As a business owner, you’ll be faced with numerous important decisions, and that includes what business structure to form. In America, you have the choice to form a limited liability company (LLC).
What Is An LLC?
An LLC is a type of business that combines a number of features of partnership and corporation structures, but it’s not a clear-cut partnership or corporation. Owners of a limited liability company are referred to as members and there can be as many members as you like in the form of individuals, other LLCs, and even corporations.
The Benefits of Starting an LLC
Owners of a limited liability company have the same liability protection as a corporation. Similarly, too, an LLC is deemed a separate entity. Members may not be personally held responsible for any debts unless they’ve signed a personal guarantee.
While corporations must have meetings and keep formal minutes, LLCs don’t require corporate resolutions or minutes, making it an easier structure to operate. What’s more, an LLC can select various forms of distribution of company profits.
As an LLC, all the business’s profits, losses, and expenses flow through to individual members. That means you can avoid double taxation in terms of individual and corporate tax.
Before you start your LLC, there are 3 important things you need.
Articles of Organization
In the state of Florida, LLC requirements are straightforward. You need to file the following forms with the Division of Corporations:
- The company’s name and address
- Name, address, and signature of a registered agent
- Names and contact details of managers and members
- The start date of the LLC
- An authorized member or representative’s signature
Along with registration, you’ll need to send in a filing fee. It typically takes anywhere from 2 days to 2 weeks to process the forms.
1. Naming Your LLC
Before you can start your new business, the name of your LLC should be checked for availability at the Florida Division of Corporations. In Florida, the naming conventions for your business require that the business name end with LLC or some form of it.
Should you choose a restricted work in the name of your company, you may be required to produce additional proof of licenses. For instance, if you decide to use the word “attorney” in the name, you must ensure a licensed attorney is part of your limited liability company.
The reason that some words are prohibited is that they could suggest that the company is a federal or state agency. So, you can’t use words like state or treasury, for example.
2. Operating Agreements
An operating agreement can serve to set out all the important issues that your LLC faces, such as member requirements, voting rights, management structure, and other procedures. These are legally binding documents and are highly valuable as they outline ownership and procedures before these issues can become problems.
While it’s not a legal requirement for Florida limited liability companies to have an operating agreement in place, they are recognized as governing documents and are highly recommended.
3. A Registered Agent
This is either a corporation or a person that can legally conduct business in our state. The agent can be part of the limited liability company or it could be you, as the owner. Whoever the registered agent is, they will receive service if the LLC is ever sued, can accept mail, and can act as a general point of contact for your company. The agent must reside in Florida.
Peace of Mind When You Start Your LLC
Forming a new limited liability company can be of great benefit for your business, but the processes can easily become complicated. To make sure your new business complies with Florida’s legal requirements before you even form your business, it’s a good idea to consult an experienced business attorney. After all, not complying with the law could cause your new business astronomical costs before you’ve even got it off the ground.
Make sure you have everything you need to start an LLC. Contact Principal Law Firm today to book a consultation.
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