Form an LLC in Florida

LLC stands for “limited liability company.” An LLC is a business entity that is legally separate from its owners. The owners of an LLC are called “members.”

LLCs come in different sizes, management structures, and other variations. Here’s a comparison of some of the options entrepreneurs may choose from.

Single-Member LLC vs. Multiple-Member LLC

If a company has just one owner (or a married couple as the owner), the business is a single-member LLC. That single member has full control over the company and how it’s managed. When an LLC has two or more owners, it is a multiple-member (multi-member) LLC. Multi-member LLCs may have an unlimited number of members (unless they elect for S Corporation tax treatment, which limits ownership to 100 or fewer members). All LLC share control over their multi-member LLC, with roles, responsibilities, and profit distribution set forth in the LLC operating agreement.

Member-Managed LLC vs. Manager-Managed LLC

LLCs may choose to be member-managed or manager-managed. An LLC is member-managed when the business’s owners run the day-to-day operations and administration efforts. Rather than task the LLC owners with managing everyday details, members may identify their company as a manager-managed limited liability company. As such, they appoint someone as a manager responsible for handling daily business activities. An LLC’s manager could be someone that the company hires or one of its members.

Domestic LLC vs. Foreign LLC

When an LLC has registered its Articles of Organization in a state, it goes on record as a domestic LLC there. That state is the company’s home state (a.k.a. domicile). If an LLC registers as a domestic LLC in one state and it conducts business in another state (with either physical presence or economic nexus), typically, it must file as a foreign LLC (foreign qualify) in the additional state(s).

LLC vs. PLLC

The primary difference between an LLC and a professional limited liability company (PLLC) is that only professional license holders in certain fields (attorney, physician, accountant, architect, etc.) may form the entity. Some states do not recognize the PLLC structure but have other options for licensed professionals who want to start a business. Another difference between an LLC and PLLC is that in a PLLC, each member is shielded from personal liability for other members’ malpractice. If any member conducts malpractice in a regular LLC, all owners can be held personally liable.

LLC vs. LLP

An LLP (limited liability partnership) is like a general partnership except that an LLP is considered a separate legal entity from its owners. The business structure provides personal liability protection similar to that of a PLLC, with individual members shielded from debts of the business and any malpractice by other partners. Each owner is responsible for their own malpractice or negligence, though. Some states laws only allow certain licensed professionals to form an LLP, something significant to consider if a business might expand to multiple states in the future.

An LLC offers some legal protections to business owners, shielding their personal assets from being taken to settle debts and legal claims against the business. Another advantage is tax flexibility. LLCs are by default pass-through tax entities, with all profit and loss flowing through to the owners’ personal tax returns. However, eligible LLCs may be taxed as S Corporations to help minimize business owners’ Social Security and Medicare tax obligations

A potential drawback of the LLC is that pass-through taxation may create an unfavorable financial situation for some business owners. Because all profit and loss are taxed at the owners’ individual tax rates, the LLC structure could cost owners more in taxes — depending on their tax bracket. In some cases, the corporate tax rate (at the federal or state level) might be less than the individuals’ tax rates. It’s important for entrepreneurs to talk with a tax professional for advice on how setting up an LLC will affect their tax obligations.

Individuals, other LLCs, corporations, or foreign entities may own a limited liability company. Note that some states also allow the formation of variations on the LLC, such as PLLC (professional liability company), and those may come with restrictions on who may own them.

There are no requirements to have an attorney complete LLC formation paperwork. CorpNet saves our clients money on legal costs because we can prepare and submit your LLC forms for less than many lawyers charge for providing those services. However, entrepreneurs can greatly benefit from consulting an attorney when deciding which business entity type will be best for their business.

That will depend on several factors, such as how many owners the business has and who will manage day-to-day operations. Also, the eligibility requirements for certain types of LLCs (such as professional liability companies, a.k.a. PLLCs) may limit which kind of LLC entrepreneurs may form. That’s why it’s essential to ask for professional advice on the legal and tax aspects before deciding on a business structure.

No restrictions exist on the number of LLCs that eligible individuals or companies may set up and operate. Know that how entrepreneurs structure their multiple LLCs has legal and financial impacts, so it’s helpful to research the options carefully before forming the entities.

A single-member LLC must have a sole owner or be a married couple that is collectively considered the owner. An LLC with multiple owners is considered a multi-member LLC.

LLCs may have an unlimited number of members. The exception is if an LLC elects to be considered an S Corporation for tax purposes; then, it may have no more than 100 members.

No. An LLC is not required to have a board of directors. However, LLC members may choose to have one if they adopt that method of management in the LLC operating agreement.

Typically, an LLC that conducts business in states beyond its home state must apply for foreign qualification in those additional states. The rules for what “conducting business” means vary depending on the state. In general, the following activities require an LLC to foreign qualify:

• Having a physical presence, such as an office, retail store, or warehouse in the state.
• Having a distributor or sales representative in the state who sells the LLC’s products and services there.
• Owning property (e.g., a vehicle fleet or real estate) in the state
• Reaching a level of income or sales in the state that defines the LLC as having economic nexus there.

If an LLC will use its registered name to do business, it does not have to file that name as a DBA (doing business as). However, if the LLC’s owners want to conduct business under a different name or use another name for a particular product line or another purpose, they will have to file a DBA to get the state’s permission to use the fictitious name. For example, suppose an entrepreneur forms an LLC registered as “Josephine’s Creperie.” If Josephine wants to offer catering services under a different name, say “Josephine’s Event Catering,” she would need to file a DBA for that name.

You can search for name availability at the SunBiz.org corporation record search, or CorpNet can search and reserve the business name for you. You can reserve a business name by submitting a letter to the Secretary of State specifying the name and the name and address of the applicant. If the name is available, the Secretary will reserve the name for the applicant’s exclusive use for a period of 120 days.

• $125 for LLC formation documents
• $35 to reserve a business name
• $138.75 to file an LLC Annual Report

To file formation documents online, you can e-file Articles of Organization for a Florida Limited Liability Company on SunBiz.org.

To file the forms by mail, send to:

New Filing Section
Division of Corporations
P.O. Box 6327
Tallahassee, FL 32314

To file the forms in person, take to:

New Filing Section Division
The Centre of Tallahassee
2415 N. Monroe Street, Suite 810
Tallahassee, FL 32303

New LLCs must file Articles of Organization with the Florida Secretary of State. Existing businesses are required to file an Annual Report each year.

A Florida LLC does not need an Operating Agreement, but one is recommended. An Operating Agreement is a document that states the rights and obligations of the LLC’s members and the distribution of income. All members must sign the Operating Agreement for it to be considered effective and valid.

A Federal Tax ID number or Employer Identification Number (EIN) is not required if you operate an LLC without employees. In this case, you can use your Social Security number as a Tax ID. LLCs with employees are required to have an EIN.

Yes, you must name a registered agent as part of the LLC registration process and you must maintain one for as long as your LLC is operating.

You can name an individual (yourself or someone else) as your registered agent or a professional registered agent, such as CorpNet.

• Florida does not have a state income tax, so you are not required to register for state payroll taxes as an employer.
• You are still required to withhold federal income taxes and federal payroll taxes such as Social Security and Medicare.
• Florida LLCs filing taxes as a corporation pay a tax rate of 5.5% on taxable years after 1/1/2022.

• The Florida state general sales and use tax rate is 6%.
• Several Florida counties have a discretionary sales surtax (county tax).
• Your LLC must pay the state’s sales and use tax to the Florida Department of Revenue