Frequently Asked Questions About LLCs

Here are the answers to the most common questions our clients ask us about forming an LLC in Florida.

Q. What Statute is the Limited Liability Company governed by in Florida?

• LLCs in Florida are governed by the Florida Revised Limited Liability Company Act.

Q. Why are LLCs so common?

• LLCs are the most common legal structure because it provides strong liability protection, there are less record-keeping requirements, and gives you the flexibility to choose the way you get taxed (as sole-proprietorship/partnership or a corporation. It can be used by a single person with a livelihood business or diverse owners for a large and complex business.

Q. How do you form an LLC in Florida?

• You can form an LLC in Florida by filing articles of organization with the Florida Department of State: Division of Corporation. It is created as of the date of filing unless you designate another date.

Q. What is an operating agreement?

• An operating agreement is a document that governs your company. It specifies rules regarding ownership, rights, and duties of owners, how the company will be managed, duties of the managers, to add or remove members, and so on. Without an operating agreement, your company will be governed by the default rules under the Florida Revised Limited Liability Company Act.

Q. Do you need an operating agreement for an LLC in Florida?

• The State of Florida does not require your LLC to have an operating agreement. However, it is strongly recommended – especially – if you have multiple owners. The operating agreement structures your LLCs finances and organization and provides rules and regulations for a smooth operation. The agreement includes the percentage of interest, allocation of profits and losses, owners’ rights and responsibilities and many other important provisions.

Q.  How are LLCs managed?

• In Florida, LLCs can be managed by owners (member-manage) or by executives chosen by the owners (manager-manged).

Q. How is an LLC Taxed?

• LLCs can elect to be taxed as pass-through entities such as sole-proprietorship and partnerships or as corporations such as C or S. You need to consult with an accountant and an attorney to determine what the best tax structure for your business is. However, for a general overview, you can read more here.

Looking to start a business or grow your current business? Contact FL Patel Law today by visiting our website or calling 727-279-5037.