Many business owners in Florida are opting to form an LLC rather than a C corporation due to the ease and flexibility. It also provides the limited liability of a C corporation without the hassle of complicated tax paperwork and operating regulations.
An LLC in Florida is easy and quick to set up. As with starting any business, there are certain steps that need to be followed in order to ensure the business is able to trade legally. The 5 simple steps to follow to set up an LLC correctly are:
- Name the LLC
Every business needs to have a name for trading. The guidelines for selecting a business name in Florida are as follows:
- The name of the LLC needs to include either “Limited Company”, abbreviation “(LC)” or “Limited Liability Company”, abbreviation “(LLC)”.
- The chosen name of the LLC must be recognisable and not similar to an existing registered name. It can also not include any words that might confuse the LLC with being a government institution (FBI, State Department, ect.).
- Some words (University, Bank ect.) might require additional paperwork to be filed as well as a registered professional to be a member of the LLC.
In order to check the availability of the chosen name, the Sunbiz Florida website can be used to do a name search. It is also advisable to check that the URL is available if the LLC will have a website set up. An URL can be purchased in advance before the LLC name is registered.
- Appoint an agent
Every LLC in the state of Florida has to have a registered agent. A registered agent will receive all tax forms, legal paperwork and lawsuits. The agent acts as the go between the LLC and the State. The agent can be an individual or a business that is registered to do business in Florida. The agent must also be a full time resident in Florida and have a physical street address in the state. The agent may also be someone within the business such as yourself.
- File the Articles of Organization
To register an LLC in Florida, Articles of Organization must be filed with the Florida Division of Corporation. This can be done online via the MyFlorida Sunbiz website. The cost of filing the Articles of Organization is $125. This is a legal document required to form the LLC. The Articles will have to include the following:
- The name, signature and address of the appointed registered agent
- The address (mailing and physical) of the LLCs head office.
- The name and addresses of the manager/s within the LLC
- The date the LLC became effective, only if it is different from the filing date
- A member or authorized representative signature
The LLC has until the due date of the first annual report to decide how the LLC will be managed. Should an existing LLC in another state wish to expand its business to Florida, a Qualification of Foreign LLC will have to be filed.
- Create an Operating Agreement
An operating agreement is an internal document outlining the operating procedures of the LLC. It also defines the roles of the members and managers, including how the LLC will be managed. It is not required in Florida to submit an operating agreement, but is advisable. It can be filed in conjunction with the Articles of Organization.
- Obtain an Employer Identification Number (EIN)
The Internal Revenue System (IRS) issues a 9 digit number also known as an Employer Identification Number (EIN), Federal Tax Identification Number (FTIN) or Federal Employer Identification Number (FEIN). The number is used to keep track of the tax reporting for the business and to identify the business. It can be viewed as a social security number for the business. An LLC will need an EIN in order to:
- Open a bank account for the business
- Hire employees
- File federal and state tax returns
There is no cost in obtaining an EIN and can be done via the IRS by the business owner. It can easily be done online or via the mail.
Final scoop: With the above information in hand, setting up your new LLC in Florida may be quicker and easier than you thought.
