Step-by-Step Guide: How to Set Up Your LLC in Florida | Expert Florida LLC Formation | BetterLegal

Are you considering setting up an LLC in Florida? BetterLegal has developed a complete yet concise guide to help you through the process through our years of experience. The five critical steps to properly set up an LLC in Florida in order are:

1. Prepare by choosing a Name and Registered Agent
2. File Certificate of Formation with the State of Florida
3. Apply for an EIN with the IRS
4. Obtain an Operating Agreement
5. Handle Ongoing Florida Compliance and Maintenance

An LLC (Limited Liability Company) is a fairly new business structure which combines the best aspects of two older structures. Corporations have existed since before the US existed, but require heavy maintenance such as quarterly meetings with officially recorded minutes, board approval and distribution of ownership, and more. On the other side of the spectrum is a sole proprietorship (or partnership if more than one person) that possesses tax benefits, but doesn't provide the owners with liability protection.

Combining the liability protection of a corporation and the tax benefits of a partnership, LLCs were created and slowly adopted by all 50 states between 1977-1998. This means that, as the owner of an LLC, you are not personally liable for any debts or obligations of the business. This can be a crucial safeguard for a sole proprietor, as transitioning to an LLC protects your personal assets, such as your home or savings, in the event that the business is sued or faces financial difficulties.

In addition to liability protection, an LLC helps establish credibility for your business. When you officially register your business as an LLC, you are signaling to the public that you are a professional and legitimate operation. This is especially important for a sole owner of a business as customers have more options than ever and are more likely to choose a company that feels more trustworthy. Any credibility you can build with your future customers is extremely important.

The first step in setting up an LLC in Florida is choosing a name for your business. The name you choose will represent your company and be used on all official documents, so it's essential to take the time to carefully consider your options.

It may seem tempting to have a very specialized name like "Irene's Florida Ice Cream." However, if you're still iterating on your business offering or may expand, a somewhat generalized name may work in your favor. Don't fret too much as you can always change a Florida LLC's name or use a nickname by filing a Florida DBA. More on those post-formation options can be found under Step 5: Changes and Maintenance.

It's important to choose a name that is unique and not already in use by another business. You can use the Florida Secretary of State's name check service to verify the availability of your desired LLC name. If you are having trouble accessing the name check service, you can also call the Florida Secretary of State.

When choosing a name for your LLC, it's important to keep the following guidelines in mind:

1) LLC name must use LLC designators ONLY (i.e., Limited Liability Company, LLC or L.L.C.)
2) Do not use or assume the name is approved until you receive a filing acknowledgment from the Division of Corporations.

NOTES:
- when checking for name availability, note that designators does NOT make the name distinguishable from a similar entity. (e.g., If there is an existing ABC Incorporated, application for ABC LLC will be REJECTED)
- The singular, plural, and possessive forms of a word are considered the same and spaces and punctuation do not constitute a difference.
- Inserting the letter/word “A”, “The”, or “and” or the ampersand symbol (&) does not constitute a difference either.
- The word “Florida”, the abbreviation “FL”, or the words “of Florida” at the end of a name do not constitute a difference either. (e.g., ABC FL LLC is considered similar to ABC LLC and the former will be absolutely rejected by the DOS)
- Names with an “INACTIVE” or “INACT” status are available.
- Names with an “ACTIVE”, “ACT”, or “INACTIVE/UA” status are not available for use.
- Names with an “INACTIVE/UA” status are being held for a specified period of time for that particular entity to reactive its filing should it decide to do so.
- The “INACTIVE/UA” status will be changed to “INACTIVE” or “INACT” when the name becomes available for use by another party.
- Names of administratively dissolved or revoked corporations, limited partnerships, limited liability limited partnerships, and limited liability companies with an “INACT/UA” status are held for a period of one year from the date of dissolution or revocation. (e.g., if ABC LLC has been administratively revoked on November 9, 2021, the name "ABC" will not be available for use until November 9, 2022)
- Names of voluntarily dissolved corporations or limited liability companies with an “INACT/UA” status are not available for use by another party for a period of 120 days from the date of dissolution. (e.g., if ABC LLC has been voluntarily dissolved on November 9, 2021, the name "ABC" will not be available for use until March 9, 2022

When choosing a name, it's also important to consider available domain names and social handles. One of our early customers owned austineventcollective.com as well as austineventcollective across every social platform. Unfortunately, someone in Florida already had a registered "Austin Event Collective LLC" and rejected her filing.

If you’re not ready to file, it is possible to reserve your Florida LLC's name before officially registering your LLC with the Florida Secretary of State. Please note that this is an additional and separate cost from officially filing your LLC and only holds the name, so you have to decide whether reserving a name for a few months is a better option than simply setting your Effective Start Date for the future (more on this in Step 2).

The next step in setting up an LLC in Florida is choosing a registered agent. This person or entity will be responsible for receiving official mail from the State of Florida and legal documents on behalf of your business.

The Registered Agent must have a physical street address in Florida. (Do not list a P.O. Box address.)

