Business

How to start an LLC in Florida?

How to start an LLC in Florida

A Limited Liability Company (LLC) is a legal entity created to run a business. LLCs are hybrid entities that enjoy pass-through tax status similar to sole proprietorship or partnership while offering the liability shield of a corporation. Setting up an LLC in Florida is an easy process. You must follow nine steps to start an LLC in Florida. This guide will take you through the nine steps to form an LLC in Florida.

  • Name your Florida LLC

Before registering an LLC, you must choose a name for your LLC. However, you must comply with Florida’s naming requirements. Following are the conditions you must keep in mind:

  1. The name of your LCC must include the words Limited Liability Company, LLC, or LLC in it.
  2. You must choose a unique and novel name for your LLC that differs from existing business structures. You can check for the name on the Secretary of State’s website to determine if a particular business name is in use.
  3. Your LLC’s name should not contain words such as State Department, CIA, FBI, Treasury, etc., used to name a government agency.
  4. Few restricted words, such as banks, attorneys, credit unions, etc., may require additional documentation and licensure paperwork.

Additional requirements:

  • URL availability

One should reserve a domain name for his company, even if they don’t think they will need a website for the company. They should be able to buy your domain name now and reserve the option of getting it in the future.

  • Reserve your name

A person can reserve the name of their LLC for a small fee by filing an entity name reservation or an application for reservation renewal with the Texas Secretary of State. The names are reserved for 120 days by paying a fee of $40 and submitting the proper form to the state authority. This gives you some time to decide if you want that name and protect it from someone else using it. Reserving your name also gives you some time to file your formation papers.

  • Choose your registered agent.
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For your LLC, you must appoint a registered agent. A registered agent is a person or organization authorized to accept service of process and other formal legal documents and notices on your LLC’s behalf. The

  1. registered agent
  2. Must be mentioned in the certificate of formation. It can also be sent by mail.

The following steps need to be followed to prepare articles of organization:

  1. LLC name and principal place of business.
  2. Name and address of your registered agent
  3. Name and address of all LLC members
  4. Name and address of manager in case of member-managed LLC.
  5. The reason for forming the LLC in a general description.
  6. The term of the
  7.  LLC or the period during which the LLC will exist. LLCs are mostly perpetual. Perpetual LLCs can be dissolved voluntarily or involuntarily. If it is for a specified person, the selected date must be mentioned.
  8. Management structure: whether manager-managed or member-managed LLC.
  9. The person forming the LLC, along with the registered agent, is required to sign the Articles.

Upon filing the Articles, the Secretary of State will review the filing, and on approval, the LLC becomes a legal business entity.

  • Receive a certificate from the State.

The State issues a certificate establishing the existence of an LLC after the formation documents are filed and approved. This certificate entitles the LLC to an EIN, business licences, and opening a business bank account.

  • Create an operating agreement.

An operating agreement is a document that specifies how an LLC will conduct its operations. Even though an LLC is not required to file an operating agreement, it is a necessary component of your organisation. A readily accessible written operating agreement is helpful for various reasons, including resolving conflicts. Without an operating agreement, the courts may decide based on state law, which might not always be in the LLC’s and its members’ best interest. The operating agreement includes the following:

  1. LLC’s name and principal address
  2. Duration of LLC
  3. Name and address of the members of the LLC
  4. Name and address of the registered agent
  5. Purpose of the business
  6. Members and their contribution
  7. Information about the Articles of Organization
  8. The manner in which profit will be divided
  9. Each member’s ownership stake in the company, voting rights, and profit share.
  10. Procedure for admitting and removing a member
  11. Management of the LLC
  12. Indemnification and liability clauses
  13. Dissolution terms
  14. Get an Employer Identification Number (EIN)
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EIN is a nine-digit number the Internal Revenue Service’s assigns to identify LLCs for taxes. One can obtain EIN by mail or online through IRS. EIN assists with the following:

  1. File and manage taxes at the state and federal levels.
  2. Obtain licences and permits
  3. Open a business bank account
  4. Hire employees
  • Business Licenses in Florida

A Florida business license is required for LLCs in several industries. You can find out if your business needs a business license by looking it up on Florida’s Secretary of State Website.

  • Establish a Bank Account

To conduct business in Florida, having a bank account for LLC in Florida is essential.

  • Compliance with employer obligations

Within 20 days of hiring or rehiring, the LLC must report the new employees to the Florida Department of Revenue. The LLC must purchase worker’s compensation insurance as soon as the fourth person is hired. 

FAQs

  1. How much does it cost to start an LLC in Florida?

    It costs $125 to start an LLC in Florida.

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

    Yes, a yearly fee for an LLC in Florida of $138.75 must be filed annually with the annual fee.

  3. Is it free to open an LLC in Florida?

    No, it is not free to open an LLC in Florida. It costs $100 to get a Florida LLC, and an additional $25 is required to designate a registered agent.

  4. Is an EIN required for an LLC in Florida?

    An EIN is required for an LLC in Florida to open a bank account.

  5. How much taxes do an LLC pay in Florida?

    Florida is tax-friendly, and LLCs are exempt from paying state income tax.

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