When you form an LLC, it offers a blend of benefits. Like a corporation, it provides asset protection by separating your personal liability from the company's debts. Yet, it enjoys pass-through taxation, similar to partnerships and sole proprietorships, simplifying your financial responsibilities.
LLCs are favored for their ease of management and fewer fees. They usually only require straightforward maintenance including a simple operating agreements and annual reports. Whether a single member LLC or a larger group, the flexibility and protection offered make LLCs a popular choice. For added privacy, you can also consider an anonymous LLC.
In this guide, we will cover all of the Florida LLC requirements and considerations so you can launch your business the right way.
LLCs protect the owner's assets, similar to a corporation, but they are much more flexible to run. For example, an LLC can be a single-owner business, a partnership, or a multi-member structure, and there are no limits to the number of members in an LLC.
Additionally, LLCs are able to elect taxation. This is either as a sole proprietorship/partnership or corporation. Although standard corporations have formalities and rules set by state laws, LLCs are able to create an operating agreement with their own rules.
Laws that govern an LLC can always be changed. They are either managed by members (owners) or managers who run the LLC. Members will automatically have an equal ownership interest but can own any portion based on what is set in the articles of organization. It can also be modified as needed.
In order to establish an LLC in Florida and be in good standing with the state you have to meet these requirements.
Each LLC is required to have a unique name. In the state of Florida, it must not be taken by any other LLC in the state. It also needs to be registered with the secretary of state.
The registered agent of an LLC accepts service of process. Every LLC must have a person or entity appointed in this role. They must be over the age of 18, have a legal address in the state of Florida, and be available during business hours.
Florida does not require an LLC to have an operating agreement, but it is recommended because it can help to solve arguments and protect the limited liability statute.
The articles of organization are also known as a Certificate of Organization. These are required in order to form your LLC and are issued by the state of Florida. They are also filed with the state and provide basic information about your business.
The Articles of Organization should include:
Different tax forms must be filed by the LLC in order to stay compliant with state laws. Because LLCs are automatically given pass-through taxation, the profits and losses of the business will pass through to the owners. Then, taxes will be paid out on their own personal tax returns.
LLCs are great for businesses of any size, especially because you can have one member or 300 members. If you are looking to protect your personal assets as a business owner, liability protection is second to none. LLCs are also more flexible than corporations and are the most common legal entity used to own rental and commercial property.
However, forming a corporation can be a good option if you are a business that wishes to offer public shares, or you want to reduce tax liability and avoid double taxation. Because corporate taxation is only 21%, sometimes this means less paid in taxes for certain owners.
Forming an LLC offers many benefits but, specifically, that you know you will stay in compliance with all laws. Working with a lawyer to form your LLC can help you to avoid mistakes, and enjoy the benefits that an LLC has to offer.