How to Start an LLC in Florida in 5 Simple Steps – 2024 Guide

(Last Updated On: February 21, 2024)

Are you considering establishing an LLC in Florida but unsure about the initial steps? LLC formation can be complex, especially when dealing with state-specific regulations. Fortunately, we can guide you on how to start your LLC in the Sunshine State. Keep reading for essential information.

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Ways to Form Your Florida LLC

Now that you’ve made the choice to explore the process of establishing an LLC in Florida, let’s delve into the “how.” The process of creating an LLC can range from being quite simple to more complex, depending on your preferences. 

There are three primary approaches for filing the necessary paperwork and officially registering your LLC with the state. The first option is to handle it independently, the second involves utilizing an LLC formation service, and the third is to engage the services of a business attorney.

DIY

The most budget-friendly choice is to navigate the formation process on your own by following our detailed guide provided below. This option works well for uncomplicated businesses with just one owner (a single-member LLC) and ample time to complete the necessary filing paperwork.

LLC Formation Service

Opting for online LLC services at a modest expense is a smart move for startups. Providers like ZenBusiness, Incfile, Northwest Registered Agent, and LegalZoom LLC services offer various pricing plans, giving your business the flexibility to tailor the formation process to its needs. These services provide an array of features, including:

• A centralized dashboard for storing and accessing all essential documents
• Registered agent services eliminate the need to find your own agent
• Assistance with the EIN (Employer Identification Number) application
• Live expert support while entering the necessary information
• Tax preparation and advisory services

Additionally, some of these services even offer a money-back guarantee if you’re not satisfied with the experience or if your filing isn’t accepted by the state. This customizable approach caters to all stages of the LLC formation process and proves beneficial even for budget-conscious businesses, as the convenience outweighs the associated costs.

Hire an Attorney

Employing the services of an attorney stands as the priciest route for establishing your Florida LLC, typically ranging from $1,000 to $2,000 for basic LLC filing. Generally, this option becomes necessary for LLCs engaging in intricate contract drafting involving external investors or those opting for a more complex tax structure.

For the majority of businesses, the path of utilizing an LLC formation service proves to be the most convenient and cost-effective. Regardless of the route you deem suitable for launching your LLC, having a good grasp of the filing process and ongoing LLC maintenance will instill confidence in your decision to embark on this journey of establishing an LLC.

Create Your Florida LLC in Five Steps

Having determined that an LLC is the most suitable structure for your business and identified the optimal approach, let’s delve into the process of initiating an LLC in Florida. It’s crucial to recognize that LLCs are established and governed by state regulations. 

Therefore, when submitting the necessary documents to establish your LLC, it’s imperative to comply with all state-specific requirements. Failure to do so could result in the rejection of your LLC application by the Secretary of State.

Step 1: Choose a Name for Your Florida LLC

The initial step involves selecting a name for your LLC in Florida. There are certain restrictions outlined by Florida law, but these should not significantly limit your choices. Here are the key considerations for naming your business:

• You cannot imply a connection to a government agency like the State Department, CIA, FBI, etc
• Your name should not contain language that states or implies an unauthorized purpose (e.g., “Harry’s House of Hitmen”)
• It must include “LLC,” “L.L.C.,” or the words “Limited Liability Company” (for professional limited liability companies, it should include “PLLC” or “chartered”)
• If your name includes specific words such as “bank,” “attorney,” “lawyer,” or “credit union,” you must provide documentation of the appropriate certification or license

Crucially, your chosen name must be unique, meaning it should be distinguishable from existing businesses registered in Florida. You can perform a search in the Florida business name registry to check if your desired name is already in use.

What if you discover that your chosen name is already in use? You can modify your name by substituting words with synonyms or changing the word order to make it distinct from other registered names while maintaining the essence of your business. For instance, “Purple Fields LLC” could become “Lavender Fields LLC” or “Fields of Purple LLC.”

Things to Consider When Naming Your Florida LLC

In the past, businesses vied for names starting with “A” to secure a prominent position in the Yellow Pages, the business section of printed telephone directories. While this practice is no longer relevant, modern businesses should consider how their LLC name can impact their marketing and sales in other ways.

It’s advisable to select a name that’s not only easy to remember but also easy to spell. Potential customers might be deterred if they mistype your name in a search engine and end up elsewhere.

In addition to conducting a Florida LLC name search in the state’s registry, it’s crucial to perform a domain name search to check if a website domain name similar to your intended LLC name is available. If it is, it’s a good idea to secure it promptly. However, if your desired name is taken online, you may need to explore creative alternatives, such as “fixmyroofnow.com” or “RoofRepairTampaFlorida.com,” if you’re set on a specific branding for your LLC.

