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Entrepreneur’s Guide to Setting Up a Florida LLC

Entrepreneur’s Guide to Setting Up a Florida LLC

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Entrepreneur’s Guide to Setting Up a Florida LLC

Are you considering starting your own business in Florida but don’t know where to start? One early step to work on is forming the business structure, and a popular choice is the Limited Liability Company (LLC).

There are many benefits to forming a Florida LLC, and this guide will explain what an LLC is, the benefits of forming one in Florida, and how to go about doing it.

Related: Guide to starting a business in Florida

What is an LLC?

A Florida Limited Liability Company is a type of business structure (also called a business entity) that’s popular in Florida for a few good reasons. It offers the owners, often called members, protection from being personally responsible for the business’s debts and liabilities. This means if the business owes money or faces a lawsuit, the personal assets of the members, like their homes or cars, are usually safe.

Unlike a sole proprietorship or general partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because it offers multiple tax options, management flexibility, and fewer formalities (such as no required annual meetings) than the corporation.

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Steps To Form A Florida LLC

Step 1: Choose the LLC Name

The first step in forming a Florida Limited Liability Company is to make sure the name you want is available. The most important consideration when picking an LLC name is that it has to be distinguishable from other registered entity names in the state of Florida.  A name that is different from the name of another entity or filing due to any of the following is not considered distinguishable:

  • A suffix
  • A definite or indefinite article
  • The word “and” and the symbol “&”
  • The singular, plural, or possessive form of a word
  • A punctuation mark or a symbol

Learn how to easily do a Florida LLC name search through the Florida Department of State’s business entity database.

In addition to picking a unique name, there are a few restrictions to naming a Florida LLC. These include:

1. Using an approved entity designator at the end of the business name:

  • Limited Liability Company
  • LLC
  • L.L.C.

A comma may be used after the business name and before the designator.  “Orange Blossom Boutique LLC” and “Orange Blossom Boutique, LLC” are both acceptable.

2. The use of some words in the LLC name is prohibited, such as those that may infer a federal, state, or municipal government agency. There are additional restrictions against certain words in the name related to professions such as attorneys, locksmiths, banks, etc., unless the business is registered to provide such services.

3. The purpose statement that is described in the Articles of Organization (Step 3), may not contain language stating or implying that the limited liability company is organized for a purpose other than what was stated.

If you plan to use a different LLC name from the one used when initially setting up the LLC (perhaps you want to run multiple businesses under the LLC), you can register for a Fictitious Name (also referred to as a DBA or Doing Business As name). 

Before selecting a business name, you may also want to check the name availability of a domain name is also available to have a matching website address.

Step 2: Appoint a Florida Registered Agent

In Florida, every LLC will need to appoint a registered agent. A registered agent is simply an individual or company with a Florida street address who is responsible for receiving legal legal documents, such as lawsuit notifications, on behalf of the business.

While many LLC owners opt to fulfill this role themselves, some owners choose to hire registered agent services like Northwest Registered Agent. Utilizing a registered agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.

Related: What is a Florida registered agent?

Step 3: File the Florida Articles of Organization

The paperwork to create an LLC in Florida is called the Articles of Organization. To file, you can either file online or download the Florida LLC Articles of Organization from the Florida Department of State.

Related: How to fill out the Florida Articles of Organization

Turnaround time for the state to file the Articles of Organization is 1-2 business days when filing online or 5-10 business days when filing by mail.

If you have questions, contact the Florida Department of State, Division of Corporations.
2415 N. Monroe Street, Suite 810
Tallahassee, FL 32303
Phone: 850-245-6051
Sunbiz website: http://dos.myflorida.com/sunbiz/

Related: How to fill out the Florida LLC Articles of Organization

Tips for Filling Out the Florida LLC Articles of Organization

When filling out the Articles of Organization, there are a few sections that can sometimes trip people up when seeing them for the first time. Let’s go over a few of those sections.

