Guide to Starting an LLC in Florida: 5 Steps – MarketWatch

Guide to Starting an LLC in Florida: 5 Steps – MarketWatch

Have you ever considered starting an LLC in Florida but didn’t know how? A solid choice for small businesses, the “limited liability company” (LLC) is a business structure that has the benefit of shielding its owners from personal liability related to the company. On the plus side, Florida doesn’t typically tax LLCs. Starting a Florida-based LLC will likely take you up to four weeks to complete.

This guide to starting an LLC in Florida in five easy steps will help simplify the process, from choosing your company’s name and appointing a registered agent to getting your Employer Identification Number and filing annual reports.

The first step to starting an LLC in Florida is to select a unique name for your Florida LLC. Florida has strict rules that define how you can properly name your LLC:

• Make sure you company’s name includes “LLC,” “L.L.C.” or the words “Limited Liability Company”
• Your name must be unique and not a replica of another existing name in the state registry
• Your business name may not refer to a government agency, such as the State Department, CIA, FBI, etc.
• Specific restricted words such as “bank,” “attorney,” “lawyer” or “credit union” might require additional licensure and documents to be submitted, as they suggest a specific type of certification or client relationship

If you are a licensed professional, you might opt to name your company as a professional limited liability company (or PLLC), so that “PLLC,” or “chartered” appears at the end of your professional name. You may also want to review a more extensive listing of Florida’s LLC naming requirements.

Using a Fictitious Business Name

You can register a trade name or fictitious business name as your “DBA” (“doing business as”) with the Florida Division of Corporations if you regularly use this name to conduct business. You may register your DBA online or via mail for $50, which is valid for five years in Florida.

Registering as a Foreign Business

If your LLC was formed in a different state (i.e., you’re not starting an LLC in Florida) but you wish to conduct business in Florida, then you must register this “foreign LLC” in Florida (a “domestic LLC,” on the other hand, is one that is formed within the state). The distinction, and registration, as a foreign LLC is required mostly for tax purposes.

These companies must pay a $125 filing fee before starting an LLC in Florida and must also receive a certificate of good standing from their original filing state. You would need to register if your out-of-state business has any of the following in Florida (with some exceptions, including selling goods or services through independent contractors):

• Warehouse
• Store
• Office
• Sales representative

A registered agent is authorized to receive tax forms, legal documents and service of process for your company. A registered agent may be yourself, an employee or a company that offers a service of process function on behalf of your company. They must:

• Be able to provide registered agent services
• Be able to provide services during regular business hours
• Have a physical Florida street address (PO Boxes are insufficient)

Whether to Use a Third-Party Registered Agent Service

The sole business of third-party registered agent services is to act on behalf of their business clients by fulfilling the registered agent requirement. While they can be simple to use from a “plug-and-play” perspective, and are relatively affordable for most businesses, you’ll want to make sure the annual fees and recurring costs are within your budget. Of course, as with any business service, make sure you find a reputable provider.

Determine Whether You Need To Obtain a Florida Business License

Some industries require a business license to operate prior to starting an LLC in Florida. The Department of Business and Professional Regulation licenses professionals in various sectors, such as architecture and real estate. For a more complete listing of those professions that require licensure, visit the Florida Department of State licensure links.

The most important step is filing your company’s articles of incorporation with the state’s Division of Corporations. Filing your articles of incorporation officially establishes your authority to do business as an LLC in Florida. You can complete a fillable pdf or e-file them for faster turnaround. Florida’s filing fee is $125 and this filing must include:

• The street and mailing address of your LLC’s principal place of business
• The LLC’s registered agent’s name, address and signature
• The name and address of the LLC managers
• If different from the filing date, the effective date of the LLC
• An authorized representative or member’s signature

Receive a Certificate from the State

The state will officially send you notification that your formation documents for an LLC have been officially filed and approved. This will enable you to obtain an Employer Identification Number (EIN), open a bank account for your LLC and procure business licenses for your company.

Prepare Your Operating Agreement

An operating agreement is the definition of company ownership and how your company will conduct business in Florida. Although Florida does not officially require you to prepare an operating agreement, it can be very helpful in the event a financial claim is filed against your company.

Without it, Florida will simply defer to state law rather than determine the best interests of the company to reconcile the dispute. Simply put, an LLC’s operating agreement may help to proactively clarify unstated assumptions between members to prevent any future lawsuits.

Starting an LLC in Florida means you have tax options: You can file taxes either as a pass-through entity or as a corporation. A pass-through enables an LLC to pass its tax liability through the company to your personal taxes. As such, an LLC’s gains and losses will be reported on your personal income tax (keeping in mind that Florida has no state income tax).

Otherwise, if you file taxes as a corporation, you will need to pay 15.3% in self-employment tax among other taxable fees for your employees.

You need to acquire an Employer Identification Number (EIN) for your LLC so that you can open a bank account, file for federal business taxes, obtain a loan and open a credit card account. You can apply for an EIN with the IRS.

Continue reading at Market Watch