How to Start an LLC in Florida (August 2024 Update)

If you’re considering starting a business in Florida, forming a limited liability company (LLC) can be an excellent way to protect your personal assets while gaining tax advantages. This business entity structure limits personal liability for business debts and allows business profits to “pass through” to the owners’ personal tax returns.

In this comprehensive guide, we’ll walk through everything you need to know to form an LLC in Florida, from choosing your business name to obtaining required licenses and permits. You’ll learn about LLC benefits and drawbacks, Florida’s specific business formation requirements, costs and fees, and key post-registration steps to operate legally and successfully.

What is an LLC?

A limited liability company is a hybrid legal structure that provides personal liability protection like a corporation while allowing income tax reporting benefits similar to a partnership or sole proprietorship. Owners, referred to as “members,” enjoy limited personal liability, so their personal assets are typically protected from business-related lawsuits and debts.

Some key advantages for Florida LLCs include:

• Flexible taxation: LLCs aren’t taxed at the business level and can choose between being taxed as a sole proprietor, partnership, S-corp or C-corp. This allows for pass-through taxation where business profits flow directly to the owners' personal tax returns.
• Less paperwork than a corporation: Corporations require more rigorous record-keeping, reporting and compliance policies than LLCs.
• Limited liability for owners: An LLC protects the owner's personal assets from business liabilities and debts. So if the business gets sued or can't pay a creditor, the owner's personal home, bank accounts, investment accounts, and other assets are typically not at risk.

That being said, forming an LLC does come with downsides:

• Self-employment taxes: LLC members must pay the full self-employment taxes contribution, currently set at 15.3% of net income.
• Difficulty raising money from investors: LLCs don't have stock shares to sell like corporations do, which can make attracting investors more challenging.

Setting up Your Florida LLC in 3 Steps

Starting an LLC in Florida involves choosing a business name, designating a registered agent, submitting your articles of organization, and paying the filing fee. Here are more details on completing those three key steps:

1. Choose an Available Business Name

First, you’ll need to pick an original name that includes the phrases “Limited Liability Company,” “L.L.C.” or “LLC” and complies with the state's naming guidelines. Check name availability by searching Florida’s online database to ensure no other active or reserved names are too similar. You can optionally reserve a name for 120 days for a $25 fee.

2. Appoint a Registered Agent

All Florida LLCs require naming a “registered agent” on file with the state – this is a person or company responsible for receiving important legal and tax documents on behalf of your business. An LLC member or a professional service can serve as your registered agent as long as they meet Florida’s requirements: the agent must have a physical street address in Florida and be available at that address during normal business hours. Using a third-party service starts around $125 per year but saves you hassle and paperwork.

3. File Your Articles of Organization

To legally form your LLC, you must file articles of organization (or a “certificate of formation”) through Florida’s Division of Corporations. This registration paperwork includes details like your business name, address, registered agent, management structure and business purpose.

Both electronic and paper filing are options with a $125 total state fee ($100 filing fee plus $25 designation of registered agent fee). Processing times vary from several days to 2 weeks. Once approved, your articles provide the legal standing to obtain licenses, financing and more.

Does an LLC Need a Business License in Florida?

Florida does not require statewide general business licenses, but many professional industries like construction, real estate, financial services and healthcare do require state-level permits and clearances. Additionally, most municipalities and counties impose their own licensing, zoning and tax regulations on businesses operating locally.

So while obtaining a “business license” may not apply universally, those forming LLCs in Florida should research whether their planned activities fall under occupational, local or state licensing board oversight. Failing to acquire mandatory licenses can void limited liability protections or open businesses up to penalties.

How Much Does It Cost to Form an LLC in Florida?

When starting a Florida LLC, filing and registration costs are very affordable, especially compared to incorporating. You can expect to spend:

• $125 for state LLC filing fees ($100 formation fee plus $25 designation of registered agent)
• $25 per name (optional name reservation for 120 days)
• $139 annual report filing fee (starts the year after forming)
• $125+ per year for a registered agent service (more if incorporating)

Additional expenses like legal/tax consulting, accounting software, business licenses and office space rent will depend on your particular LLC activities.

Key Post-Registration Tasks for Florida LLCs

After officially registering your LLC with Florida’s Division of State, several key tasks remain to legally and successfully operate your business:

• Obtain an Employer Identification Number (EIN) from the IRS for tax and banking purposes.
• Draft an operating agreement detailing member percentages, voting rights, contributions and other governance and financial rules for your LLC.
• Open a business bank account to keep your LLC finances separate and compliant. For more information, take a look at our article on the key benefits of business checking accounts.
• Assess your business activities to determine if you require occupational or local licenses for lawful operation andPersonal liability protection.
• Evaluate and acquire suitable general liability, professional liability, data breach and other business insurance policies.
• Understand your tax obligations. Florida forgoes individual and corporate income taxes but LLCs remain subject to federal income taxes, employment taxes and excise taxes. You must file annual tax returns reporting your LLC’s profits, losses, deductions and credits.
• Get legal and tax guidance from qualified professionals to ensure ongoing compliance, avoid issues during audits and minimize your tax burden.
• File a required annual report with Florida’s Division of Corporations to provide updated business details and contact information, submit $139 fee.

By tackling these post-formation steps, your Florida LLC maintains its active legal status while giving your business financial, operational and tax soundness.

Frequently Asked Questions About Starting LLCs in Florida

1. How long does it take to form an LLC in Florida?

If filing online, the state approval process usually takes 7-15 days. You can expedite processing to 3-5 days by physically bringing your articles of organization to the Tallahassee office instead of mailing them.

2. Does Florida charge state income tax for LLCs?

No, Florida does not levy individual or corporate income taxes. But LLCs still must pay applicable federal income taxes.

3. What are the steps to dissolve an LLC in Florida?

To close your LLC, voluntarily submit Articles of Dissolution paperwork and $25 fee to the Division of Corporations. Then notify your registered agent, pay off remaining debts, distribute remaining assets to members, cancel licenses/permits, close bank accounts and forward mail.

4. Is a DBA necessary for a Florida LLC?

No, using a DBA or “Doing Business As” name is optional. But if you want your LLC to legally use a name different than its official registered name, filing for a DBA only costs $50 in Florida.

5. Can I form and operate a Florida LLC without being a state resident?

Yes, Florida permits both state residents and non-residents to form LLCs. Just ensure you have a valid registered agent with a Florida physical address during business operations.

6. What are the different types of LLCs in Florida?

All LLCs registered in Florida fall into one of these classifications:

• Single-member LLCs owned by one person
• Multi-member LLCs with multiple co-owners
• Manager-managed LLCs where appointed managers oversee operations and strategy
• Member-managed LLCs run directly by all co-owners
• Professional LLCs limited to certain licensed vocations

Starting an LLC can be the right initial step that leads to growing a thriving, profitable business in Florida. Just be sure to do your homework before rushing into entrepreneurship. Arm yourself with a deep understanding of all legal requirements, management best practices, bookkeeping essentials and other topics vital for sustaining success.

And don’t hesitate to consult experienced attorneys, accountants, bankers, insurance brokers, consultants and government agencies to ensure your LLC remains compliant and optimized over time. With dedication and commitment, your Florida LLC can hopefully help drive personal and financial growth for years ahead!