The reasons why entrepreneurs set up LLCs in Florida have to do not only with excellent weather conditions of the state and the advantages of this entity type but also with the possibilities of Florida itself. This subject is worth exploring in more detail if you plan to start your business in this state.
LLC Benefits in Florida
Limited liability companies have become popular among startups, as well as small and medium-sized businesses because they offer tax and legal prospects to their owners. On top of that, LLCs are easy and affordable to set up if you know how to prepare the right documents and follow the required state rules.
Let’s learn more about the opportunities you can get with an LLC:
- Privacy. An LLC provides limited liability to its owners in terms of any debts incurred by your company or most lawsuits, related to your business. Meaning that if your firm has any debts, then this problem is solved at the company level. Your personal assets, as well as movable or immovable property, are protected from any commercial losses of your LLC business;
- Flexibility in management and ownership. Thus, a single member or any other number of members can manage the LLC. Moreover, management issues can be handled by managers, who can be members or non-members, based on your operating agreement;
- No double taxation. Unlike other business structures, a limited liability company is not subject to double income tax on income from commercial activities. In this case, the income is distributed among all the members, and since an LLC is a pass-through entity, income tax is pass-through for each member of the firm. If you open an LLC with one member in Florida, you can pay taxes as a sole proprietorship, but for an LLC with multiple members, you will need to choose one of the options: to be taxed as an S-corp or a C-corp;
- Trust. As a rule, companies that use one of the LLC abbreviation options (e.g. “L.C.” or “L.L.C”) in their names are more trusted on the market. Clients and partners are more willing to turn to such businesses because they have more formalities than corporations or sole proprietorships.
Among other things, Florida provides a number of advantages that encourage people in business to develop their activities in the state. For example, this can be state programs that offer bonuses and reimbursement for startups. Thus, if you plan to work in the abandoned fields, you should know that you can receive $2,500 per workplace from the state.
There are also tax exemptions for machinery, research equipment from the space industry, and so on. The state also offers various city incentives, tax credit programs, training programs, and so on.
How to Open a Limited Liability Company
You can open an LLC on your own by submitting the Articles of Organization, which are part of the legal registration document to establish an LLC, to the Secretary of State. Simply get on Sunbiz.org and fill out the necessary form online – if you have prepared all the required information in advance, it won’t take long.
As a rule, just like in any other state, when filing in Florida, you need to choose an available business name for your LLC and appoint a registered agent, as well as determine who will run the company and more.
However, more and more business owners are choosing to outsource this process to professional services to get rid of all the registration paperwork.
Brief Registration Process
- LLC name. Create a distinguishable name for your company that has not yet been taken by any other business in the state. Otherwise, your application will be rejected by the Division of Corporations. You must choose words that fully comply with certain state regulations. This means that your chosen business name must not hint at any government agencies (unless your LLC is the one, of course). Plus, don’t forget to add the words “limited liability company” or one of the following abbreviations at the end of the name (e.g., “LLC,” “L.C.,” or “L.L.C.”). Visit this page for more information regarding LLC names. You can also search for an available name here;
- Hire a registered agent. You cannot start operating your LLC legally without an RA. Therefore, make sure you hire one and indicate the required contact information (registered office location and contact details) in the Articles of Organization. Where can you find a registered agent? Basically, you have three options to choose from – you can be your own RA, or this can be your relative, friend, or even an employee of the company. Lastly, you can hire a professional Florida RA or business formation service and have an expert handle all the paperwork for you, and receive correspondence from the state;
- Prepare Articles of Organization and pay the fee. Carefully fill out the form online and try to avoid any mistakes so that the Secretary of State does not send the document back for revision. Re-check the complete form twice (or more) and make sure you consider all the required Instructions for Articles of Organization. You can also send the form by mail. For this, you can download it in PDF and fill it out by hand. Online applications are processed much faster, though. Don’t forget to enclose your receipt (confirmation of payment) with the form when sending. The state filing fee is $125.
Note that you must also fill out the Cover Letter to accompany your Articles of Organization, which includes legal information about the LLC.
Once the Secretary of State reviews and approves your registration documents, the LLC can be considered legal and officially established. This means that you can start your business operations in the state, unless, of course, you have previously specified a different effective date in your Articles of Organization.
Note that after the registration process, your business formation is not complete, even though the company has obtained legal status. Other issues also need to be taken care of to help run your business properly. For example, you should create an operating agreement and agree on its rules and regulations with all your LLC members, get an EIN from the IRS for tax filing purposes, get the necessary permits/licenses (if needed), etc.
Even when you have all the necessary elements to manage your LLC, remember that it’s important to maintain the business in good standing with the state – track your license renewals, timely submit annual/quarterly reports, and pay your taxes. And if you approach the issue intelligently and consistently, we are sure that everything will work out for you!