A limited liability company (LLC) is a way to legally structure a business that combines the limited liability of a corporation with the flexibility as well as the lack of formalities of a partnership or sole proprietorship.
Forming an limited liability company is a great option for any business owner who seeks to limit their personal liability for business debts and lawsuits.
So, if you’re living in Florida and planning to form an limited liability company, then you’ve come to the right place. In today’s guide on how to start an limited liability company in Florida (FL), we will go through what is an LLC and the steps to forming a Florida limited liability company.
What is an LLC?
Before deciding to start an limited liability company in Florida, you must first understand what an limited liability company is to better figure out if this is a viable business structure for your company. It is a business structure that has a flexible organization, is privy to tax efficiencies, and provides limited liability for its members.
The term members here may include individuals, corporations, other LLCs, and even foreign entities. One major benefit of an limited liability company is that there is no maximum number of members.
Essentially, a Florida limited liability company is also known as a “hybrid” business structure in the sense that it combines the elements of a corporation and a limited liability partnership.
Florida limited liability company is used to run businesses and they’re also used to hold assets such as real estate, boats, aircraft, and other vehicles.
How to open an LLC in Florida (FL)
Forming a Limited Liability Company (LLC) in Florida
To form a limited liability company, you can either follow the 4 detailed lessons below with step-by-step instructions or opt for the Quick Start Guide that we’ve prepared further below, which gives an overview of all the steps. We highly recommend following the more detailed lessons if this is your first time setting up an limited liability company in Florida.
Now, to start one in Florida, you will first need to fill the Articles of Organization with the Florida Division of Corporations. This will cost $125 and can be done easily online at the MyFlorida Sunbiz website or by mail or in person, payable to the Division of Corporations. The Articles of Organization is a legal document that officially creates your company.
We hope that after you finish reading all the steps below, you can understand how to start a Florida limited liability company at ease.
Step 1. Florida LLC Name
Now, before filing the necessary paperwork to form your LLC with the Department of State, the first thing you need to do is to come up with an Florida limited liability company name that’s unique and distinguishable. And when we say distinguishable, your desired Florida LLC name must be “distinguishable upon the records”, meaning unique from the names of all existing businesses recorded in the Florida Department of State’s database.
Here are the naming guidelines for a Florida limited liability company:
- Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
- Your Florida LLC name cannot include a designator that makes it sound like a different type of legal entity, such as the words or abbreviations corporation, Cor., Inc., Incorporated, Limited Partnership, LP, L.P., or Trust.
- Your name cannot include the words that could confuse your company with a government agency such as the FBI, Treasury, State Department, etc.
- Restricted words such as Bank, Attorney, University may require additional paperwork and a licensed individual, such as a doctor or a lawyer to be part of your Florida LLC.
You can check for other requirements under the Florida Name statute: Chapter 605, Section 0112 of the Florida Revised LLC Act
Next, you need to check whether the URL is available. It is recommended for you to check online to see if your business name is available as a web domain. This is important as even if you don’t plan on creating a business website today, you might just want to buy the URL anyway in order to prevent others from acquiring it in the future.
Step 2. Florida Registered Agent
In order to legally conduct business in the state of Florida, your company must always have a Registered Agent on file with the Division of Corporations. This is needed in order to receive Service of Process on behalf of the LLC. Service of Process includes legal documents such as notice of lawsuits, subpoenas, summons, and complaints.
If you do not have a Florida Registered Agent when opening up your LLC, you may be faced with various penalties. In fact, the Florida Department of State may even administratively dissolve or shut down your LLC if you fail to comply with this requirement. If your LLC faces administrative dissolution, it means that you won’t be able to do business in the state anymore.
Your LLC’s Registered Agent is a person and they must be at least 18 years old and be a resident in the state of Florida. You can even assign yourself, a friend, or a family member to be your Florida limited liability company’s Registered Agent so long as the three requirements (including the physical street address) stated above are met.
Alternatively, if you do not possess an address in the state of Florida or prefer to keep your address off the public records, then you can hire a Commercial Registered Agent. A Florida Commercial Registered Agent acts as a middleman between your company and any state of legal correspondence.
They will be the ones to receive any legal mail sent to your Florida limited liability company and forward it to you. Some companies will even scan your mail and upload it to your dashboard for viewing online.
Step 3. Florida LLC Articles of Organization
Florida LLC Form: Articles of Organization (Form CR2E047)
Florida limited liability company Filing Fee: $125 (one-time fee)
Florida limited liability company approval times:
- 1-2 business days if you file your Florida limited liability company online.
- 5-7 business days if you file your Florida limited liability company by mail.
- 30 minutes if you file your Florida limited liability company in person.
Below are what you need for filing your Florida limited liability company for each method.
