Wondering whether you should form an LLC in Florida? In this article, we consider why LLCs are especially common in Florida and five simple steps to form one.
The formation of LLCs, as a choice of business structure, has slowly but surely been on the rise in American society since the start of the early 2000s. According to academic research, IRS statistics show that domestic LLCs have increased by 66% between 2004 and 2015, which only speaks to the growing popularity of LLCs in US states. There was a time when the IRS did not provide rules and regulations for classifying and taxing LLCs. But eventually the IRS did establish regulatory default rules which more clearly defined how LLCs were to be taxed and classified. The new rules determined that LLCs with two or more members, also referred to as multi-member LLCs, be taxed as partnerships while single-member LLCs are disregarded for such tax stipulations and avoid double taxation. As a single-member LLC, the IRS ignores your business structure and taxes you as an individual when you report your LLC’s profits on your personal tax return. These tax regulations led to the increase of LLC formations we see today in many US states, such as Delaware, Nevada and Wyoming for their relaxed business laws, and Texas and Florida for their relatively low LLC formation and maintenance fees and tax requirements in relation to other states.
Florida is considered one of the top five US states in which to form an LLC for these exact reasons. The start-up cost to form an LLC in Florida is $125, the fee for filing for your Article of Organization form with the Florida Division of Corporations. Additionally, LLCs in Florida are not required to pay Franchise Tax, as is a requirement in a few other US states. It is for this and many more reasons that LLCs are so common in Florida. Below are a few simple steps to follow if you want to form your LLC in Florida.
Forming an LLC in Florida: a few simple steps
Firstly, you need to choose a name for your LLC. Every state has its own set of few rules and regulations you will need to comply with when naming your LLC, in Florida you will need to comply with Florida naming laws but also make sure your name is easily searchable by potential clients. To ensure that the name you have chosen does not already exist, you can conduct a name search on Florida’s Sunbiz website. The next step you have to take is to choose a Florida Registered Agent. You can appoint someone with the LLC, including yourself, to act as your LLC’s Registered Agent. The Registered Agent you appoint must be a full-time resident or business entity of Florida, and also be authorized to conduct business in the State of Florida. Once appointed, your Registered Agent will be responsible for receiving important legal and tax documents, notices of lawsuits and government correspondences on behalf of your LLC. After choosing your LLC’s name and appointing a Registered Agent, you can file an Articles of Organization form with the Florida Division of Corporations. This can be done online, by mail or in person and once processed (in an average time of two to four weeks), it is a legal document that officially forms your LLC in Florida. All that is then left to do is create an Operating Agreement outlining the ownership and operating procedures of your LLC, and obtain an Employer Identification Number (EIN) for tax and banking purposes and to employ people to work for your LLC.
And there you have it, the five simple steps you can follow to forming your LLC in Florida. For more information, advice or professional services on how to form an LLC in Florida, TRUiC can assist you. Visit this site to learn more about LLCs in Florida and how you can form your LLC today.