It’s vital to be aware of and avoid company names that are trademarked by other businesses. For instance, even if your name happens to be Walt Disney, you cannot register your business under that name, especially not in Florida.

Registering a Fictitious Business Name

You also have the option to register a fictitious company name that you commonly use for your business activities as a “doing business as” (DBA) name. For instance, if you’re establishing a Florida LLC for a range of home contractor services, you can register separate DBAs for distinct businesses like roof repair, tree trimming, and house painting.

Registering a Florida DBA, also known as a “trade name,” with the Florida Department of State costs $50 and remains valid for five years. You can complete this registration either online or by mail.

Here’s a helpful tip: Wondering how to utilize a DBA to avoid infringing on another company’s trademarks or brand name? For example, if you can create “McDonald’s Home Improvements, LLC,” you might also register “Up Top Roof Repair” as your DBA to steer clear of receiving a cease-and-desist letter from the well-known and trademark-protected burger chain.

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Step 2: Appoint a Registered Agent for Your Florida LLC

As part of starting an LLC in Florida, you must designate a “registered agent.” You might be wondering, “What is a registered agent?” A Florida registered agent is a person (or business) designated to receive tax forms, legal documents, and service of process for your company. 

This can be yourself, an employee, or a company that offers registered agent services. Your agent must:

• Be able to provide services during regular business hours and
• Have a physical Florida street address (not a P.O. box)

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Step 3: Prepare and File Your Articles of Organization

The pivotal step in launching an LLC in Florida involves the submission of your company’s articles of organization. Florida state law mandates that this document must encompass the following essential details:

• The physical address and mailing address of your LLC’s primary place of business
• The name, address, and signature of the LLC’s registered agent
• If your LLC is managed by designated individuals (member-managed), you should include the names and addresses of the managers
• Specify the effective date of the LLC, which can differ from the filing date. The effective date can fall within five business days before the filing date or up to 90 days after
• Include the signature of an authorized representative or member
• For foreign LLCs seeking to operate in Florida, there’s an additional requirement: the submission of a document called “Qualification of Foreign LLC,” along with a certificate of good standing from their original state of registration

You can send the relevant document along with the $125 fee to the Florida Division of Corporations in Tallahassee. Once the state approves your filing, your LLC can legally conduct business. For a faster processing time, you have the option to complete the Florida Limited Liability Company formation process online.

Receive a Certificate From the State

Upon approval of your LLC formation documents by the state, you will receive notification. This milestone allows you to acquire an Employer Identification Number (EIN), establish a bank account, and obtain the necessary business licenses for your LLC. It’s worth noting that once you file, your LLC’s address becomes part of the public record. 

If you have privacy concerns, particularly if your business operates from your home, you can opt for a virtual address for LLC correspondence to safeguard your personal address.

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Step 4: Prepare Your Operating Agreement

An LLC operating agreement in Florida serves as a blueprint for your company’s ownership structure and outlines how your business will operate. You have the option to create this agreement independently using a template or enlist the services of an LLC attorney to draft one on your behalf.

While Florida doesn’t officially mandate the preparation of an operating agreement when forming an LLC, having one in place is a crucial safeguard for protecting your personal assets in case your LLC encounters financial or legal issues. Without it, Florida law defaults to state regulations rather than considering the best interests of the company to resolve disputes.

For instance, if a member wishes to exit the LLC, the courts might order the sale of the business with the proceeds divided equally. An operating agreement can establish the roles of each member in the company’s operations and finances, including provisions for modifying this structure.

Here are some typical elements to include in your Florida LLC Operating Agreement:

• Distribution of income and debts
• Accounting and financial specifics
• Management structure
• Procedures for admitting new members
• Guidelines for transferring membership

In certain cases, LLCs are established for specific purposes or limited durations. In such instances, it’s important to ensure that your operating agreement covers the dissolution details of your LLC, such as selling or closing the business. This foresight makes the winding-down process more cost-effective and manageable.

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Step 5: Obtain an EIN for Your Florida LLC

Once your articles of organization gain approval, the next step is to secure an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number may also be referred to as a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). Regardless of the terminology, the process is straightforward, and you’ll receive a nine-digit EIN immediately upon online application. 

This nine-digit identifier serves as your business’s equivalent of a Social Security number. It plays a crucial role in identifying your LLC for tax purposes and for annual reporting to the Secretary of State.

Your EIN is essential for various business activities, including:

• Establishing a business bank account for your LLC
• Employing staff and managing payroll
• Entering into contracts with vendors and conducting other financial transactions

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Things to Consider After Starting an LLC in Florida

Now that you’ve gained insights on starting an LLC in Florida, it’s time to kickstart your new company promptly. Here are a few vital tasks to ensure the smooth operation of your Florida LLC.

