Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
Florida is an excellent place to vacation, but it’s also a great place to start your business. The Sunshine State has many small businesses and other industries. When creating your business in Florida, you should decide what type of entity you want it to be.
In this article, we will teach you how to set up and maintain an LLC in Florida. LLCs are popular because they’re flexible, easy to form, tax-efficient, and have legal protection for their owners.
Step 1: Choose the Perfect Name For Your New Florida Company
When forming an LLC in Florida, you’ll first need to choose the right name for your company. To avoid confusion and give your business a unique identity, you must ensure that your company’s name differs from other companies or brands listed with the Florida Division of Corporations.
Your business name must end with “LLC,” “L.L.C.,” or “Limited Liability Company.”
However, licensed professionals in Florida may choose to form a PLLC or professional limited liability company, whose name should end with “PLLC,” “P.L.L.C.,” “Professional Limited Liability Company,” or “chartered.” You’re restricted from using specific words to name your LLC, particularly those that reference banks and other regulated industries.
If you’re opening a business, it’s essential to check that your name isn’t like one already in use. You can search this on Florida’s Division of Corporations’ registry. Florida has additional considerations: when you register your LLC’s articles of organization, you should do so as quickly as possible. However, if there is already a company with your name, you’ll need to change it or ask that company for more information first.
Step 2: Find a Registered Agent in Florida
In Florida, when you create an LLC, the person designated as your registered agent should live in Florida. Any business that acts as a registered agent for your company must have an actual address — not a P.O. Box — within Florida and be authorized to do business. This service cannot be the person filing the business or a member of the company.
If you’re creating an LLC in Florida and want to be a registered agent, you should consider using a service. Some services offer a registered agent service that you can use to help create your LLC. The service is often available for a low monthly fee and can help you with the paperwork and filings for your company.
Step 3: Obtaining Your Florida Business Licenses
When you start a business in Florida, you may need to get a license, depending on your industry. You can find out what licenses are required when starting an LLC in Florida by visiting the website of Florida’s Department of State and selecting your desired occupation from the list of available licenses.
To get a Florida LLC license, you must first select your desired occupation from the list of available licenses on the Florida Department of State website. Once you’ve chosen your occupation, the site will direct you to a page with information on how to apply for a license.
The cost of a Florida LLC license depends on the type of license you need. For most occupations, the cost of a license is $50. However, some occupations require a higher fee, such as real estate brokers, who must pay a $200 license fee.
You’ll need to register a fictitious business name if the trade name you use isn’t the one on your corporate registration. If your company is named Smith and Keye, LLC, but you operate as “Smith’s Window Washing.” You should register the fictitious business name in advance for this operating name with Florida’s Division of Corporations. And remember that another entity in Florida can’t already use the right to have a fictitious business name. Search Florida’s database of business names to find out if your desired fictitious name or is available.
The Florida Department of Revenue (FDR) says that all businesses that sell taxable goods or services in Florida must register with them. They also need to pay sales tax and file returns periodically, with their deadlines varying based on the sales tax collected by your business each year.
Step 4: Filing Your Articles of Incorporation in Florida
The Florida LLC articles of organization should include the following:
- The LLC’s:
- Principal place of business.
- Names and addresses of all of the LLC members.
- Registered agent’s:
- Florida address
- If the LLC has a manager, their name and address.
- The effective LLC start date.
- The signature of the person filling the form — must be an LLC member or authorized individual.
The state typically takes about a week to review articles filed online and two or three weeks for those mailed in. They post the processing times and dates online here. You can access your approved articles online, like any other entry, and keep them on file with other essential records. If Florida denies your articles — perhaps for an administrative error, you’ll have a limited amount of time to fix any errors.
Step 5: Drafting an LLC’s Operating Agreement
The requirement of an LLC, according to Florida law, is not necessary to use an operating agreement. Still, we recommend it because it can be beneficial for your business.
An overview of things to include when starting an LLC in Florida:
- The LLC’s purpose, including any products or services you may offer.
- All names and addresses of your various LLC members.
- Each member’s percentage of ownership in the company, profit share, and voting rights.
- What each member contributes to the LLC.
- How you will add new members
- How you will elect new managers if your LLC has one
- The upcoming schedule for meetings and how you will vote on topics
- You dissolution plan
Establishing the operating agreement for an LLC can be challenging for those new to running a business, but online registration services can help simplify these issues. Review the document, then sign and store it with other vital LLC documents.
Step 6: Choose Your Tax Entity
If you register an LLC, you can choose to form a pass-through entity for taxation purposes. This means that the tax form for your LLC needs to be filed on each member’s tax return instead of separately.
If you would like the IRS to tax your business as a corporation, your business will be held liable for any federal taxes, such as corporate, and will need to pay business taxes separately.
LLC members are taxed in self-employment at 15.3% to cover Medicare and social security obligations at the federal level. If you employ staff, you must take Medicare and social security taxes from them and pay an employer’s part of the taxes. You will also have to pay a federal unemployment tax and Florida state’s regular unemployment taxes.