File your LLC online (recommended)
Article of Organization for Florida LLC (e-File)
File your Florida limited liability company by mail
Article of Organization for Florida LLC (CR2E047)
Pay by check or money order and make it payable to “Department of State”
Mail your completed Article of Organization and $125 filing fee :
New Filing Section
Division of Corporations
PO Box 6327
Tallahassee, FL 32314
File your Limited Liability Company in person
Bring your check or money order that’s payable to “Department of State” along with your completed Article of Organization to the Division of Corporations at:
New Filing Section
Division of Corporations
2515 N Monroe Street, Suite 810
Tallahassee, FL 32303
Ensure you arrive at their office before 4:30 pm in order for your Article of Organization to be processed on the same day. If you want the shortest wait time, you should arrive as early as possible.
Items listed in your Articles of Organization:
- Company name
- Principal office address
- Florida Registered Agent (name, street address, and signature)
- Name and address of each member and/or manager
- Effective date
- Additional provisions (if applicable)
- Name and signature of your LLC organizer
When filing on Sunbiz or by mail, you will be asked for the name and address of the person(s) authorized to manage your LLC. Only LLC managers should be listed here.
If you leave the “person(s) authorized to manage your LLC” section blank, the state will assume your LLC is member-managed and member privacy will be completely protected. You have until the due date of your LLCs first annual report to decide how your LLC will be managed.
Certificate of Statue and Certified Copy
While filing your LLC Article of Organization, the Florida Division of Corporation allows you to order a Certified Copy of your Articles for $30 extra and/or a Certificate of Status for $5.
Florida LLC Approval
After the Florida Department of State approves your LLC, you will receive a stamped and approved copy of your Article of Organization, an Acknowledgement Letter, and a Certified Copy or a Certificate of Status (provided you ordered them). If you file online, these will be emailed to you. If filed by mail, they’ll be returned to you by regular mail. And if filed in person, you’ll receive them on the spot.
Copies of LLC forms
If you need an extra copy of the LLC’s Article of Organization, you can download it by searching your LLC on Sunbiz and scroll to the bottom under “Document Images”.
For further information on the LLC Articles of Organization statute:
Chapter 605, Sectio 0201 of the Florida Revised LLC Act
Step 4. Florida LLC Operating Agreement
The Article of Organization is the official document that forms your LLC, then the Operating Agreement is the document that will govern your LLC.
Unlike the Article of Organization, fortunately, you don’t need to file your Operating Agreement with the Florida Department of State (or with any other agency). This is an internal document that goes with your LLC/business records.
An operating agreement usually contains the names of the owners (also known as Members), how much of the LLC each member owns, how the LLC is managed, how the business is run, the duties and responsibilities of owners, managers, and officers, how taxes are paid, as well as how profits and losses are managed.
Regardless of whether your LLC has one member or several members, it’s always a good idea to have an Operating Agreement for your LLC in Florida. You can also download a free Florida Operating Agreement in one of the following 3 formats: PDF, Google Doc, or Microsoft Word.
Having an operating agreement is important as it provides a comprehensive written document on how to handle disputes and arguments among members. This document spells out the “bylaws” of how you conduct the business and ensures that all business owners are on the same page to reduce the risk of future conflict.
Though this is not required for an LLC based in Florida, it is good practice to have one. Having an operating agreement can also help maintain your personal liability protection in case you ever end up in court.
For further information on the LLC Article of Organization statute:
Chapter 605, Sectio 0105 – 0107 of the Florida Revised LLC Act
Step 5. Federal Tax ID Number / Employer Identification Number (EIN)
After the Florida Department of State approves your LLC filing, you’ll need to get a Federal Tax ID Number for your LLC from the IRS. Remember to only apply for the Federal Tax ID Number after your LLC is registered in the state of Florida. Otherwise, you may have a Federal Tax ID Number connected to a non-existent LLC in case for whatever reason your LLC filing gets rejected.
The LLC’s Federal Tax ID Number is similar to our Social Security Number in that it identifies your business entity with the IRS and will be used for taxes and reporting. A few common names the Federal Tax ID Number is also called include:
- Employer Identification Number (EIN)
- Federal Employer Number
- Federal Tax Number
- Tax ID Number
- Federal Employer Identification Number (FEIN)
Other than using this for tax purposes by the IRS, the LLC’s Federal Tax ID Number is required when you open an LLC business checking account. You’ll also need the Federal Tax ID Number when operating with other businesses as well as the registration of certain business licenses and permits.
Applying for the Federal Tax ID Number with the IRS is free and won’t cost a dollar as there’s no filing fee. There are a few methods of applying for the Employer ID Number: online, fax, or by mail.
File Online (Recommended)
Filing an EIN online offers an extremely fast approval time of 10 to 15 minutes. You’ll even get a PDF printout with your Employer ID number at the end of your application. The online application is available Monday to Friday from 7 am to 10 pm Eastern time.
An important note is that you can only use an online EIN application if you have an SSN or ITIN. Also, you’ll need to make sure your LLC is not owned by another company and must be owned by one (or more) people.
File by Fax
To file by fax, you’ll need to complete and sign Form SS-4 and fax it to the IRS at 855-641-6935. You don’t need a cover letter for this. This method will take a longer approval time compared to the previous method. Your EIN will be approved in approximately 4 – 5 business days.
