A step by step guide on forming an LLC in Florida (and its advantages)
Interested in setting up an LLC in Florida? Explore these 5 easy steps to get you there (and the benefits of forming one).
How to form an LLC in Florida:
- Create a name for your LLC
- Pick a registered agent
- File the Florida Articles of Organization
- Set out a Florida LLC operating agreement
- Get an EIN
Create a name for your LLC
This is an important step to forming your LLC. Your name needs to comply with the regulations for naming an LLC in Florida. These naming guidelines are:
- The name must include, at the very minimum, the letters “L-L-C” if not the entire “Limited Liability Company.”
- Do not include words that can be confused with government agencies (e.g. FBI/ Treasury).
- Certain words are restricted (like bank, university), but they may be included in your name. The correct paperwork and a licenced professional (e.g. a lawyer) may be required to be part of your LLC.
- Tip: Check to see if your name’s domain is available. This will prove valuable even if you are not interested currently in setting up a website.
Pick a registered agent
You are required to appoint a registered agent for your Florida LLC. This person will be the connection of contact between your LLC and the state. They perform duties on behalf of your LLC such as receiving vital tax and legal documents, notice of lawsuits and government correspondence. The registered agent can be elected from within the business (provided they are a full time resident of Florida) or a registered agent service can be hired to fulfil the duties.
File the Florida Articles of Organization
The third step requires you to file a legal document (the Articles of Organization with the Florida Division of Corporation) to register successfully. This can be fulfilled either online, by snail mail, or in person.
Set out a Florida LLC operating agreement
This is not required to form an LLC in Florida, but it is a good idea. This operating agreement will lay out the ownership and operation of the LLC. This will reduce the risk of conflict later on.
Get an Employment Identification Number (EIN)
This number will be used to identify a business entity and record the business’s tax reporting. Having an EIN for your business is required for Federal and state tax duties. However, it also will allow you to open a business bank account and hire employees.
- Read more tips and information about LLC’s in Florida.
Advantages of forming an LLC in Florida
Setting up an LLC in Florida does come with benefits for your business:
- Control and simplicity: The registration process is kept uncomplicated and quick. Restrictions as to the number of members and managers the LLC may have do not apply which allows for more control over the operation of your business.
- Member and manager privacy can be awarded: By filling in only the necessary information on the “Article for Organization of an LLC” form you can protect the privacy of your managers. Moreover, if you leave the section blank that reads: “Person(s) authorised to manage your LLC” the state will assume that your LLC is member-managed which affords members their privacy.
- Protection of personal assets: This is arguably the most valuable benefit that this business structure can offer. If debt or liability is incurred by the business the members’ private assets can not be claimed to pay the owed amount. An LLC is a recognised legal entity and provides protection of personal assets.
- “Pass through’ taxation:All profits that are made by the LLC are not considered income tax which results in no need to pay self-employment tax. Instead, the business does not pay taxes itself but ‘passes it along’ to the members. The members must pay income tax on all profits made from the LLC.