Have a great business idea and feel ready to put it into action? Here’s a quick guide on how to form an LLC in Florida. Registering with the state gives legal rights and protections to your business. A Florida LLC (Limited Liability Company) also provides personal asset protection for its owners (members).
An LLC can be set up to run your business or to hold your assets. These assets include real estate, boats, vehicles, etc.
The fee for a Florida LLC filing is $125. That’s quite reasonable, but there are additional things and points to consider before you submit the application. Let’s take a look at some major steps.
1. Your Florida LLC Needs A Unique Name
When you start an LLC, you’ll need to think of a name that’s unique and distinguishable. If you intend to start a business, a unique, attractive name does wonders for marketing as well.
Florida requires that the name you choose must be distinguishable from other businesses in the state’s database. So names that are very similar to existing businesses won’t be accepted.
A Florida LLC may have a name that isn’t immediately distinguishable from an existing registered entity. However, this requires written consent from the existing entity.
It is a good idea to come up with a few names that you’d like to use. You can search for names on Florida’s Sunbiz LLC and entity database to make sure the desired name is available. While you’re at it, also search through the USPTO website to make sure that the name doesn’t infringe on existing Trademarks.
Naming Conventions To Register Your LLC In Florida
As with other states, Florida restricts the use of some words/phrases in the name of the LLC. These are words that might be considered as possibly misleading the public. Words that might otherwise misrepresent the LLC or its functions are also blocked.
This means your LLC can’t have a name similar to a government agency or department. Words and terms like FBI, Treasury, CIA are forbidden. Restricted words that misrepresent the LLC include terms like bank, Inc, Incorporated, etc. The Florida Legislature website has more details on the naming conventions.
The name of an LLC must end with a proper designator. This makes sure that an LLC is always represented as such and the possibility of misrepresentation is minimal. Acceptable designators for your Florida LLC are:
- Limited Liability Company
Using A Fictitious Business Name (DBA) – Optional
After your LLC is registered, you can choose to use a fictitious name for your company. This is also called a fictitious name, trade name, or assumed name.
Simply put, your LLC would be DBA (Doing Business As) the fictitious name. Using a fictitious name is optional, though it can come in handy for some situations.
Applying for a fictitious name involves submitting form CR4E001. The form has a $50 filing fee and can be submitted via mail or online through the Sunbiz website. A registered fictitious name can be legally used for five years.
2. Your Florida Registered Agent
When you create an LLC in Florida, you must provide the name and address of a registered agent. Information on the registered agent is filed with the Florida Division of Corporations.
A registered agent is required for the ‘service of process’. This means the registered agent will be the one to receive communication relevant to your Florida LLC. This includes, but is not limited to, legal documents, correspondence, subpoenas, summons, and complaints. In a way, the registered agent is a ‘middleman’ who receives these documents and forwards them to you.
Having a registered agent for your Florida LLC is mandatory. If the registered agent is unreachable, you risk several penalties. For some time, these are monetary, but will eventually lead to the dissolution of the LLC.
Registered agents are required to have a physical street address in Florida. This address can’t be a PO Box. The following are qualified to act as registered agents (provided a street address is available):
- You can be a registered agent of your LLC.
- Your family and/or friends can be the registered agents.
- Any adult over 18 years of age and living in Florida.
- Any entity (an LLC can’t be its own registered agent).
- Commercial registered agents.
Many people choose to go with commercial registered agents simply because of their experience with the position. Plus, since their entire job is being registered agents, it’s fair to expect a degree of professionalism.
The information of a registered agent is a matter of public record. Some people choose commercial registered agents simply for the sake of privacy. You could, for example, avoid having your phone number, address, etc. visible freely by hiring a commercial registered agent.
3. File Articles Of Organization For Your Florida LLC
Filing the Articles of Organization is the most important step in forming an LLC in Florida. Technically, the moment the state approves these documents is the moment your LLC comes into existence.
The fee for filing the Articles of Organization is $125 and it must be deposited with the application. The most common ways to submit these are:
- Online, through the Florida Sunbiz website
- Via Mail
- Walk-in (submit in person)
Filing Articles of Organization should be accompanied by a cover letter. This cover letter must contain the following information related to you:
- Telephone number (reachable during the day)
How Much Does It Cost To Set Up An LLC In Florida?
As you file these documents, it’s good to know how much does it cost to set up an LLC in Florida.
Filing the Articles of Organization for your Florida LLC will cost you $125. Once you submit the application, a letter of acknowledgment is provided free of charge.
There are a couple of optional extras as well. A Certified Copy has an added fee of $30. You can also get a Certificate of Status for $5.
It is possible to pay for the filing fees with a check made payable to the Florida Department of State. In case you’re also requesting optional extras (like a certified copy), the relevant amount can simply be added to the check.
Paying with the online filing of your Florida LLC allows more flexibility in payments. You can choose to pay using these options:
- Credit cards (Mastercard, Visa, American Express, and Discover).