File by Mail
If you don’t have a fax machine, you can mail the completed and signed SS-4 form to the IRS at the mailing address below:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
This will take the longest approval time and your EIN will be approved in approximately 4 -6 weeks.
Step 6. Annual Report
All LLCs in Florida must file an Annual Report every year to remain in active status with the Department of State and to avoid being administratively dissolved or shut down. The Annual Report Fee in the State of Florida costs $138.75 and is due every year.
Your Annual Report must be filed before May 1st every year and it can be filed as early as January 1st. Make sure you’re not late as anything received after May 1st will be assessed with a hefty penalty.
If you’re late for your Annual Report, you are required to pay a $400 late fee, bringing your total amount due to $538.75. If you ignore the requirement for a Florida Annual Report, the Department of State will shut down your LLC after the 4th Friday in September.
Step 7. Business Licenses and/or Permits
After your LLC is formed, you will need to obtain the necessary business licenses and/or permits in order to legally operate and start a business in Florida. Florida does not have a statewide general business license so the kind of business licenses and/or permits it may need will depend on its location and nature of business.
To get more details on the type of licenses and/or permits your LLC will need, it is best to contact the officials of the county where your LLC is located and the Department of Business & Professional Regulation.
Step 8. Florida State Taxes
By default, LLCs are taxed either as Sole Proprietorships for single-member LLCs or Partnerships for multi-member LLCs.
Since these LLCs have pass-through taxation, you can rest assured knowing that your company is not subjected to double taxation like a Corporation. However, the profits and losses from your business will be reported on a Schedule on your personal tax return.
Though Florida does not impose any personal state income tax, your LLC may still have to pay certain taxes depending on its line of business and how it derives income.
Your company may also need to register with the FL Department of Revenue for corporate taxes, sales taxes, withholding tax, and other taxes too, depending on your unique business situation.
We understand that calculating your federal, state, and local taxes can be complicated and rather time-consuming. If one incorrectly, your business may be negatively affected. For that reason, we recommend that you work with an accountant in Florida after forming an LLC.
Step 9. Bank Account
After it is approved by the Department of State and has an Employer ID number, the next step for you is to open a separate bank account.
Opening a separate bank account will make accounting and recording much easier in addition to ensuring that only your LLC’s assets will be used to pay off any debt or lawsuit.
A few items you need to open an account include the stamped and approved copy of your Articles of Organization, Employer ID Number, and two valid IDs (passport or driver’s license). Some banks may require extra documents, it is best to call them ahead of time in order to be prepared.
Step 10. Business Phone Number
At the very last step on how to start an LLC in Florida (FL), we look at the phone number. Rather than using your home telephone number or personal cell phone, you can easily and affordably purchase a virtual business number.
You can set this virtual business phone up to forward all calls to your cell phone, go through voice prompts, or configure it in any way you like.
Getting a separate business phone number for your company is a good idea in order to keep your actual number private from pesky “public record” websites.
Frequently Asked Questions (FAQs)
Do I need a DBA or a Trade Name for my business?
No, as mentioned in the “How to start an LLC in Florida (FL)” above, most LLCs do not need a DBA. The name itself can serve as your company’s brand name and you can accept checks plus other payments under the same name. However, you can still register for a DBA if you wish to conduct business under another name.
Is a Registered Agent service worth it?
Yes, a professional Registered Agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional registered agent include privacy, peace of mind, and preventing lawsuits, which significantly outweigh the annual costs.
What is the difference between a domestic Florida LLC and a foreign LLC?
An LLC is referred to as a “domestic LLC” when it conducts business in the state where it was formed, in this case, the state of Florida. Normally when we refer to an LLC we are referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to cover
How do I get an EIN if I don’t have a Social Security number?
A Social Security Number (SSN) is not required for you to get an EIN. All you need is to simply fill out the IRS Form SS-4 and leave section 7b blank. Then you can call the IRS at 267-941-1099 to complete your application.
Which tax structure should I choose?
When you get an EIN, you’ll be informed of the different tax classification options available. Most LLCs will elect the default tax status. However, some may choose to reduce their federal tax obligation by choosing S corporation status. It is recommended for you to consult a local accountant to find out which option is best for you.
How long does it take to form an LLC in Florida?
It takes roughly about 2-4 weeks online or by mail to file Florida LLC Articles of Organization for your limited liability company formation.
How to Dissolve an LLC in Florida?
If you’re looking to shut down operation and dissolve your business entity, you must formally dissolve the business structure. The failure to properly dissolve within the time-frame would result in potential legal implications, penalties and tax liabilities. The methods into dissolving your business entity could be carried via closing your business tax accounts or through filling the Florida Articles of Dissolution.
Starting a business correctly doesn’t have to be difficult. With over 15 years of experience consulting new businesses and start ups, Matthew is probably the best person to help you set a strong foundation for your business.