learning how to set up an LLC in Florida

How to Set Up a Florida LLC for Your Small Business (Without Mistakes or Delays)

The day you set up a limited liability company (LLC) is like your business’s first birthday. It’s big enough to stand on its own, growing bigger by the day, and facing challenges it’s never met before. However, mistakes lurk around each corner of LLC formation in Florida, so we’re here to help you get it right the first time.

What Are Some Benefits of an LLC in Florida?

There are many advantages to establishing your small business as an LLC. Many are financial, such as tax deductions and business incentives, that can help your company grow.

When you create an LLC in Florida, you are:

  • Limiting your liability as a company owner
  • Protecting yourself and other LLC members against creditor claims or lawsuits
  • Taking advantage of state and federal tax exemptions

When safeguarding your business, prevention is always better than a cure. Having the correct documentation in place early—and updating it often—is the best way to reduce risks and protect your personal and business assets

What Steps Should I Take to Create an LLC in Florida?

Every state has its own requirements for forming an LLC. In Florida, business owners can either print and mail their forms and payments to the Division of Corporations or file online. The filing process involves numerous documents, costs, and organizations, and some steps must be completed before others. The steps below offer a streamlined way to start your new LLC:

1. Choose a Name for Your LLC

Before settling on a name for your limited liability company, check to see if it conforms to Florida LLC naming requirements. For example, your name must contain the words “limited liability company” or the abbreviation “LLC” and be different from the names of all other entities or filings on record. There are also naming restrictions based on the type of business you run. If the name of your LLC is available and unique, move on to the next step.

You might see that the name you’re considering is “inactive” or “INACT”. If so, you’ll want to be careful about using that name again. Among other reasons, the Division of Corporations might want you pay a reinstatement fee (expensive!) to use that name again.

Pro Tip: Check whether the URL for your company’s name is available before settling on the name of your LLC. This minimizes brand confusion and makes it easy for customers to find your website.

2. Select a Registered Agent

All Florida LLCs need a registered agent who receives tax forms, legal documents, lawsuit notifications, government notices, and other correspondence on the LLC’s behalf. Your registered agent can be an individual (such as yourself, an employee, or a member of your LLC) or a business entity that provides a registered agent service.

All registered agents must:

  • Be full-time residents of Florida (or a corporation authorized to conduct business in the state of Florida);
  • Have a mailing address in Florida;
  • Be onsite and able to accept documents during regular business hours.

3. File Articles of Organization

When forming an LLC in Florida, you must create and file its articles of organization with the Florida Division of Corporations. Once your articles of organization are approved, your LLC becomes a legal entity in the state.

Articles of organization for your Florida LLC should include the following:

  • The name of your LLC
  • Your principal place of business
  • Your business mailing address
  • The name of your registered agent
  • The management structure of your LLC
  • Date when the LLC’s Articles of Organization become effective
  • The duration of your LLC
  • The purpose of your LLC
  • Names and addresses of the people responsible for filing the articles of organization
  • Signatures from the applicant and registered agent

Pro Tip: It can take a few days for your LLC’s formation documents to be approved, so it’s a good idea to create your operating agreement while you’re waiting.

4. Prepare an LLC Operating Agreement

An operating agreement is a document containing the rules and procedures of your LLC. While not required by law, an operating agreement is essential in establishing your business’s internal structure, management, and policies. Failing to create an operating agreement is one of the most common (and costly) mistakes startups make.

Your operating agreement might include:

  • The LLC’s name, address, and date of formation
  • Names and addresses of all members (owners) and the registered agent of the LLC
  • Each member’s ownership percentage or interest in the LLC
  • Each member’s voting rights and profit share
  • Roles and responsibilities of members and managers
  • Division of profits and losses among members
  • Frequency and conditions for distributing profits to members
  • How new members can be admitted
  • How existing members can transfer or sell their ownership interests
  • Member contributions and terms of funding the LLC
  • Non-compete and confidentiality agreements
  • Terms of dispute resolution

If you choose not to draft your own, customized LLC Operating Agreement, don’t worry, you can always proceed with the statute as your operating agreement. 

Pro Tip: Your operating agreement should be customized to your company’s needs, highly detailed, and compliant with state laws. Our business succession planning team can help take the stress out of this task and secure the future of your LLC.

5. Register for an EIN

Once you receive your LLC certification letter from the State of Florida, you can register for a Federal Employer Identification Number (EIN). An EIN is a nine-digit unique identifier the IRS uses, like your business’s Social Security Number. 

An EIN allows you to:

  • Create legal documents for your company without using your SSN
  • File state and federal taxes
  • Obtain Florida licenses and permits needed to do business
  • Open a business bank account
  • Hire employees

Pro Tip: You’ll need an EIN to complete the following steps, so make sure you meet all filing requirements and respond promptly to any requests for information.

6. Apply for Licenses

Some Florida companies can only legally operate with the proper licenses and certifications, even if they are sole proprietors or working out of their homes. Requirements vary by location, profession, and industry, but standard licenses include: 

  • Professional licenses
  • Licenses for federally-regulated sectors (such as broadcasting or agriculture)
  • State business licenses
  • Local business license (such as city and county business tax receipts) 

If your business begins operations without the necessary licenses, you could be forced to close your doors until you meet all the requirements. In addition to delays and damage to your reputation, failing to secure documentation could lead to fines and legal trouble.

Pro Tip: To avoid tax problems, now is also an excellent time to complete IRS Form 8832 (Entity Classification Form).

7. Set Up Your Business Finances

Florida LLCs must have a bank account in the state before they can conduct business. Use your EIN to open a separate bank account for your LLC or apply for a business credit card, and only use these accounts to pay business-related costs. Consider seeing an accountant or setting up accounting software to track your company’s profits and expenses. These measures help you keep track of growth and prevent you from blending your business and personal finances.

8. Meet Your Obligations to Your Employees

If your LLC has employees, you must comply with these employer obligations:

  • Report all employee hires within 20 days to the Florida Department of Revenue
  • Purchase workers’ compensation insurance as soon as a fourth employee is hired
  • Pay unemployment taxes

9. File an Annual Report

All Florida LLCs must file a document listing any changes in business information or operations in the past year, known as an annual report. If the annual report is not filed, your LLC will lose its “active” status and could be administratively dissolved or revoked.

Florida LLCs must file their annual report with the Florida Division of Corporations between January 1st and May 1st. The first report is due the year after formation and costs $138.75 to renew the LLC with the State.

Steps to Take After Forming Your LLC

Once you’ve met the legal requirements for forming an LLC, there are a few more smart steps that can help you strengthen your budding business, such as:

We Help Prevent Small Business Problems During LLC Formation

Even the most savvy entrepreneurs can make mistakes when forming a new business entity. The best way to avoid expensive errors is to get advice from a corporate lawyer with experience in business formation, dissolution, and succession. Email Yolofsky Law today or schedule a 15-minute call to see how we can help protect your company now and in the future.