Latest news

How to Form an LLC in Florida

No comments

Are you thumbing through the internet to know how to form an LLC in Florida?

You’ve come to the right place. Starting a business in the Sunshine State is a dream for almost everyone. Carrying a lot of advantages and potential for the small business owners, Florida has become a go-to option for business owners. Additionally, Florida dominates as a nation in the new business formation category; according to the State of Florida Division of Corporations this is why so many business owners are questioning how to form an LLC in Florida?

Though, California is also preferred by business owners but the Golden State comes with a lot of difficulties in formation of business. On the other hand, the State of Florida Division of Corporations determined that business owners are interested in knowing how to form an LLC in Florida merely because of the countless advantages and ease of starting up the State of Florida offers unlike California. If you wish to explore the advantages and wish to discover how to form an LLC in Florida, then read this blog carefully.

If you need help registering an LLC in Florida, call us at 407-344-1012, or email us at info@freedomtaxfl.com.

What is a Limited Liability Company (LLC)?

If you want to know how to form an LLC in Florida, then you should first understand what a limited liability company (LLC) is. A limited liability company is where the members of the company are not held liable for the company’s liabilities and debts. These types of companies are hybrid entities combining the characteristics of a partnership business, sole proprietorship business and corporation. These companies have features similar to that of a corporation i.e. limited liability and a feature of partnership i.e. flow-through taxation to the members of limited liability companies.

If you want to understand the process of how to form an LLC in Florida, then you should first understand that it has several advantages and attractive benefits and features in relation to the structure of the corporation. Business owners who are asking how to form an LLC in Florida should keep in mind that one of the top primary reasons of forming an LLC in Florida is to enjoy the protection from unlimited liability.

Limited liability companies are secured and limited from principle’s personal liability. Though the Limited Liability companies are a blend of corporation and partnership, it is a more formal type of partnership that requires articles of organization for filing to the state. In addition to the format system, a limited liability company is quite easier to form than a corporation as it has flexibility in formation along with the protection.

But those who are trying to explore how to form an LLC in Florida should know that creditors may want to pierce the corporate veil of the limited liability company if the company does not meet the legal and reporting requirements or is fraudulent in its dealings with them.

Besides, the entire process of formation is a bit technical, but once you get through it you will enjoy the benefits and income in the long run. That being said, a limited liability company separates the business assets from the personal assets of the owner, which basically separates them from the debts and liabilities of the business.

This is the slight difference between a partnership business and a limited liability company, but they do have similarities too. The function that is similar to partnership is that the tax returns pass through the profits of the company while the losses can be used to counterbalance the income but up to a certain amount of investment. To fully understand how to form an LLC in Florida, you should also keep in mind that the transfer and/or sale of the business is actually the only way for the smooth transfer of interests in the continuation agreement when the owner dies or leaves the business.

LLC Operating Agreement

If you want to learn more about the core of the question how to form an LLC in Florida, then you must understand that the Limited Liability Company requires an LLC Operating Agreement. This is the main document for the formation of the Limited Liability Company. It is a document that outlines the terms and conditions of the business according to the specific needs of the business owner along with the functional and financial decision making in a structured process. Those who want to know how to form an LLC in Florida should also know what to write in Operating Agreement.

When writing an Operating Agreement you need to ensure it lays down all the terms and conditions of the limited liability company. Also, it should clearly mention and define the meanings of the terms. The members of the company should also sign the operating agreement acting as binding owners for the set of rules to follow. In the absence of this document your business will have to follow the default rules. These are the rules set by the government of the Florida state.

So, people trying to know how to form an LLC in Florida should also bear in mind that making this document is extremely important or else they will have to follow the set of rules laid out by the government. Business owners asking how to form an LLC in Florida may want to work in their own way. Therefore, forming an operating agreement for the Limited Liability Company would help them operate their business in the way they want. Customize the rules and laws in this agreement and run the business your own way.

Additionally, this contract is basically comprised of 10 to 20 pages setting up rules and guidelines for the Limited Liability Company. To know the answer to the question how to form an LLC in Florida, you should also understand that Delaware, Maine, California, New York and Missouri make it mandatory to write this agreement. But Florida State has not made this requirement necessary. However, it is wise to have this contract as it secures the status of the company, helps you carrying out laws and functions as per your choice, comes in handy in times of misunderstandings, and much more. The generic or default rules may make the job easier for you but they may not always be suitable for your business, therefore it is better to have your own rules by generating this operating agreement.

If you need help registering an LLC in Florida, call us at 407-344-1012, or email us at info@freedomtaxfl.com.

How to Form an LLC in Florida? – Exploring the Procedure

Let’s move on to the procedure of how to form an LLC in Florida. This section will carefully detail out everything you need to know about setting up an LLC in Florida. Forming a Limited Liability company in Florida is a great choice, if you are looking for reduced tax liability, flexible tax management structures, and of course limited liability for your members and managers. Also, according to the federal government, Florida is one of the best states for forming a business. If you wish to know how to form an LLC in Florida, then you will have to plan out your business properly, complete the tax requirements, file the relevant documents with the Department of State, and maintain the annual reporting.

We will be exploring the answer to the question how to form an LLC in Florida in detail below.

·       Step # 1: Understanding Limited Liability Structure

To form an LLC in Florida you first need to understand what a limited liability structure is. A limited liability company is actually a hybrid business having all the positive aspects of the business structure. Having the LLC, you will get to enjoy the flexibility of partnership and tax efficiency of the corporation.