Hire Employees

As your business expands and achieves greater success, the need to hire additional help becomes apparent. However, before bringing on your first employee, there are several crucial steps to take:

• Employee Handbook Creation: Developing an employee handbook serves as more than just a guideline for your employees’ roles; it also provides clarity on your expectations and the scope of their employment.

• Eligibility Verification: Ensure that your employees complete an I-9 form to confirm their authorization to work in the United States. Failing to do so can lead to legal complications for your business.

• Workers’ Compensation Insurance: It’s mandatory for all employers to carry workers’ compensation insurance, with specific coverage requirements that may vary depending on your LLC’s industry.

• Florida’s New Hire Reporting Program: As an employer, you must report new hires to the Florida Department of Revenue within 20 days of their employment. This step is essential to comply with state regulations.

Choose How You Want to File LLC Taxes

After establishing an LLC in Florida, a critical decision involves selecting the tax classification. Your options include filing taxes as an LLC pass-through entity, an “S-corp,” or a “C-corp.”

Opting for pass-through status allows the LLC to pass its tax responsibilities to its members’ individual tax returns at both the state and federal levels. This means that the LLC itself isn’t taxed as a separate entity; instead, the owners report gains and losses on their personal income tax returns. While this has a limited impact on federal tax liability, it can be advantageous at the state level since Florida does not impose state income taxes.

In the case of an S-corp, income also passes through to the members but is divided between dividends and salary, which is paid to members as employees. This structure can help minimize the taxes that the LLC would typically incur.

Alternatively, if you choose to file taxes as a C-corp, you will be subject to a 5.5% corporate income tax in Florida in addition to federal taxes. However, both S-corps and C-corps have access to various tax reduction strategies that are not available to LLCs. One such strategy involves categorizing members as employees and deducting their wages from the company’s profits. 

This can lead to a reduction in the overall tax liability of the company while allowing members to avoid paying state tax on the LLC’s profits.

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Special Licenses and Permits

Certain industries may necessitate additional licenses or permits for your LLC in Florida. It’s highly advisable to ensure that all of these requirements are met before commencing the process of establishing your LLC in the state. Notably, Florida mandates most businesses to obtain a Business Tax Receipt before conducting operations within the state.

In Florida, there are two primary agencies responsible for licensing, each covering a diverse array of professions and businesses. The Department of Business and Professional Regulation (DBPR) is responsible for issuing licenses for various occupations, including alcohol retailers, barbers, veterinarians, building inspectors, and many more. 

On the other hand, the Department of Agriculture and Consumer Services (DACS) oversees licenses for entities such as pawn shops, livestock markets, private investigators, and numerous others.

In addition to these central agencies, Florida also has several smaller, specialized licensing bodies. If you’re uncertain about whether your business requires specific licensure, consulting the state agency directory is a prudent step.

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Annual Reporting Requirements for Florida LLCs

To maintain your active LLC status in Florida, it’s essential to e-file an annual report with the Division of Corporations. This report typically incurs a fee of approximately $130 and is due between January 1st and May 1st each year, following the calendar year when your Florida LLC Articles of Organization became effective. 

Filing the annual report after this period results in a late fee of $400. Failure to submit it before the third week of September of that year can lead to administrative dissolution, which means the loss of your LLC’s ability to operate in Florida.

The annual report does not require detailed financial information. Instead, its purpose is to confirm that your Florida LLC is actively operating and in compliance with the state’s regulations. When submitting the report, you will need to provide the following information:

• Your unique 6- or 12-digit document number
• The entity’s name
• Federal Employer Identification Number (EIN)
• Principal place of business address
• Mailing address
• Name, address, and signature of the registered agent
• Names and addresses of principals (officers, directors, managers, etc.)

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Best LLC Formation Services

LLC formation services are specialized services offered by individuals or companies to assist entrepreneurs and businesses in the establishment of a Limited Liability Company (LLC). These services generally involve the preparation and submission of essential paperwork to the state, offering advice on legal and regulatory obligations, and aiding in the overall setup of the LLC. 

Utilizing these services can simplify the formation process, save valuable time, and ensure strict adherence to state laws and regulations.

ZenBusiness

ZenBusiness is an online service focused on facilitating LLC formation, catering to entrepreneurs and small business owners. They offer comprehensive packages that are both affordable and inclusive, covering aspects like registered agent services and annual report filing. ZenBusiness also extends ongoing support and resources to assist businesses in maintaining compliance and achieving success.

