How to Start a Florida LLC: A Quick Guide
Start a Florida LLC today with information from our latest article and tips to form your company.
Introduction: What is an LLC?
An LLC is the abbreviation for the term “Limited Liability Company.” LLCs are a type of business entity that can provide protection for personal assets. LLCs are formed by filing articles of organization with your state and providing a name for your business. At least one member of the LLC called a “member,” must be an individual or another LLC. The members can then transfer ownership interests to other members or third parties. An LLC does not issue shares and it only needs one member to stay in good standing with the state and federal governments.
An LLC is taxed through individuals, and those who own an interest in the company are called members, not shareholders. Members take part in decisions relevant to how the company operates, and also have the right to collect profits through dividends.
What You Need to Start a Florida LLC
Knowing the process of forming an LLC is important for many reasons. The first reason is that it is a legal entity and, like any other business entity, it has different requirements and tax considerations. You’ll need to have at least one member and file Articles of Organization with the Florida Division of Corporations to form your LLC. Qualifying LLC members are US citizens, non-US citizens, legal immigrants, non-corporate legal entities, and even an Individual Retirement Account, or IRA.
The process usually takes some time and the cost depends on whether you self-file, hire an attorney or tax professional, or use our online LLC formation and incorporation services. Many attorneys and accountants offer LLC formation, but they generally charge more for their services. If you are forming a company for a complex business, we do recommend consulting either an accountant or business and tax attorney for the best formation strategy.
Florida State Startup Guide To Start Your LLC
Starting a business in Florida doesn’t have to be expensive and time-consuming. We have developed a Florida LLC formation checklist that includes links to programs and resources to make it easier and faster for entrepreneurs to start their own businesses. These include:
Florida Small Business Administration: Find local assistance for business guidance, funding, and small business education.
Florida Small Business Development Center: Additional assistance with funding, marketing, accounting, legal services, and more.
Florida Department of Environmental Protection Sustainable Initiative Programs: Find incentives offered to protect the environment in The Sunshine State.
In addition to these organizations, a quick Google search for “free Florida small business resources” returns a bunch of resources to support your LLC startup.
A Few Pros and Cons of Starting a Florida LLC
Before you start with a Florida LLC formation, there are some things to consider. To make sure the Sunshine State is the right place to form your LLC, read the pros and cons below.
Florida LLC Pros
- Beyond the initial business formation, managing an LLC is usually less expensive than a Corporation.
- You can keep your personal assets safe by limiting your liability with the LLC business structure.
- Florida’s business environment is generally favorable toward startups and small businesses.
Florida LLC Cons
- Single-Member LLCs have limited liability protection because their money is the company’s sole funding source.
- Foreign-Qualified Florida LLCs that don’t have a significant footprint in the state reap fewer benefits than businesses that are based in Florida.
- LLC taxation is recorded on individual member(s) tax returns and taxes must be paid on profits when they are earned, unlike Corporations that pay taxes through the business and owners only pay taxes when they withdraw profits.
Other Important Considerations for a Successful Florida Business Startup
We’ve covered the basics of Florida LLC formation, but there are a few important steps to take before you actually form your company.
- Have a solid idea of startup and ongoing costs for rent, labor, goods and services, and some money in the bank to cover those costs until you’re profitable. Find out here how to manage a multi-million dollar business with a spreadsheet. Every successful startup begins with a plan. It may change over time, but you’ll have a good place to start and be able to track your progress.
- Once you have a general business plan, determine what type of entity will best suit your business. If you’re selling products, you might want to set up a Florida corporation, but it would be more complex and costly to form and operate. However, if your business is going to provide services such as consulting or contracting, it would be better to form the company as a Florida LLC.
- Next, look through our Florida Business Startup Guide for steps to complete paperwork to form a Florida LLC or Corporation. Remember that all LLCs need at least one member or manager to register with the state. You can walk yourself through our online filing system, or let MyCompanyWorks process the business formation for you.
Quick Recap
A Limited Liability Company or LLC is a business entity type that affords all members limited personal liability protections and is simpler and less expensive to manage than a Corporation. The LLC formation also makes it easy to keep personal assets separate from the business and any potential lawsuits. Liability protection, ease of operation, and personal taxation are top reasons many startups choose the LLC business entity type. Members of various citizenship statuses, other LLCs, and an IRA are all qualified to own LLCs.
If you’re offering services rather than products, a Florida LLC may be the easiest and most affordable option for your company. Only one member is required to form what is called a Single-Member or 1-Person LLC, so it’s possible to be the sole owner of your company. You can save yourself some money by filing your own paperwork. You can save time and money with MyCompanyWorks’ Florida LLC Filing Service. Companies that sell products or are complex in nature should consult an attorney or tax professional to decide on the right business type.
Taking advantage of Small Business resources like the Florida SBA and Small Business Development Center can put you ahead of the startup learning curve with volunteer support and resources for funding. Making use of free tools, events, networking meetings, can help you make good business decisions and hang on to your startup capital.
As with any business type, there are pros and cons to establishing an LLC. Take the time to weigh the benefits and drawbacks. You may find that forming an LLC in another state or even forming a Corporation may suit your business better than what a Florida LLC has to offer. Once you have your business plan in place, visit our Florida Business Startup Guide to start an LLC in Florida or have MyCompanyWorks file the paperwork for you.
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