- Debit cards with Visa or Mastercard logo
- A prepaid account with Sunbiz e-file
How Long Does It Take To Form An LLC In Florida?
The speed of the approval of your LLC is dependent on the mode used to file it. Let’s see how long does it take to form an LLC in Florida, as related to the filing methods.
- Walk-in: This is the fastest method. Your LLC might be approved and good to go within 30 minutes. Now that’s fast!
- Mail: Approval of the Articles of Organization sent via mail can take up to 5-7 business days.
- Online: If you filed for your Florida LLC online, the approval can take 1-2 days.
Some Notes For Filing Your Florida LLC
You can submit the Articles of Organization online through the Florida Sunbiz website. However, if you choose to do so by mail or by walking in, you’ll need to use Form CR2E047. When submitting via mail or walk-in, include a cover letter that has your name, address, and phone number.
The address for mailing the Articles of Organization is:
New Filing Section
Division of Corporations
PO Box 6327
Tallahassee, FL 32314
Should you choose to walk-in or use a courier, the street address is:
New Filing Section
Division of Corporations
The Centre of Tallahassee
2415 N Monroe Street, Suite 810
Tallahassee, FL 32303
Key Requirements For Your Florida LLC Articles Of Organization
Your filing for a Florida LLC the following information is necessary, though some other points might be needed as well.
- Name of the LLC with the chosen designator.
- Name and address of the registered agent.
- Signature of registered agent.
- Principal office address of the LLC.
- Name and address of each member and/or manager
- Name and signature of the LLC’s organizer
- Additional provisions, if applicable
4. Your Florida LLC Operating Agreement
The Operating Agreement is a document that defines the functions and governance of the LLC. You don’t need to file this document with the Florida Division of Corporations, or for that matter, any government agency. The Operating Agreement is an internal document that stays with your LLC and its members.
In the basic sense, the Operating Agreement defines the roles of the members, the distribution of profit and loss, approach to taxation, and similar points. While it isn’t filed with any government agency, this agreement can form a part of handling the assets of the LLC. This comes in handy for liability protection afforded to the LLC.
An operating agreement also serves as an excellent tool for managing disputes and laying out responsibilities for members/managers.
If you have a multi-member LLC, each member should have the operating agreement. While a single-member LLC may not have express need of the agreement, it’s still good practice to keep one.
5. The Federal Tax ID (EIN) For Your Florida LLC
Once your Florida LLC has been approved, you should file for a federal tax ID with the IRS. The 9-digit EIN (Employer Identification Number) is also known as Federal Tax Identification Number (FTIN) and Federal Employer Identification Number (FEIN).
Getting the EIN is free and fairly simple. You can simply submit an online application with the IRS.
However, there are instances where the online application can’t work. This happens when the applicant doesn’t have an SSN or is not a citizen of the United States. Online applications are not possible if the owner of the LLC is another LLC or similar entity.
In such situations, you’ll have to use Form SS-4. Once filled, you can submit this form to the IRS via mail or fax.
Having an EIN is necessary for the proper functioning of your LLC. You’ll need it not just for taxation, but also for accessing essential services like banking. Additionally, hiring employees and withholding taxes too needs EIN.
6. The Mandatory Florida LLC Annual Report
All Florida LLCs must file an annual report. The fee for filing this report is $138.75 and must be paid irrespective of the activity, profits, or revenues of the LLC. The only exception here is for the first year of the LLC, which will file its annual report the following year. For example, an LLC formed in 2020 will form its first annual report in 2021.
Florida requires that the report be filed before May 1 every year. Following to do so attracts a penalty of $400. This means the cost of filing the annual report with a delay goes up to $538.75. In case of failure to file the report, Florida will shut down the LLC on the fourth Friday of September.
Until quite recently, filing the Annual Report online only showed a success message on the screen. A copy of the annual report can be downloaded after the report has been processed and posted.
Now, the website also sends an email alert once the Annual Report for your Florida LLC has been filed. Reports are processed and posted almost immediately if the payment is made with electronic methods like credit cards. In case you use payment methods like check and money order, the report will be processed in the order it was received.
7. Local And State Licenses
Florida doesn’t have a statewide general business license. Depending on your business and the company, you might need additional business licenses and/or permits. Apart from the state, it may also be necessary to acquire licenses and permits from the county, town, or city where you intend to do business.
8. Local, State, And Federal Taxes
Can’t ever forget your taxes! Local taxes depend on the specific county or city of your operation.
On the state level, Florida doesn’t have a personal income tax. However, you may need to consider taxation aspects like sales tax, corporate tax, and other taxes collected by the state. In these cases, your business may need to register with the Florida Department of Revenue.
Federal taxes similarly depend on the structuring and use of your LLC. Nevertheless, by default, the IRS sees LLCs as pass-through taxation. The profits and losses of the LLC will be reported as a schedule on your personal returns.