Starting an LLC (Limited Liability Company) in Florida is a relatively simple method of achieving the benefits of a fully-fledged corporation without any of the risks. As per the name, an LLC provides limited liability. Be it financial or liturgical; the business will face the brunt as a structural entity rather than the proprietor. Consequently, risk and profits are often shared among a registered number of owners rather than a sole proprietor.
Regulations apply to registering an LLC in the state of Florida, meaning that applications can either be accepted or rejected. Moreover, there are numerous vital steps that must be taken before an LLC can be considered a fully-fledged business entity in the eyes of the state. Here is an overview of those early crucial planning factors and how to fulfil them with ease.
Related: Best LLC Formation Services
Find a Business Name
When setting up a business, the LLC name should be first and foremost. While deciding your LLC’s name is primarily a matter of preference, some guidelines need to be adhered to in the state of Florida. Firstly, your company’s name must contain the letters LLC, LLC, or the words limited liability company. Without these words, a Florida LLC’s name cannot successfully be filed. Moreover, it’s forbidden to include any words or references that could lead the LLC to be mistaken for a government body.
The following words and acronyms are not permissible:
- Co, Corp, or Corporation
- LP, or Limited Partnership
- Agency terms such as FBI, Treasury, or State Department
These terms are forbidden as they refer to other business structures other than LLC.
How to check LLC name availability
The Florida Department of State’s website keeps a registrar of all business names registered in the state. To check if your desired business name is available, you can use their simple search tool that’ll let you know if your name is already taken. It’s also recommended that you check URL availability. Having an LLC name that matches your web domain name is a priority for most businesses.
Some LLC owners will also assign a DBA (doing business as) name to their company. Otherwise known as a trade or fictitious name, this is what the public will refer to the company as. All fictious LLC names are registered with Florida’s Division of Corporations. An e-register option is also available online on the Division of Corporations website. Mail applications are also accepted. There is a $50 filing fee. Once payed and issued, the registration is viable for five years.
Assign a Registered Agent
To remain in compliance with state law, an LLC must have an appointed registered agent. The registered agent is generally tasked with handling business processes and other official documents on behalf of a registered business entity.
A registered agent for an LLC can be a person or entity appointed to accept service of process and official mail on your business’s behalf. You can nominate yourself, or in Florida, you can nominate your business to be its own registered agent. Your company’s initial formation or registration document filed with the Secretary of State must designate a registered agent. The registered agent must sign the form to accept the appointment.
File Articles of Organization
Articles of Organization, otherwise known as “certificates of organization” or “certificates of formation,” are an integral part of establishing an LLC at the state level. The legal document itself outlines essential information about the LLC. It is used by either Secretary of State or the Company Registrar to determine whether your LLC is viable or not.
Specific requirements vary from state to state; however, in general, most states require the following information:
- State law
- Effective date
- Principal business location
- Organizer’s information
- Registered agent’s information
There is a $100 registering fee. If you need a certified copy of the Articles of Organization, there is a $30 fee.
When you form an LLC in Florida, you file Articles of Organization with the FL Department of State. Your Florida Articles of Organization can be filed online, in person, by mail, or by fax.
Get an Employer Identification Number (EIN)
EINs are unique, nine-digit numbers issued by the Internal Revenue Service (IRS) to every viable business entity. Their primary purpose is to report employment taxes. Much like social security numbers, EINs are never recycled and can only apply to one business entity. Eligibility for being issued an EIN is relatively simple. Being located in the US and possessing a Social Security Number are the only two criteria that must be met. Businesses need an EIN to pay their federal taxes online, file their annual tax return, and issue payroll and tax documents to suppliers.
How do you apply for an EIN in Florida?
Previously, most prospective business owners applied for an EIN by filling out a Form SS-4 and sending it to the Internal Revenue Service. However, the Internal Revenue Service are now encouraging people to apply online. Fortunately, applying for an Employer EIN is a free service offered by the IRS meaning that no fees must be paid.
Create Operating Agreement with other Members
An Operating Agreement is a form that customizes an LLC according to the owner’s preference, essentially acting as the framework and workings of the business. Put simply, it’s a legal document that outlines the ownership and member duties of your Limited Liability Company. While commonly viewed as a cross between corporate by-laws and stockholder agreements, small-scale LLCs can also possess an operating agreement.
Whether or not an LLC owner must own or file an operating agreement varies from state to state. In Florida, LLC owners are not required to file operating agreements with the Secretary of State or any other state agency. However, it’s highly recommended that an operating agreement is written up and signed by all founding members of an LLC, preferably in the early stages of business planning. Since an operating agreement is a crucial document outlining the business’ financial and functional decisions, including rules, regulations, and provisions, it’s indispensable to the operational harmony of a company.
The Bottom Line
Starting an LLC in Florida is a great way to limit your liability in any business venture. In order to take full advantage of this business structure it’s critical you follow the appropriate formation steps.
Whether you opt to do the work on your own or have a formation service assist you, take the time to create all the documents we’ve outlined in this article. By having all the appropriate documents set up with the state of Florida you can have more peace of mind going into your business venture. You will also have more clarity with any of your partners on the operation of the business.
Completing these things on the front-end will take some time, but it is well worth the effort.