It's worth noting that this information is considered a public record and may be accessed by anyone. This means that anyone can view the names and addresses of the managers or members of your LLC by requesting a copy of your Articles of Organization from the Florida Secretary of State. If you are concerned about privacy, you may want to consider using a third party to act as a registered agent for your LLC rather than using your own personal information. This step helps protect your operator's and owner's privacy and shield your personal information from public view.

There are countless options for Registered Agent Service, but we believe BetterLegal provides the best value. Click here to sign up.

Some additional guidelines in Florida for Registered Agents:

1) The individual or legal entity that will accept service of process on behalf of the business entity is the registered agent.
2) A business entity with an active Florida filing or registration may serve as a registered agent. However, an authorized representative (individual) must be available to sign the articles of organization.
3) An entity cannot serve as its own registered agent (e.g., if you are applying for the formation of ABC LLC, ABC LLC may not be listed as its own registered agent. Otherwise, it will be automatically rejected)
4) An individual or principal associated with the business may serve as the registered agent (i.e., listed principal/manager may serve as the registered agent they are managing). For example if Mr. John Doe is listed as the manager of ABC LLC, upon the application for the formation of ABC LLC, Mr. John Doe may also be listed as ABC LLC's registered agent, as long as Mr. John Doe has an FL-based street address.
5) The individual or organization designated as registered agent must sign the document.

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Once you have chosen a name and registered agent for your LLC, you'll need to file the Articles of Organization with the Florida Secretary of State for a fee of $125 ($100 for filing fee + $25 for registered agent fee) which is non-refundable and provide a digital, scanned, or wet signature of the organizer.

Filing Options

1) Online: https://efile.sunbiz.org/llc_file.htm and complete the steps for the submission.

2) by Mail: submit to either of the following addresses and issue a check or money order for payment.

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

OR

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

Payment Options

1. Credit card (Visa, MasterCard, American Express or Discover)
2) Debit card (Visa or MasterCard logo)
- Prepaid Sunbiz account: https://efile.sunbiz.org/login.html

Turnaround Time

The turnaround time for LLC formation in Florida is advertised by the Secretary of State as seven (7) business days from the date of submission. Keep in mind that this can take longer based on state examiner’s workload at the time of filing. BetterLegal's internal experience with Florida is seven (7) business days from the date of payment receipt, as long as the filing request was received during BetterLegal's operating hours (Monday to Friday from 9 a.m. to 7 p.m. EST). However, take note that during tax and compliance season, the State of Florida takes a while to provide the approved documents due to heavy state workload. Expedited services are not available for Florida LLC formation.

Please note that the Secretary of State's office in Florida is closed on weekends and state holidays. The office is open from 8:00am to 5:00pm, Monday through Friday.

Also note, that you should not apply for an EIN (Step 3) until Florida has approved and delivered your Articles of Organization in case your LLC's name is rejected.

Setting a Future Effective Date

If you want to set a future "start date" for your LLC, this Filing Date - Exception: stated otherwise upon filing. Antedates are allowed as long as it is no more than five business days prior to the date it was filed with FL DOS. Future dates are allowed as long as it is no more than 90 days after the date it was filed with FL DOS. Tip from FL DOS: - If you are forming your LLC between October 1 and December 31st, but don’t expect to transact business until the next calendar year, avoid filing an annual report form for the upcoming calendar year by listing an effective date of January 1st. This will allow you to delay the filing of the annual report for one calendar year. (e.g., If you are submitting your application for ABC LLC on October 1, 2022, but you do not have any plans to operate until the following year, you may put January 1, 2023, as the effective date so that you will only be required to file the annual report by the year 2024). in the State of Florida.

Address Requirements

In Florida, you're required to provide Principal Office Address, Mailing Address, Registered Agent Address If you want your address information to be private rather than public record, make sure your Registered Agent allows for all addresses. BetterLegal's $90/year service provides full privacy.

State's Mailing Address: Mailing address can be the same as Principal Office Address/Registered Agent Address Can be a PO Box or PMB

Manager Information

The Manager's Information section of your LLC's Articles of Organization may include the names and addresses of the managers or members of your LLC. Here is extra information Florida will want to know about your Managers:

1) The names and street addresses of the authorized representatives or managers are optional.
2) A Manager or Authorized Representative may be an individual or business entity.
3) Do not list members.
4) Use the title AR if you are listing a person who is authorized to execute and file records with the Division of Corporations.
5) Use the title MGR if you are listing a a person designated to perform the management functions of a manager-managed limited liability company.

