All entrepreneurs are thinking of success when they start a business. To ensure this, you may want to have security. The act of forming a company already poses risks and challenges. That is why it is best to choose a business entity structure that provides the most protection.
Why An LLC
Perhaps the most popular structure for emerging entrepreneurs is the limited liability company (LLC). With this, you can protect your personal assets while gaining potential tax advantages. It also gives your company name credibility.
Choosing an LLC will give you the liability protection that corporations have. At the same time, you also get the ease of administration and tax treatment that partnerships enjoy. Aside from this, there are many advantages that an LLC offers. Before knowing how to form an LLC in Florida, you have to make sure you understand the structure.
· LLCs in Florida have pass-through taxation. Because of this, the owners of the company report the share of profits or losses on their individual tax returns. Thus, all taxes due will be paid at the individual level. The state will not tax your company on a corporate level. With this, filing tax returns may be fast and simple.
· It comes with flexibility. Florida does not have any restrictions on the number of owners, also known as members, in an LLC. Additionally, your company will also have the freedom to choose the management style it will use. You can either be a member-managed or manager-managed company. In a member managed LLC, all members of the LLC will have the power to make management decisions. Manager managed means that your company will hire an outsider or appoint an individual member to deal with the daily operations of the company and make management decisions.
· This business entity structure has less formalities. Since an LLC does not work like a corporation, the company is not required to hold corporate meetings, take minutes or have resolutions. However, you may want to conduct annual meetings to make sure everyone is on the same page. You may also need to set special meetings to document major decisions that will affect the business.
· Florida allows LLCs to have subsidiaries. The state does not put any restrictions.
How To Form An LLC In Florida
Forming a Florida LLC requires you to go through multiple steps. However, it does not have to be complicated. You can follow this simple guide to help you get started.
· The Importance of a Name – The name of your LLC will be the first thing that consumers will see or hear. Thus, you have to make sure it is memorable and distinguishable. Come up with something unique that can catch attention. It also needs to reflect the values of your company. Florida does not allow a company to use a name that an existing business entity currently uses. Thus, you will have to conduct a search using the website of the Division of Corporations.
Aside from the availability, you also need to make sure the name follows the naming regulations on how to form an LLC in Florida. First, your company name needs a proper LLC designator. It can be the phrase limited liability company or any of its variations. You can also choose an abbreviation, which includes LLC and L.L.C. Additionally, you cannot use a designator that makes it seem like another entity. The restricted words include corporation, incorporated, limited partnership, trust, or any variations of these,
· The State’s Point of Contact – Florida requires all LLCs to have a registered agent. It can be an individual or a business entity. The agent will receive the Service of Process on behalf of your company. It includes notices of lawsuits, summons, subpoenas, complaints, and other legal documents. You are not able to file without listing a registered agent. Florida will impose corresponding penalties that may lead to administrative dissolution.
In choosing a registered agent, make sure that they have a physical address in Florida. If you choose an individual, they have to be at least 18 years old. If you do not have an address in Florida, you can hire a commercial registered agent like DoMyLLC.
· The Necessary Paperwork – Formalizing the registration of your company requires you to file formal paperwork with the Department of State. Fill out the Articles of Organization form and submit online, in person, or by mail. The filing fee is $125 and to receive a certified copy, you must pay an extra $30. If you choose an online application, the state will take 1-2 business days to finish processing the documents. Approval of mailed documents may require 5-7 business days. Meanwhile, in-person filings will be ready within 30 minutes.
To complete the form, you will have to provide the following information:
Name of the LLC
Principal office address
The name, street address, and signature of your LLC’s registered agent
Names and addresses of all members and/or managers
The effective date
Any additional provisions
The name and signature of the organizer
After the approval of the registration, your company will receive a stamped copy of the Articles of Organization and an acknowledgment letter. If you ordered a certified copy or a Certificate of Status, the state will send them too. If you choose to file online, you can expect the state to email the documents to you. You may also download a copy of the Articles of Organization using sunbiz.org, which is part of the website of the Division of Corporations.
· Other Requirements – Your LLC will also need to obtain a Federal Tax ID Number from the IRS. It is also known as the Employer Identification Number (EIN). It is necessary for tax purposes.
Knowing how to form an LLC in Florida is the start. However, some entrepreneurs find it overwhelming. If you need help dealing with the paperwork and filing process, you can get help from DoMyLLC. Our team of experts is ready to assist you. Contact us now to find out how we can help ensure that your company complies with the state.
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