Step 7: Get Your EIN
When the IRS taxes your company as a corporate entity, you need to register for an EIN. The IRS requests your EIN if you want to file your business taxes with the federal government, and your Florida LLC requires an EIN to open a corporate bank account.
Besides these steps, Florida LLCs with staff should also be aware of some additional responsibilities, including:
- Employers must submit new employees by the first 20 days of hiring.
- New employers will have to cover a 2.7% payroll tax for insurance for their state to maintain unemployment benefits for their employees. Existing employers pay between 0.1% and 5.4%.
- LLC members are typically counted as employees for purposes of purchased coverage. Partnerships are an exception.
- Hiring a professional lawyer who focuses on employment-related legislation is often beneficial when creating your incorporation documents. This person can inform you of any laws that may affect the legality of the documents and their enforceability.
Step 7: Remember to File Your Annual Report
Florida doesn’t charge a state income tax, making it particularly attractive to LLCs. Owners of Florida LLCs don’t have to pay state income taxes on profits, which makes Florida a good choice for many.
LLCs in Florida must e-file annual reports to update their business information. You’ll need to file the report before May each year. If not filed by September, your business will be restricted from operating in Florida, so you should submit the report and a fee of $138.75.
Cost to Start an LLC in Florida
The state filing fee in Florida is $125, while the annual report is $138.75.
What To Do After Forming Your LLC in Florida
Even after you’ve formed your LLC, a few steps are crucial to complete before opening for business. These steps include a few steps that we previously listed above.
You will want to make sure you have:
- Created an operating agreement
- Gotten your EIN
- Opened business bank accounts and credit cards
- Employed an accountant
- Learn about your LLC taxes so you know how much of your profits to reserve
- Research and receive any necessary business licenses and permits
- Gotten necessary insurance
- Established your web presence
- Published a press release
After forming your LLC, taking the time to do these things will help you keep your finances accurate, comply with necessary regulations, and attract customers.
How to Keep Your LLC Compliant in Florida
Besides the previously listed steps, if you will be selling any physical products, you will need to get a sales tax license from the Florida Department of Revenue. This will allow you to collect and pay sales tax on your products.
Register your LLC with the Florida Department of State. The Florida Department of State is the government agency that handles business filings in the state. You will need to register your LLC with this agency before you can do business in Florida.
Every year, you will need to file an annual report with the Florida Department of State. You will use this report to update the state on your company’s contact information and registered agent.
There are other regulations that LLCs are required to comply with in Florida. These include having a registered agent, having an operating agreement, and holding annual meetings.
If you fail to do these things, you will not keep your LLC compliant.
Tax Filing Requirements for LLCs in Florida
The state of Florida requires LLCs to pay an annual fee. This fee is due on the anniversary of your LLC’s formation date.
In addition, Florida requires all LLCs to file an Annual Report with the Department of State. The Report is due by May 1st and must include information about your LLC’s members, managers, and your registered agent.
As mentioned, there are no state taxes for LLCs in Florida.
Frequently Asked Questions
Here are some answers to frequently asked questions about starting an LLC in Florida.
How long does it take to register an LLC in Florida?
It takes about 4-6 weeks to form an LLC in Florida. This is based on the time it takes to file the Articles of Organization with the Florida Division of Corporations.
The Articles of Organization is the document that actually forms your LLC. Once the Articles of Organization are filed, your LLC is officially formed.
You can file the Articles of Organization in person, online, or by mail. Filing in person takes about 2-3 weeks and is the fastest option. Filing online takes about 4-6 weeks and is the most common option. Meanwhile, filing by mail takes the longest, at about 8-10 weeks.
What tax structure should I choose for an LLC in Florida?
There is no one-size-fits-all answer to this question, as the best tax structure for an LLC in Florida will depend on the specific circumstances and needs of the business. However, some factors that may need to be considered include the size and structure of the business, the types of income and expenses the business has, and the business’s overall tax liability.
In Florida, some common tax structures for LLCs include the single-member LLC, the multi-member LLC, and the S corporation.
The single-member LLC is the simplest form of LLC and is typically used by businesses with only one owner. This type of LLC is taxed as a sole proprietorship, which means that the business owner is responsible for paying taxes on the business’s income. The single-member LLC is good for businesses with simple structures and low tax liabilities.
The multi-member LLC is more complex than the single-member LLC and is typically used by businesses with multiple owners. This type of LLC is taxed as a partnership. Each business owner is responsible for paying taxes on their share of its income.
The multi-member LLC is suitable for businesses with complex structures and high tax liabilities.
The S corporation is a good choice for businesses with high tax liabilities. The S corporation is a type of corporation that is taxed as a pass-through entity. The business’s income is taxed at the individual owner’s tax rate.
Should you hire an LLC formation service in Florida?
There is no requirement to hire an LLC formation service in Florida, but many people choose to do so to save time and ensure that the LLC is properly formed.
LLC formation services can help you choose a business name, file the necessary paperwork with the state, and obtain an Employer Identification Number (EIN) from the IRS.
LLC formation services typically charge a flat fee, which can range from $50 to $500, depending on the complexity of the LLC and the services provided. If you’re curious about hiring one, check out our recommendations for the best LLC services.
Filed under: Florida Business Guides