Starting LLC in Florida: Peculiarities & Detailed Manual
Want to start an LLC in Florida? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in Florida, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An Florida LLC: The Notion & Essence
Many Florida business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of Florida puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet Florida’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of Florida obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with Florida’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in Florida and will help you to start an LLC. The agent can be an Florida resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner.
According to part I of Chapter 607, every enterprise in Florida or every foreign company qualified or becoming qualified to transact a business in this state is obliged to designate a registered agent and an office with a physical address. Every company should keep the registered office open from 10 AM to 12 noon every working day (except Sunday, Saturday, and governmental holidays). Most keep one or more registered agents to receive processes that can be served in the company’s office. It’s also mandatory for a corporation to place a sign in a prominent place of the office with the name of the corporation and its registered agent, to whom it’s possible to submit a process.
A registered agent guarantees an excellent reputation for your Florida LLC. Also, if your business gets worse, Florida can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in Florida, you must file the Articles of Association with the Florida State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
You have an opportunity to fill a form online, or you can print it out and send it by mail as well.
Cost to form an LLC: You are required to pay a fee of $100 to open an LLC in Florida.
Processing time: The duration of the processing of your paperwork depends on the manner you file it. When it comes to electronic LLC formation documents, the state will need 2-3 working days to finalize the processing and send the documents back to you. And for mailed paperwork, the processing time can be longer: 3-5 working days.
Keep in mind that you will have to pay $25 for registering an agent, so the minimum start-up budget equals $100. Moreover, if you want to get a certified copy of your documents, you will have to pay an extra $30. Please consider that the counting of business days begins only once all the required documents are put in order and filled out appropriately.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in Florida, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
The amount of taxes applied to enterprises in Florida depend on the sphere of the business. Take into account that the state doesn’t collect income taxes from individuals: it means that if your LLC is registered as a pass-through entity (individual ownership or a partnership), your business will be free of charge. But the LLCs registered as corporations are required to pay the income tax in the amount of 5.5%.
If your LLC is specialized in selling goods, you will be subject to sales taxes. The general rate of this type of tax is 6%. If your business uses some items that you haven’t paid sales taxes for, you will have to pay the use tax. You can get to know more about the tariffs on sales and use in Florida here.
If your business is supposed to be present in another state, for example, make deliveries to other regions, you might be eligible for registration the taxes in other states as well. You can learn more information about the out-of-state taxes in Florida here.
Local Tax Business Demands
Some cities in Florida collect additional taxes, such as taxes on tourism or surplus sales. You can read more about the local taxes of Florida on this resource. You can also check out this link to see which local taxes (if any) apply to your business following its address.
Stage №6: Getting Business Licenses & Permits
Generally, the state of Florida doesn’t require every business to obtain a license.
However, the federal government levies some additional taxes for industries like aviation, agriculture, and more. To know which federally regulated fields of business require licenses and permits, consult the listings of the Small Business Association.
Moreover, some industry taxes are levied on the state level. The fields of business in Florida that require acquiring an additional license vary from real estate to cosmetology, so there are some chances you will have to pay at least 1 type of industry-specific tax. The list of Florida’s licensed occupations can help you determine which industry taxes may be applied to your business.
Although the state does not have a necessary business license, many cities and counties require you to pass a registration with a local administration office and obtain a license certificate from them. To get started, here you can find the list of county officials.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
Business Insurance
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the Florida Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
Income reporting
You should essentially file an income report, no matter if your business made or lost the money during the year. The state of Florida allows you to manage the taxes and accounts online using the help of an online accounting system. You can find this system here.
Referring to the services of a qualified accountant
The annual reporting is the way to inform the state’s government about all the changes that happened to your business during the year. You can file the reporting online on this page. Keep in mind that in Florida, you have an opportunity to file the annual reporting of the previous year within the period from January 1 to May 1.