How to Form an LLC in Florida: The Affordable Way

Author: Mathew Abraham

Are you looking to kick-start your business in Florida by incorporating an LLC? Excellent choice! Florida is a great destination to incorporate your LLC given the income tax exemption to LLCs and liberal business regulations in the State. We will walk you through the process of incorporating an LLC in Florida step-by-step and break down the nitty-gritties of the procedure.

Naming Your Florida LLC

The name of your business is the first thing your customers will see. It also appears on all legal documents, contracts, and business accounts. So, having a unique and catchy name ensures you can differentiate yourself from competitors while attracting new customers. 

Naming Guidelines 

You must first pick an LLC designator attached to your business name. This designator is usually “LLC” or a form of its abbreviations.

It cannot also have an abbreviation that sounds similar to a government agency like the FBI, CIA, State department, etc. 

Your name must be distinguishable from the names of other companies incorporated in the State. You cannot claim distinguishability based on minor changes like a change in the singular, plural, and possessive forms of words.

You may need to submit additional paperwork or include licensed individuals in your LLC to use words such as ‘Bank,’ ‘Academy,’ ‘Attorney,’ etc., in your LLC’s name.

You can use the Division of Corporations’ website to do a name search to check for existing business names. Keep in mind that you cannot reserve a name in the State of Florida. 

Does your business require a DBA? 

Filing a doing business as (“DBA”) or fictitious name is helpful if you want to conduct the business under a different name. For example, your LLC’s name may be sufficient to represent your brand, and you can conduct any day-to-day operations under the same name. However, you may want to devise a new branding strategy, in which case, you should obtain a DBA. Once you obtain a DBA, it is valid for 5 years, post which you will need to renew it.

OBTAIN A DBA

File the application online

Apply online – OR –

File the application via mail

Download form

Mail to:
Department of Commerce and Consumer Affairs,
Business Registration Division,
P.O. Box 40,
Honolulu, Hawaii 96810.

Fax: (808) 586-2733

Fee: $50

Registering your business domain 

Even if you do not wish to create a domain name today, you must still acquire it before others. It will help in branding your business well in the future. You can check for available domain names here.

Nominate a Florida Registered Agent

Registered agents receive and send official documents on behalf of the LLC. They act as a liaison between the LLC and the State of Florida. A Registered agent ensures that your business can receive documents when you are away from home, out of the office, or not a Florida resident.

Who can be a Registered Agent?

Anyone, including yourself, your family, or friends, can be a registered agent, provided they: 

  • Are aged over 18 years, if they are an individual;
  • Have a street address in Florida;
  • Are available to receive communications during regular business hours.

Failure to have a registered agent can lead to various penalties such as administrative dissolution, i.e., inability to do business in the State.

Individual v. Registered Agent Service 

Using a registered agent service offers advantages over nominating yourself or one of your friends/family as the registered agent for your LLC.

It gives you flexibility since you would need to be available during office hours all the time to receive legal papers. It guarantees that the necessary legal compliance is taken care of since a commercial registered agent will be well-acquainted with the procedures and documentation required from your end. If you are a home-based business or are generally concerned about your privacy, having a commercial registered agent will ensure that your address is not present in the official records in the public domain.

You can do a simple online search to find a service that best suits your needs and finances.

Filing the Articles of Organization

Filing the Articles of Organization is one of the most critical steps while forming your LLC. It necessitates your business to provide information about how it will function. In addition, the articles spell out your company’s structure and give your LLC its legal recognition as a business entity. 

Details required for your Articles of Organization:

  • Name of your LLC
  • Registered agent’s name and address
  • Address for your principal office
  • Member or Manager managed 
  • Effective date
  • Signature of a member/authorized agent

You can even get a certified copy ($30 extra) or a certificate of status ($5) while forming your articles of organization. 

A certified copy acts as a legally legitimate and approved copy of your documents. The certification attests to the document’s accuracy and truthfulness. 

A certificate of status verifies that a business is lawfully established with the State, that all registration fees and mandatory document requirements are complied with, and that the LLC is legally authorized to conduct business in the State.

Post-approval by the Florida Department of State, you can expect to receive your copy of approval in the mode of your application. 

Methods of Filing

You can file your Articles of Organization online or mail it to the Florida Department of State. The approval process is quicker online and approval time is around 1-2 working days from the date of filing your application.

FILE THE CERTIFICATE OF FORMATION

Option 1: File the application online

Apply online – OR –

File the application via mail

Download form

Mail to:
New Filing Section
Division of Corporations
2415 N Monroe Street, Suite 810
Tallahassee, FL 32303

Fee:$125

Create the Operating Agreement

The operating agreement is the foundation upon which an LLC is built, the essential underpinning that dictates your company’s operations. It establishes efficient and customized procedures, safeguards your legal assets, and establishes your LLC’s legitimacy in the eyes of banks, courts, government agencies, and other stakeholders.

Since it is an internal document, you do not need to file it with the Florida Department of State. 

Who can draft this agreement?

You can create one yourself. If you are concerned about leaving out essential information, you can contact an attorney to prepare or review your draft. This can guarantee that the contract complies with all applicable laws and is not subject to the State’s default laws.

