State or any other entity. It’s an internal company document that you can keep with your LLC/business documents. Although creating an operating agreement is not necessary for Florida, it is the essential document for your company’s success and stability. It makes custom processes, establishes your LLC’s legitimacy in the eyes of government agencies, banks, and courts, safeguards your legal properties, and more. If your LLC has more than one member, make sure that each one has a copy of the agreement.
What is the content of an Operating Agreement?
The members’ names; how the LLC is handled; how much each member owns; the owner’s obligations and duties; how the company is operated; how taxes are charged; and how gains and losses are allocated are present. You may add or delete any information as long as they are legal, so it is not restricted. As you can see, all these provisions are required for the company’s successful run, so do form an operating agreement.
What is the Operating Agreement’s significance?
This document includes a formal agreement on managing conflicts and disputes among the participants, so we can’t tell how relevant it is any longer. The Bylaws are the rules that govern how the organization is run. It is as critical as retaining the members’ liability insurance, which helps when you find yourself in court. It’s always a good idea to have an Operating Agreement with your LLC, whether it’s a single-member or multi-member LLC.
Step 5: Secure an Employer Identification Number (EIN)
You must obtain an EIN (Employer Identification Number) if your company has more than one member; even if you have no workers, this number is required. If you create a one-member LLC, you must obtain an EIN for it to be able to hire workers in the future or to be taxed as a company rather than a sole proprietorship. You must complete a free online application on the IRS website.
What is an EIN?
The IRS uses this nine-digit number to classify your LLC’s tax accounts. It is essential to have EIN if you pay your taxes.
An EIN can be obtained in the following ways:
You can file from Monday to Friday from 7 in the morning to 10 in the night if you need tasks completed quickly. You will instantly obtain your number after completing the form.
If you use the fax method, you will receive the number within four working days. For that, you have to Form SS-4, and after completing it, send it to (855) 641-6935 if you prefer a paper form. You will obtain your Employer identification number within four working days.
via postal mail
You may still use the postal service. However, it will take four weeks to process your documents, so it is the most delayed method. Complete Form SS-4 and mail it to Internal Revenue Service Operation, Attn: EIN Operation.
Cincinnati, OH 45999, if you have a lot of patience.
Most of the specifics are now taken care of; the significant steps required to begin your LLC formation are completed. So, you’ve come this far; don’t give up now. There are just a few points left to win. You’re nearly at the end!
Step 6: Submit the Annual Reports of your LLC
All the LLCs in Florida must file an annual report if they want to keep their company active. The first report is expected within a year of the LLC’s establishment. The annual report must be filed electronically between January 1st and May 1st, and the fee is $138.75. A $400 late charge is added to the annual report filing fee if you meet the deadline. When you send this form for filing, you will receive yearly report reminder notices at the email address you gave. So, file the annual report on time to prevent being shut down or administratively disbanded.
Bear in mind that your LLC’s first Annual Report isn’t due until the following year after its establishment. If you created your LLC in 2020, for example, you wouldn’t have to pay your annual report until sometime between January 1st and May 1st of 2021. The annual report to the Department of State may only be filed online. You will receive a progress message rather than a copy of the form after successfully filing the annual report. If you need a copy of your file, go to the website, search for your LLC name, click on it, go to the document images section, and download your copy of the form.
Step 7: Obtaining Business Permits and Licenses
You’ve completed all of the steps to form your LLC. But hold on! You must adhere to a critical aspect: obtaining the requisite business licenses or permits to operate legally. Since Florida does not have a statewide business license, the receipt of permits is dependent on the location and nature of the business. You must obtain all relevant information and contact the county officials in the area where your business is located. The Department of Business and Professional Regulation will help you get the required business permits and licenses for your LLC.
Obtaining a license
Step 3 has already made your company legal. We have been told that the Articles of Organization legitimizes your business, but some formalities are still left. However, before starting a company, you need to acquire a license. The type of license you need is decided by the kind of company you operate. For example, if you want to open a coffee shop, you have to obtain a business license from the State and the food and services license, and more before opening your shop. As a result, it is always a good idea to go to the Department of Business and Technical Regulation’s official website.
Step 8: State Taxes in Florida
The LLC must pay a few taxes to the State, and you should always pay the taxes because avoiding them is illegal. Let’s take a look at the taxes that are needed in Florida:
- State Income Taxes
By law, Florida LLCs are taxed as Sole Proprietorships or Partnerships. Since the LLC is taxed as a “pass-through” entity, the Florida LLC would not double taxation as a corporation would. The gains and expenses of your LLC will be posted on a schedule on your tax return.
- Sales tax, corporate tax, and withholding tax
To file these taxes, you must first register with the Florida Department of Revenue. Your particular business situation decides the form of tax you must pay. As a consequence, always double-check data with an accountant before continuing.
- There is no personal income tax.
It’s good news because Florida doesn’t have a personal state income tax. Bear in mind that your LLC might also be expected to pay some local and State corporate or business taxes depending on your company and how it earns revenue.
- Taxes on businesses
Your LLC may be expected to pay a range of business taxes in Florida, including sales and use tax, reemployment tax, communications services tax, discretionary sales surtax, corporate income tax, and more.
Before we sign off, there are a few more things we’d like to share. Don’t worry; your limited liability company is ready to go. There are a few moves that will assist you in your business endeavors.
Step 9: Open a bank account for your Florida LLC
The Department authorizes your Florida LLC of State, and it has all of the required licenses and a Federal Tax ID Number. The next logical move at this stage is to open a new LLC bank account.
The benefits of having a separate LLC bank account
Accounting and tracking are made more accessible if you have a different bank account for your company. It also ensures that your personal and company assets are kept separate and that only your LLC assets can be used to settle any litigation or debts.
To open an account, you’ll need the following items
The stamped and accepted copy of your Florida LLC’s Articles of Incorporation, such as a passport or driver’s license, two valid IDs, and your Federal Tax ID Number, are the first documents you’ll need to open an account. However, some banks can need extra paperwork, so it’s always a good idea to call ahead and get the specifics. Members of your LLC who want to be approved signers should be present when the account is opened. If you are not a US resident, the steps are slightly different, so check the official website for more information.
Several banks in Florida charge monthly fees, but 25% of them do not, so you can speak to 5-6 banks before deciding on which one to open your account with. You will either obtain a debit card right away or have one sent to you within a few days of opening your account. If you want to get rewards for your company, such as travel points and cashback, it’s best to apply for a business card.
Step 10: Provide a phone number for your company
Instead of using your home phone number or mobile phone, you can get a low-cost virtual business number for your Florida LLC. You may also customize this virtual business phone to forward to your mobile phone, as well as listen to the voice prompts. Using a different business phone number for your Florida LLC is a brilliant idea because it keeps your valid phone number away from public record websites.
Congratulations on your achievement! You’ve gotten this far. You’re now set to launch your LLC and ascend to new heights. Follow all of the measures outlined above, and you’ll be the proud owner of your company in no time! It’s time to move forward with this project.