June
21, 2021
5 min read
This story originally appeared on ValueWalk
While Coronavirus has hurt many states, there has been a big winner – Florida. Politics aside, Florida’s liberal COVID policies seemed to be popular among the wealthy. Indeed, many tech experts see Miami, Florida, as a possible new tech mecca of the future. Amid the state’s rapid growth, it is crucial to get familiar with the basics of business formation there.
Starting an LLC in Florida is pretty much the same as starting one in other states. It might seem like a complicated process, but it isn’t difficult.
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Name your company
The first step to starting an LLC is obvious, and that’s coming up with a name for it. Some states provide a tool on their Secretary of State’s website that allows you to search a particular name and see if it is available. In Florida, the tool is called the SunBiz LLC Name Search. The names of businesses that were administratively dissolved or revoked business names marked as INACT/UA are held for a year after the date of dissolution of revocation. The names of businesses that were voluntarily dissolved are held for 120 days.
When choosing a name, it’s important to realize that Florida doesn’t distinguish between companies with different suffixes. In other words, if someone has the name Business Enterprises, Inc., you won’t be able to name your company Business Enterprises LLC because the name has been taken. Additionally, names using definite and indefinite articles like “the” and “an” aren’t considered different, which means The Kitchen Ltd. is the same as A Kitchen LLC.
The word “and” and the ampersand sign (&) are also considered the same, and the singular, plural and possessive forms of a word are considered the same. Punctuation also doesn’t make a difference in choosing a name, and neither does abbreviating one of the words. Additionally, your business name must include either “LLC” or “Limited Liability Company.”
To reserve a name, you can pay $25 and submit a letter specifying the name to be reserved and giving your name and address. The name will be reserved for 120 days. However, you don’t necessarily have to reserve a name unless you are worried someone else will take it while you are preparing your documents. Before choosing a name, you may also want to check for a good website domain by going to GoDaddy and looking up some names.
Designate a registered agent
After selecting a name, you will have to choose a registered agent. You might think you would automatically be the registered agent, but that may not be a good idea.
A registered agent receives important legal documents like service of process notes and tax forms on behalf of the LLC. It can be a person or an entity, but if you are selecting a person, there are some things you should keep in mind. The registered agent must be available at all times during normal business hours between 9 a.m. and 5 p.m. That means the person can’t go on vacation or step out of the office for a few minutes.
If you work from home, your address will also be made public.
File Articles of Organization
When you file your articles of organization, you will have to designate your registered agent and five their name, street address and signature. The required forms also ask for your company’s full name and the effective date the business was formed, which can be up to five days before the submission of the form or 90 days after the date of receipt.
The documents also require the mailing and street addresses of your office, the name and signature of every authorized member and manager, and your name and email address for confirmation and future communications.
The easiest way to file your Articles of Organization is to do it online through the SunBiz website, although you can also submit it in person or by mail. You can choose to file the document yourself or use an LLC formation service if you aren’t sure about what to do.
Write your operating agreement (optional)
Although LLCs in Florida aren’t required to have an operating agreement, it is still a good idea to write one. An operating agreement spells out the responsibilities of each member and how new members will be admitted. The agreement also states how existing members can either transfer or terminate their membership and how dividends and profits will be distributed.
An operating agreement can include as many or as few provisions as you want, as long as they don’t conflict with business law in Florida. It should also outline the dissolution process if you and the other members decide you no longer want the business.
Get an EIN
Once you have all your other documents in place, the next step is to get an Employer Identification Number from the IRS. If you are running a single-member LLC and have no employees, you do not necessarily need one. However, you may still wish to have one if you have to fill out a W9 as a contractor and don’t want to hand out your Social Security Number.
To obtain an EIN, go to the IRS website here and fill out the form. It’s free to get an EIN using this tool. Some firms will try to convince you to pay them to secure an EIN for you, but it’s so easy to do it yourself for free that it doesn’t make sense to pay someone to do it.
Starting an LLC in Florida or anywhere else in the country is exciting and your first step to having a great business. To learn more, you can check out TRUiC’s guide to setting up an LLC in Florida here.