Default laws are the laws that will apply to your LLC in the absence of a similar clause in the operating agreement. 

What does the agreement include?

The LLC’s members’ names, percentage of ownership, management, operations, roles and obligations of the members, tax distribution, and how profits and losses are split. Please keep in mind that this is not an exhaustive list, and you can add any other clause (it cannot be illegal) that you believe is important.

Limits of Operating Agreement

There are some restrictions on the provisions you can include in your operating agreement. The Florida Statute dictates that your operating agreement cannot contain provisions that:

(i) remove duties of care between the members.

(ii) restricts the rights of a person who is neither a member nor a manager.

(iii) limits access to the LLC documents. 

Obtaining an EIN

The Employer Identification Number (“EIN”) is a nine-digit number used by the Internal Revenue Service (“IRS”) to identify a company for taxation purposes. If you want to employ people for your company, you will need an EIN. If you are a single member looking to incorporate your LLC, you don’t need to obtain a separate EIN unless you’re looking to employ people.

You’ll need your LLC’s EIN Number to create an LLC business checking account, in addition to being utilized by the IRS for tax purposes. When working with other firms and registering for various company licenses and permissions, you’ll need your LLC’s EIN Number.

Note: Only apply for a federal tax ID number once your Florida LLC has been granted. If you do not, and your LLC application is denied for whatever reason, you will end up with a Federal Tax ID Number tied to an inactive LLC.

How to apply?

You can apply for an EIN online between 7 am – 10 am EST on the official website, or send your application by fax or mail. To apply online, you need a Social Security Number (“SSN”) or Individual Taxpayer Identification Number (“ITIN”).

Obtain an EIN

File the application online

Apply online – OR –

File the application via mail

Download form

Mail to:
Internal Revenue Service Operation,
Attn: EIN Operation
Cincinatti, OH 45999

Fax: (855) 641-6935

Fee: Free

Annual Reports For Your LLC

An annual report is filed every year to update information regarding your business. 

This report aims to maintain your Florida company records fully updated. This helps creditors and other stakeholders search up your company address if they need to get in touch with you. The government also uses this information to trace the payment of your LLC state taxes.

To maintain your LLC’s “active status” and avoid unwanted penalties, all LLCs doing business in Florida have to file an Annual report .

You can only file this report online between 1st January and 1st May by paying a fee of $138.75.

Filing the report after the 1st of May can attract penalties. The late fees are $400. In addition, the Department of State for Florida will close down your company after the 4th Friday of September if you continue to neglect the Annual Report filing.

This annual report always follows the year after your LLC formation. So, for example, if you formed your LLC in 2021, your LLC will only be due in 2022. 

Tax Liability For Your LLC

There are three kinds of taxes generally:

Federal Taxes

 LLCs are nearly always categorized as “pass-through” businesses, which means they do not directly pay federal income taxes. The kind of tax you pay depends on the bracket you opt for: 

  1. LLC as a partnership: Form 1065
  2. LLC as a C corporation: Form 1120
  3. LLC as an S corporation: Form 1120
  4. LLC as a sole proprietorship: Form 1040

State Taxes

 A huge sigh of relief for you as Florida does not impose any personal income tax or franchise/privilege tax. However, depending on your LLC’s type of business and how it generates revenue, you may still be required to pay state and local corporate/business taxes.

Additional Taxes

Depending on the kind of business you run, you may need to apply for various taxes like the Unemployment tax or the Sales and Use tax. You can check for all the categories to apply for here at the Florida Revenue Department website

For more information, visit the official website containing the list of Taxes, fees, and refunds.

Having an accountant on hand to assist you with different tax compliances is usually beneficial.

Permits and Licenses

To legally function, you’ll need to get the required business licenses and/or permissions after forming your Florida LLC.

There is no statewide general business license in Florida. Therefore, your LLC’s requirement for business licenses and/or permits will be determined by its location and the type of its operation.

In addition to any state licenses or permissions, certain towns and counties need separate licenses/permits, such as building licenses, occupational permits, or health permits. To learn more, go to the website of your county or city or contact the local administration.

Business Bank Account & Phone Number

Double-check that you have a separate corporate and personal account after forming an LLC. Mixing your business and personal accounts is a bad practice since it endangers protecting your assets if your LLC is issued later. However, it also helps in the case of calculating and keeping track of taxes. 

Members who want to be approved signers on your Florida LLC bank account should be present when the account is opened.

You will receive a credit and debit card when you open a bank account. The credit card assists in the development of your LLC’s credit history. When it comes to raising funds for your LLC or qualifying for loans, this is quite useful.

To handle your bank account, you may always contact a business accountant.

Instead of using your home or mobile phone, you may get a low-cost “virtual business number” specifically for your Florida LLC. You can then forward calls to this company number to your smartphone. Utilize any service that may assist you with personalizing call forwarding, setting up pre-recorded instructions, and so on.

This unique phone number also protects your privacy from intrusive public record websites.

Final Thoughts

With the last step, you will complete all the procedures required to form an LLC in Florida. However, if you are hesitant about any procedure, you can always use a professional service that suits your needs. 

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