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Swyft Filings

Swyft Filings specializes in the swift and straightforward formation of LLCs. Their array of services spans LLC incorporation, compliance, and registered agent services. Swyft Filings stands out by providing personalized assistance to guide businesses through the LLC formation process and ensure adherence to state and federal regulations.

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Tailor Brands

Tailor Brands, on the other hand, is an online branding and design service. Their primary focus is on helping businesses establish a polished and unified brand identity. This service encompasses various branding packages, such as logo design, business cards, and social media branding. Tailor Brands also offers a suite of design tools and resources for businesses to create and tailor their branded assets to their unique needs.

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What Is an LLC?

An LLC, short for “Limited Liability Company,” represents a legal entity formed for the purpose of conducting business. LLCs are considered hybrid entities, combining the pass-through tax advantages of sole proprietorships or partnerships with the liability protection typically associated with corporations.

Many new business owners favor the LLC structure because it allows profits to pass through to the owners on a personal level, preventing double taxation of profits as both corporate income and personal income upon distribution.

Let’s explore some of the advantages and disadvantages of forming an LLC in Florida:

Pros

• Taxation flexibility
• Streamlined paperwork compared to C-corporations
• No limit on the number of members
• Flow-through taxation prevents double taxation of profits
• Limited liability protection for members

Cons

• Restrictions on members’ ability to pay themselves wages without S-corporation election
• Annual renewal fees
• Potential for franchise tax
• Limited access to capital for business growth

Is an LLC the Best Fit for My Business?

Before delving into the process of starting an LLC in Florida, it’s important to ensure that the LLC structure is the most suitable entity type for your Florida-based business. Whether you’re already operating as a sole proprietorship or embarking on your entrepreneurial journey, understanding the various popular business entity structures can help you make an informed choice.

Here are the key business entity structures to consider:

Sole Proprietorships and General Partnerships: These business associations do not require formal registration with the state. However, you may still need permits or licenses for specific business activities. In these structures, business owners assume all business liabilities, and the income generated by the business is treated as the personal income of the owners.

Corporations: Corporations are entities formed through the filing of official documentation with the Secretary of State, often identified by the suffix “Inc.” or “Incorporated.” Corporations are distinct legal entities separate from their owners (shareholders), which shields owners from personal liability for business-related matters. However, corporate income is subject to double taxation—once at the corporate level and again when distributed to shareholders.

Limited Liability Companies (LLCs): LLCs are designed as a middle ground among sole proprietorships, partnerships, and corporations. They offer liability protection similar to corporations while adopting the income taxation structure of sole proprietorships and partnerships. In Florida, you can establish either a single-member LLC (resembling a sole proprietorship) or a multi-member LLC (similar to a partnership).

Liability Explained: To illustrate, consider Regina, who operates an orange-selling business at a local farmer’s market in downtown Tampa. A customer becomes severely ill after consuming one of Regina’s oranges and sues her for $175,000, ultimately winning the case. Regina’s home is valued at $250,000, and her orange business is worth $50,000.

If Regina’s business is structured as a sole proprietorship or partnership, the customer can target Regina’s orange business for $50,000 and seize her personal assets (her home) to cover the remaining lawsuit award.

However, if Regina’s business is structured as an LLC, the customer can only pursue Regina’s orange business for $50,000, and her personal assets would remain protected from any further claims related to the lawsuit.

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How to Start an LLC in Florida – Frequently Asked Questions

Are There Florida Business Taxes I Need to Pay?

Certainly, in certain situations, registration is required. If you’re involved in selling products and need to gather sales tax or employ individuals, you must complete registration with the Florida Department of Revenue (DOR). When it comes to state tax obligations, you have the option to register digitally or via paper using Form DR-1, the Florida Business Tax Application. 

Read more: Cost to Start an LLC

Can a Foreign LLC Do Business in Florida?

Foreign LLCs must register with the Florida Division of Corporations to operate in Florida. They need a Florida-based registered agent for legal purposes. To register, they file a “Qualification of Foreign LLC” with the Florida Department of State Division of Corporations. Include a “Certificate of Existence” from their home state dated within 90 days of filing, along with a $125 fee. 

Before filing, ensure the chosen LLC name is available in Florida by checking the state’s business name database. If it’s taken, the foreign LLC must pick an alternate name and provide a signed consent or resolution from its managers or managing members authorizing its use.

How Do I Dissolve My LLC in Florida When I’m Done?

When the time comes to shut down your business and cease all activities, it’s crucial to follow the proper procedures for dissolving your LLC. This ensures that you limit your liability for potential lawsuits and government fees. Familiarize yourself with the necessary steps to take in this process.

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