NOTE: If you are applying for workers’ comp exemption or opening a bank account, Florida’s Division of Workers’ Compensation and your financial institution may require this information to be designated in the Department of State’s records

Receiving your documents

After the Articles of Organization has been filed and accepted by the Florida Secretary of State, the LLC is officially formed. Here's what Florida will provide back to you based on your method of submission: By email - state will send a notification email (either approved/rejected), then you may go to FL website to download the document from here - Confirmation email is from [email protected]. Subject Line contains the word "Corporate Filing - " as well as the tracking number of the filing. - if filing has been rejected, use the Tracking Number and PIN provided in the email to correct the filing. Go to https://efile.sunbiz.org/llc_file.html to refile If you want a certified copy of your document, you need to send a request via mail. See instructions here

The official deliverables will include: the following documents:
1) Plain copy of the approved Articles of Organization of your LLC
You may also download the document from the state's entity search website accessible at http://search.sunbiz.org/Inquiry/CorporationSearch/ByName by searching for the name of your LLC.

You should keep a copy of the Articles of Organization for your records and use it to open a bank account, apply for business licenses, and conduct other business.

What if my filing is rejected?

If your filing is rejected, you'll receive information from the Florida Secretary of State explaining the reason for the rejection. You can then make the necessary corrections and resubmit your documents. Refile using https://efile.sunbiz.org/llc_file.html and use the Tracking Number and PIN provided on the rejection letter to correct any mistake.

Additional information

Florida allows backdating up to five (5) days preceding the date of filing
Note that fees are non-refundable and will be deemed abandoned 90 days after receipt of rejection.

Obtaining an Employer Identification Number (EIN) is a crucial step in starting an LLC in Florida because banks require it to open a business bank account and the IRS requires it to pay taxes. So if you plan on making money, you'll need one. You don't need to employ anyone to need an EIN, it's simply a poor name choice by the IRS for what is essentially your LLC's Social Security Number or Tax ID.

An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business for tax purposes and formatted as 12-3456789. EINs are free to get from the Internal Revenue Service's website, but can be tricky if you're not careful when answering their questions.

An EIN is a Tax ID for the federal government, it is not your Tax ID for the State of Florida.

Here are some key points to keep in mind when obtaining an EIN for your LLC:

1. A Sole Proprietorship's EIN cannot be transferred to your Florida LLC.
2. A Manager or Member must provide their personal information to link the EIN to your Florida LLC.
3. You cannot use an existing business' information for an EIN since a business doesn't have a Social Security Number.
4. If you're not a US citizen that is in possession of an SSN, you will need to first obtain an ITIN before applying for an EIN through a paper filing.
5. Once the EIN is obtained, it must be included on all federal tax returns and other documents that require the business's tax identification number.
6. Keep a copy of the EIN confirmation letter for your records.

It's important to note that the EIN is for tax purposes only and does not give any rights or privileges to the holder.

The turnaround time for an EIN is instant and the fee is $0. However, the IRS’ website that generates EINs only works normal business hours EST, so it’s a good idea to plan ahead if getting this item is time sensitive. Also note, that you should not apply for an EIN until Florida has approved and delivered your Articles of Organization in case your desired business name is rejected.

An operating agreement is an important document for any LLC, as it lays out the rights and responsibilities of the members (owners), as well as the management structure of the LLC. It's not a mandatory document filed with the State of Florida, but it's highly recommended to have notarized as it can help prevent disputes and misunderstandings among members later on.

While it's your preference to decide whether the Florida LLC is manager-managed or member-managed, BetterLegal prefers to set up LLCs as manager-managed since an individual can be both a manager and a member. If a manager/member wants to become passive at a later stage of the company and the Operating Agreement is set up as member-managed, then it opens up a can of worms that could have been avoided by retaining the separation of duties from the beginning.

Here are some key points to keep in mind when creating an Operating Agreement for your LLC:

1. Identify the members of the LLC and their respective ownership percentages.
2. Outline the decision-making procedures, such as how many members must be present for a meeting to be considered quorate and how many votes are required to pass a resolution.
3. Specify the process for admitting new members or removing existing members.
4. Include information about how profits and losses will be distributed among members.
5. Set out the procedures for amending the Operating Agreement and dissolving the Florida LLC.

This is an important document for a Florida Limited Liability Company and is too often overlooked or skimped on. If setting up a single-member LLC, be wary of professionals that charge hundreds or thousands of dollars for a single-page document. We have seen attorneys charge $3500 for a simple document providing zero ability for supporting multiple owners in the future. While you may start as a sole owner, that may not always be the case. It's best to plan ahead during these early phases before the grind of entrepreneurship sets in.

We've also seen instances where an individual helping with the business early on later claims ownership upon the business' later success. Never refer to someone paid or unpaid as a "partner" in public, especially if you don't have a signed and notarized Operating Agreement in place.

If you're setting up your Florida LLC on your own and need an Operating Agreement, BetterLegal can provide one for a reasonable fee.

The Operating Agreement should be reviewed periodically and updated to ensure that it accurately reflects the current state of the Florida LLC.

BetterLegal has helped tens of thousands of business owners across the US set up their LLC. Sign up today to start yours!

As an LLC in Florida, you'll need to comply with certain Florida regulations.

This includes, but not limited to:

1. Obtaining any necessary licenses and permits
2. Keeping records of your business's financial transactions
3. Staying on top of Florida's Annual Report
4. Notifying the State of changes to your LLC