Whether you are launching a new company right out of college, or starting a business in retirement, the state of Florida is brimming with opportunity. The Sunshine State is well known for its favorable business climate, offering several tax advantages, profit flexibility, and fewer fees than in other states. Still, there are a few unique bylaws you need to know. Here’s how to form your Florida LLC.
The first step in forming a new LLC in Florida is to create and file your LLC name. This name must be recognizably different from any other business name registered in Florida. You can call and ask about the availability of a name by calling the state LLC filing office, or you can research LLC name availability on the Florida Division of Corporations’ website. However, Florida does not allow you to reserve a prospective name ahead of time.
There are a few additional rules for naming your new Florida LLC:
Now that you have a name for your Florida LLC, Incfile can help you file your articles of organization with the Florida Department of State’s Division of Corporations. The articles of organization must state:
Florida LLCs must have a registered agent living in Florida who can receive official correspondence from the state, both administrative and legal. A registered agent for a Florida LLC can be an individual resident of Florida whose business office is the same as the registered office, or a business entity (foreign or domestic) that can conduct business in Florida, and whose business office is the same as the registered office.
Incfile can provide registered agent service for your Florida LLC, if needed.
The new LLC is recognized as “organized” once the articles of organization and a copy are delivered to the Secretary of State’s office with the required filing fee, and that office confirms that they are in order. Your LLC is not a legal business entity until the state of Florida has filed the company.
The filing fee is $125, and checks should be made payable to the Florida Department of State. For additional fees, you can get a certified copy of your articles from the LLC filing office, and a Certificate of Status that certifies that your LLC has an active status. The LLC will be presumed to be perpetual in duration unless otherwise stated in the articles of organization.
After its articles of organization, the LLC’s most vital document is the operating agreement, which can be amended or repealed as specified by either the agreement itself or applicable law. Just like a corporation’s bylaws, the operating agreement isn’t required by state law, but it’s a critical internal document that officially sets out how the LLC will operate. An LLC’s operating agreement should list:
The articles of organization can also include constraints on members’ authority to adopt, amend, or repeal an operating agreement. If there is more than one member when the LLC is formed, the initial operating agreement must be approved in writing by all members.
Florida LLCs must have one or more members, all of whom are individuals (not business entities). To become a member, one normally needs to make some kind of contribution, pay cash, or transfer property to the LLC, or take on an obligation to do so.
Member contributions to the LLC can be in cash, property, promissory notes, services already or to be rendered, or some other obligation to contribute cash, property, or contracts for services.
A member can resign from an LLC so long as he or she follows the procedures listed in the articles of organization or the operating agreement, which also usually specify a minimum amount of time before a member is allowed to resign. LLCs have the option of pursuing remedies for damages to the LLC caused by a member’s resignation.
There are several filing and record-keeping tasks that LLCs owners in Florida need to remember to do. Florida LLCs must file a report annually with the Florida Secretary of State that specifies the following:
When you work with Incfile, we will send you courtesy email reminders at the approach of due dates for Florida’s ongoing requirements.
Taxes are another ongoing issue for LLC owners. LLCs do offer tax advantages over a corporation, such as the availability of more deductions. Additionally, an LLC does not have to be a separate tax entity in the same way as a corporation. Instead, it can be a “pass-through” entity for tax purposes, so that the LLC owners report business losses or profits on their personal tax returns, in the same way as a partnership.
Unless you choose for your LLC to be taxed as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes on its own account and does not have to file a tax return.
The IRS treats multiple-member LLCs as partnerships for tax purposes, unless you choose for your LLC to be taxed as a corporation. The result of this is that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, rather than the LLC itself.
The LLC tax rate for Florida varies based on taxable net income.
A Florida LLC is considered dissolved when any one of these events occur:
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