Florida Limited Liability Company

Initial Considerations

• Business owners have limited liability for company debts and lawsuits
• No mandatory annual meetings or minutes (unlike C-Corp and S-Corp)
• An LLC can be owned by another company
• Management of the LLC’s business can be contracted
• Flexibility for allocating profits amongst the company’s members
• An LLC qualifies for pass-through taxation, avoiding double taxation
• Business duration can be perpetual
• Created by state-level legislation
• Profits and losses can be reported on personal tax returns (unlike C-Corp and S-Corp)
• Can have a foreign owner (unlike C-Corp)
• Can have an unlimited number of owners

• It can be more difficult to take the company public (compared to a C-Corp or S-Corp).
• An LLC is often more complex than a partnership
• Equity Compensation and vesting are complicated and expensive.

Name of LLC

Before filing any documents, your business must determine the name of your LLC. In Florida, the naming requirements are as follows:

• The name of the business must include the words “limited liability company” or the abbreviation “L.L.C.” or “LLC”
• Professional LLCs that are formed after 2014 must include the words “professional limited liability company” or the abbreviation “P.L.C.” or “PLLC”
• Your name must be unique and distinguishable from all other entitles filed with the Florida Department of State, Division of Corporations (DOC). If your name is similar to another LLC, you can obtain written permission from that business to use the name.
• The name must be used by the LLC with transacting business in Florida, unless an assumed name is adopted.

An LLC’s name is not considered distinguishable when its only difference is:

• The symbol “&” or the word “and”
• The use of a suffix
• A definite/indefinite article
• The plural, singular or possessive version of a word
• Punctuation marks
• An abbreviation of a root word

For example, you can not register an LLC with the name “Coca and Cola” or “Microsoft!”. The name of your LLC should not have language implying or stating that you are affiliated with the government agency. It should not imply that the LLC was organized for a different purpose than the one authorized by the RLLCA and LLC’s articles of organization.

Businesses should research the availability and suitability of LLC names in advance of filing articles of organization to avoid any delays. LLCs in Florida can operate under a fictitious name for a small fee. If you intend to use the name of your LLC as a trademark, trade name, or domain name, searches should be conducted with the US Patent and Trademark Office before applying.

Pre-Formation Logistics

Once your business has settled on a name for the LLC, you should go through the following steps:

• Identifying who the organizer is
  The organizer is the individual or business that prepares and files the articles of organization for your LLC. Usually, that will be a qualified lawyer
• The address details of the LLC’s principal office for articles of organization
  An address must be specified on the articles of organization. However, a Florida LLC does not require a principal office in Florida.
• The address of the LLC’s registered office
  This can be the same as the LLC’s place of business.
• The registered agent of the LLC
  The LLC must continuously have a registered agent. They can either be an individual residing in Florida with the same address and the LLC’s registered office OR a foreign/domestic entity that is authorized to do business in the address assigned to the LLC’s registered office.
• Whether the LLC will have an indefinite duration
  By default, an LLC will have an indefinite duration, however, your LLC may prefer a specific period of duration.
• Whether the LLC renders professional services
  Is your LLC for a doctor’s or lawyer’s office? Additional statutory requirements exist for LLCs delivering professional services.
• Is the LLC single member or multi-member?
• Is the LLC member-managed or manager-managed?
• Will the LLC be using a long-form or short form operating agreement
  Your LLC has the option of using a single operating agreement covering all operations or multiple agreements for different matters
• Does the LLC have majority/minority interests?
  How will ownership of the LLC be divided?

Articles of Organization

In Florida, the LLC is formed when it has at least one member and the company’s articles of organization have become effective. The articles of organization must be submitted to the Division of Corporations (DOC). The effective time and date can be specified on the filings – if left blank the DOC will provide a time. Counsel usually submits the filing documents online or via email.

Filing the articles of organization with the DOC attracts a $125 fee. If certified copies of filed articles are required, there is an additional $30 fee. A letter of acknowledgement is issued upon the filing of documents.

Operating Agreement

Any business forming an LLC must have an operating agreement. This document defines:

• The company’s management structure
• How profits are allocated and distributed
• Other agreements and arrangements between members of the LLC

There are some important considerations you should make when preparing these documents, including:

• The rights of each member
  Some of the rights that use be spelled out include the member’s rights to profits and losses, their management rights, and voting rights.
• Should the LLC have multiple classes of interest?
  Will the LLC have members with non-voting interests, non-economic interests, convertible interests, or profit interests?
• How will the LLC be managed?
  LLCs can be managed by one of the members, or a manager can be brought in.
• Initial capital contributions
  Who will be contributing initial capital, how much will they contribute and in what form?
• Allocation of profits, losses and distributions
  How will financial matters be handled within the LLC?
• Admission of new members to the LLC
  There may have to be rules regarding the admission of new members to the LLC
• The dissolution of the LLC
  The operating agreement may also include some details on how the LLC should be dissolved.

It is usually a good idea to have a professional help you draft the operating agreement of your LLC.

Initial Acts of the Members

Some LLCs create a resolution that spells out the initial acts required of individual members. This can be useful to get the LLC running quickly. Some of the items that you may include are:

• Setting up bank accounts and account signatories
• Electing officers
• Applying for foreign qualification in other states
• Hiring managers and other staff members

Post-Termination Matters

Finally. you may wish to specify any post-termination matters. This may include the division of assets and dealing with any liabilities that the business has.

Thank you for reading our guide to forming and organizing an LLC in Florida. If you have any questions about forming an LLC, contact FL Patel Law PLLC on (727) 279-5037.

Q: Why are LLCs so common?

LLC’s 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: 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 LLC’s finances and organization and provides rules and regulations for a smooth operation. The agreement includes a percentage of interest, allocation of profits and losses, owners’ rights and responsibilities and many other important provisions.

Q: How is an LLC managed?

In Florida, LLC’s can be managed by owners (member-manage) or by executives chosen by the owners (manager-managed).

Q: How is an LLC Taxed?

LLC’s 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.

Q: What is a Registered Agent and Registered Office?

This person is designated by an LLC to receive legal papers that are served on the company. They are called the Registered Agent. The Registered Agent is regularly available at the Registered Office of the company. This office can be company’s offices or the offices of another person who is the Registered Agent. What the Registered Agent does is they receive court papers and forward them to all the members of the LLC.

Q: Should I work with a LLC Formation Attorney?

Starting an LLC in Florida can be a simple process if you hire a proven lawyer to represent you in assembling your documentation.

Begin with a unique and currently unused name to define your business and check URL availability. A Tampa LLC formation layer can steer you past the use of restricted and even prohibited words for your company.

At FL Patel Law, our business attorney will help you file the required Articles of Organization for Florida LLC formation and assist you in drafting your operating agreement. We will advise you to keep your business and personal finances separate by getting an EIN, a business credit card, and registering for state taxes. If you are interested in forming an LLC in Florida, contact us today so we can help ensure it is done right!