Effective date: You may list an effective date if you would like the Limited Liability Company’s existence to become effective on a date other than the date it is filed by the Florida Department of State. The effective date can be up to 5 business days prior to the date of submission or up to 90 days after the date of receipt.

Principal place of business: In this section, enter the street address, city, state, zip code, and country of the business’s initial principal office.  This address can be the LLC’s physical address, or it can be the address where the business records are kept.  You may not use a PO Box for the principal place of business.

If you prefer to use an address different from the principal place of business for correspondence from the Department of State, enter that address in the mailing address field.  A PO Box is acceptable.

Name and address of person(s) authorized to manage the LLC: This section asks for the name and address of each manager or representative who is authorized to manage and control the company. There are three choices listed, but you are free to use any appropriate title.  The listed title definitions include:

  • (MGR) – The Manager is a person hired to perform the management functions of a manager-managed LLC.  This person may or may not be an LLC owner (officially referred to as a member)
  • (AMBR) – The Authorized Member is an owner of the LLC
  • (AP) – An Authorized Person is someone authorized to execute and file records on behalf of the LLC.  Typically an attorney or accountant.
If you are worried about making a mistake when forming your LLC, or just don't want to deal with filling out state paperwork, an LLC formation service will help guide you through the process. My top recommended services include:

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What To Do After Starting A Florida LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Florida LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Florida statute does not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Florida LLC operating agreement template

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.

Related: How to apply for an EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Government IDs of the LLC member(s).
  • Depending on the LLC’s age, a Florida Certificate of Status may be needed to prove the LLC is active and in good standing with the state.

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, various business licenses and permits will likely be needed. Some common registrations include:

  • Business license: There isn’t a general statewide business license in Florida, but some cities require businesses to obtain licensing before they can start.
  • Professional license: Certain services in Florida require state licensing, such as barbershops, accountants, salons, and others.
  • Sales tax permit: To sell products and certain services in the state, a sales tax permit from the Florida Department of Revenue will be necessary.

Related: What business licenses are needed in Florida?

File the Florida LLC Annual Report

LLCs are required to file an annual report each year with the Florida Department of State. This report updates ownership information and other details. The annual report fee is $138.75 and is due the first year following the LLC formation, between January 1st and May 1st.  If the report is filed after May 1st, a late fee is added to the cost.  If not filed and paid by the 4th Friday in September, the state will dissolve the LLC.

Related: How to file a Florida Annual Report

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Florida or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.

This material is property of StartingYourBusiness.com

Florida LLC FAQs

How much does a Florida LLC cost?

There is a $125 state fee to file the Florida LLC Articles of Organization.

Do you have to pay a yearly fee for a Florida LLC?

Yes – Each year, LLCs will file an Annual Report and pay the annual $138.75 filing fee.

How long does it take to start an LLC in Florida?

It normally takes 5-10 business days for an LLC to be approved in Florida when filing by mail and 1-2 business days when filing online.

For an additional fee, expedited processing is available.

Can a single person start an LLC in Florida?

An LLC in Florida can be operated by one individual or many. An LLC owned by one person is referred to as a single-member LLC.

What is a Foreign Limited Liability Company?

A Florida foreign LLC is an LLC initially formed in another state but wants to physically operate in Florida. Physically operating means having a presence, such as having an office or hiring an employee.

Related: What is the difference between a domestic LLC and foreign LLC?

What is a Professional Limited Liability Company?

Businesses that require occupational licensing from the State of Florida, such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc., may file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a Florida PLLC is very similar to that of the LLC.

Related: What is a Professional Limited Liability Company?

Can I register a Florida LLC name with an Inactive Status?

Generally, an LLC name with the Inactive status is available to register after 1 year. An Inactive/UA status means the name is held and may not be available, even after a year.

Entrepreneur’s Guide to Setting Up a Florida LLC

Entrepreneur’s Guide to Setting Up a Florida LLC

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