Forming a Limited Liability Company (LLC) in Florida
The requirements for forming a limited liability company (LLC) in Florida are similar in most respects to those needed to form an LLC in any other state. The Florida LLC Act is found in Title XXXVI, Chapter 608 of the Florida Business Organizations Statutes.
The Florida Department of State’s Division of Corporations oversees formation and regulation of domestic business entities for the state.
Choosing a Name for Your LLC
The name you choose for your LLC must be able to be distinguished or told apart from any other Florida LLC or business name registered with the Florida Department of State. The name can’t have language stating or implying that it has been formed for a business purpose other than that stated in its articles, or one that is not permitted by state law. It also cannot give the impression that the LLC is connected with the federal or state government.
The LLC’s name must also contain, as the last words of the name, the words “Limited Company” or “Limited Liability Company,” or the abbreviations “L.C.” or “L.L.C.” Additionally, “Limited” may be abbreviated as “Ltd.” and “Company” may be abbreviated as “Co.”
Unlike most other states, you can’t reserve a name for your Florida LLC ahead of time. You can inquire by phone about the availability of a name by calling the state LLC filing office, or you can research LLC name availability on the Division of Corporations’ website.
Articles of Organization
Forming a limited liability company (LLC) in Florida requires filing articles of organization.
In the articles of organization, be sure to specify your LLC’s name; the name and address of all organizers; the street and mailing addresses of the LLC’s primary place of business; and the name and street address of the LLC’s registered agent, along with a statement that the agent accepts the appointment and its obligations. The articles must be signed by at least one organizer or an authorized representative of an organizer.
The articles of organization can also include other items that the members decide to specify (so long as they are not against the law), such as whether the LLC will be managed by a manager or managers.
The LLC will be considered to be perpetual (most are) unless it is otherwise specified in the articles of organization.
Your LLC is officially “organized” once an original and a copy of the articles of organization are received by the Secretary of State with the appropriate filing fee, and that office confirms that they comply with state requirements. The fee for filing is $100, plus $25 for designation of a registered agent (specified in the articles of organization), for a total of $125. Checks should be made payable to “Florida Department of State.” For an extra $30, you can get a certified copy of your articles from the LLC filing office; for another $5, you can also (or instead) request a “Certificate of Status” that certifies that your LLC is an active Florida LLC.
Registered Agent and Office
Every Florida LLC must have a registered agent in Florida who is designated to receive official state correspondence from the state, whether it’s administrative or legal. A registered agent for an LLC in Florida can be an individual resident of Florida whose business office is the same as the registered office, or an entity (foreign—i.e., formed outside the state—or domestic) which is authorized to conduct business in Florida, and whose business office is the same as the registered office.
Operating Agreement
Next to its articles of organization, the most important document for an LLC is its operating agreement, which can be amended or repealed as allowed by the agreement or applicable law. Just like a corporation’s bylaws, this isn’t mandated by the state—but it’s a key internal document that officially records how the LLC will run. It lists the members, how much each member has invested, how profits will be divided, and how much weight each member has when matters come to a vote. It may also specify requirements for meetings (notice, quorum, voting rules, etc.) and the like, but it doesn’t have to. Normally, however, the operating agreement does include state-mandated requirements.
The articles of organization can also contain limits on the members’ power to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement must be initially agreed to in writing by all of the members.
Members
An LLC must have one or more members, and each member must be an individual. To become a member, an individual normally needs to make a contribution, pay cash, or transfer property to the LLC, or assume an obligation to do so.
Member contributions to the LLC can be in cash, property, promissory notes, services previously rendered, or some other obligation to contribute cash, property, or contracts for services to be rendered.
A member can resign from an LLC, but only in accordance with the articles of organization or operating agreement; these documents also usually specify a minimum period of time a member can be a member before being allowed to resign. LLCs have the option of pursuing remedies for damages suffered by the LLC resulting from a member’s resignation.
Ongoing Requirements
LLCs in Florida must file an annual report with the Florida Secretary of State that includes the following items:
- The LLC name’s and the governmental jurisdiction under which it was organized.
- The LLC’s date of organization, or, if it’s a foreign LLC, the date on which it was admitted to do business in the state.
- The county and street address of the LLC’s registered office.
- The name of the LLC’s registered agent at that office in Florida.
- The mailing and street addresses of its primary place of business.
- The LLC's federal employer identification number (EIN) or, if it doesn’t have one, whether one has been applied for.
- The names and addresses (business, residence, or mailing) of its managing members or managers.
- Any additional information requested by the Secretary of State
In addition, all Florida LLC’s have to keep these kinds of records available for inspection at their home office:
- A list of the names and addresses of members, managers, and managing members.
- A copy of the articles of organization, any certificates of conversion, and any other documents filed with the Department of State relating to the LLC, along with executed copies of any powers of attorney by which the articles of organization or certificates were executed.
- Copies of the LLC's federal, state, and local income tax returns and reports, if any, for the past three most recent years.
- Copies of any previous operating agreements and financial statements for the preceding three years.
- The amount of cash and a description and statement of the agreed-upon value of any other property or services contributed by each member and which each member has agreed to contribute.
- The times or events that trigger any additional contributions agreed to be made by each member.
- Any events that would require the LLC to be dissolved and its affairs concluded.
In addition, it’s a good idea for your LLC to keep minutes of the proceedings and committees of the owners or members.
Dissolution
An LLC is dissolved when any one of the following events occurs:
- Event(s) requiring dissolution happen that are specified in the articles of organization or operating agreement
- Agreement to dissolve by the number or percentage of members specified in the operating agreement
- Event that makes it illegal for the LLC to continue
- When a member leaves the LLC, unless the remaining member agree to continue the LLC within 90 days, or the company continues under specifications set out in the operating agreement
- Judicial decree ordering dissolution
Taxes
An LLC offers some tax advantages over a corporation, including the availability of more deductions. Additionally, an LLC is not required to be a separate tax entity like a corporation. Instead, it can be a “pass-through entity” when it comes to taxes, so that the LLC owners report business losses or profits on their personal tax returns, in the same manner 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 and does not have to file a tax return. The IRS treats multi-owned 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, not the LLC itself.
Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's Social Security Number. In most cases, you won’t need a separate EIN for your LLC if you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC, or if the LLC has employees, the LLC will need a separate EIN to open a bank account and to meet tax filing requirements.
The LLC tax rate for Florida varies based on Florida taxable net income.
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