Moreover, the limited liability structure will permit you to have all the positive aspects including the ease of sharing profits and losses, limited liability, and the convenience of record-keeping. Along with these positive aspects, there is only one drawback, the owners or partners have to pay the taxes on their own.

·       Step # 2: Creating Structure For Your Business

Thinking of how to form an LLC in Florida, you should know the structure you wish to create for your business. By creating a structure we mean that you have to decide whether your limited liability company will be managed by managers or by members. Members are actually the owners of the company.

To know how to form an LLC in Florida you must first understand that it is essential to write in the Articles of Association about the structure of your business. If you do not mention or specify it, the law will assume that your company is managed by members or partners of the Limited Liability Company.

If you are willing to explore how to form an LLC in Florida, you also need to understand that a Limited Liability Company managed by members is the company where the members are permitted to make decisions and have the management authority of running the day to day operations of the business.

According to experts, this is a great option so if you are willing to start an LLC and asking how to form an LLC in Florida, then you should opt for member managed LLC as it does not require any separate management levels and everyone is given equal authority. On the contrary, when the company is managed by managers, only the managers are permitted to decide the day to day tasks and operations while the members have no authority to decide but only look over the workings of the managers and be passive investors.

·       Step # 3: Choose a Name for Your Business and Principal Office

If you are interested to know how to form an LLC in Florida then choosing a name for your business is one of the most important requirements. Do some research and then choose a legal and appropriate name for your limited liability company. The name of the company should be decided by checking the Department of State so that there are no clashes in the business name.

Additionally, you will have to add Limited Liability Company, ltd., or LLC in the end of the name. When you are done choosing a name, it is time to designate a head office to include in the Articles of Association to prove its existence with the street address and mailing address.

·       Step 4: Find a Registered Agent and Draft Articles of Association

If you wish to know how to form an LLC in Florida, then keep in mind that you would require a registered agent by law in Florida. Without a registered agent in Florida, you will not be able to form your business smoothly. They must be an individual or an entity residing in Florida only. Also, they must have a proper street address i.e. office in Florida to receive and send the notices, proceeds, and conduct processes for the company.

Once you found a credible registered agent, it is time to draft Articles of Association. In this document, your registered agent will help you in writing the name of the business, mailing address of the office, address and name of the registered agent themselves and other important company information. When you are done writing it, you need to get it signed by at least one person who is acting as the authorized representative for your Limited Liability Company. Normally, the representative is the registered agent only so you can get it signed by them.

·       Step # 5: Deliver Documents and Pay Filing Fee

Once the documents are completed, you can deliver it. Also, you will have to pay filing fee for the Articles of Association. If you wish to form an LLC in Florida, then you should remember that you will have to pay $100 as a filing fee for the certificate and $25 to the registered agent, which sums up to $125 to properly deliver the documents. All those concerned about how to form an LLC in Florida, can be happy on the day of filing, because once they file the documents, the same day their Limited Liability Company will be formed.

If you do not wish to deliver the documents by mail, you can do it via electronic filing. You can access the Florida’s Department of State using the electronic filing to form an LLC online. This process saves time and helps you forming Limited Liability Company earlier and quickly.

This electronic filing system is also simple as you just have to get started by clicking one button and fill the information and pay the fee, $125 via credit card. Those who are worried how to form an LLC in Florida via electronic filing should understand that once the forms are approved; their LLC will be formed online. Many people form Limited Liability companies online only.

If you need help registering an LLC in Florida, call us at 407-344-1012, or email us at info@freedomtaxfl.com.

Benefits of Forming an LLC in Florida

Now that you have explored how to form an LLC in Florida, you may be preparing to take actions. But before you take the plunge, you should also explore the benefits too. Though, we have discussed the advantages throughout the blog briefly, but those who wanted to know how to form an LLC in Florida, should read this section carefully to explore the benefits of the process in detail.

Forming a Limited Liability Company will help you enjoy several benefits which are listed below.

·       Liability Protection

The first and foremost benefit to forming a Limited Liability Company in Florida is the liability protection. As the name determines, the company’s member will get to enjoy the limited liability of the company and they will not have to suffer the losses paying out the company’s debts and liabilities by selling their own assets in case of a default. This form of company basically separates the business and personal assets right in the beginning not including any of them, hence securing the assets.

According to the LLC law of Florida, the members and managers of Limited Liability Company (LLC) are not liable to pay for the debts and obligations of the company, no matter even if the proceeds and judgments have been made against the LLC.

·       Tax Benefits

In addition to liability protection, Limited Liability Companies also have tax benefits on federal level. It is free from taxation. So, those who are concerned about how to form an LLC in Florida would be glad to know that they need not require paying much tax on individual income. This is because the Internal Revenue Service treats Limited Liability Companies as a disregarded entity for the tax purposes. Moreover, Florida ranks 5th in overall low tax climate for the businesses.

·       Flexibility and Fewer Formalities

The Limited Liability companies have no restrictions on the number of members that is why there is flexibility in the structure of Limited Liability Company’s management. Along with this, they can also select different types of profits giving room for more flexibility. Additionally, there are very less formalities as the LLC does not require any resolutions or corporate minutes, hence making it easier for business owners to manage.

Now that you know how to form an LLC in Florida, we hope you will this blog helpful to starting your own LLCC in Florida.

If you need help registering an LLC in Florida, call us at 407-344-1012, or email us at info@freedomtaxfl.com.

Robert AcevedoHow to Form an LLC in Florida

Leave a Reply

Your email address will not be published. Required fields are marked *