Corporations LLC

Accountancy Age

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So, you want to form an LLC in Florida? Frankly, that is not surprising. The LLC (which stands for “limited liability company”) is one of the most popular forms of business enterprise for small businesses. And, LLC’s are popular in Florida. This popularity is borne out by the statistics. According to the Florida Department of State’s Division of Corporation’s website, over 128,000 LLC’s were filed in Florida in 2009 alone. In fact, more LLC’s were filed in Florida in 2009 than regular profit corporations.

Why is this business form so popular? The LLC offers a variety of advantages. First and foremost, it offers limited liability protection to its owners. Secondly, it provides the advantage of pass through income taxation to its members / owners. This means that, unlike a regular corporation, an LLC is not subject to double taxation. This type of business entity also allows great flexibility in setting up its capital structure and distributing profits to its members.

The procedure to form an LLC in Florida is fairly straightforward. The initial step is to prepare and file articles of organization with the Division of Corporations. The articles of organization is the document which “creates” your company. In this document you must provide some basic information about your company, such as the name of the entity, principal address of the business, name and address of the registered agent in Florida, and other information. You should be aware that the company is not actually created until it is formally registered with the Division of Corporations. There is a state filing charge of $125.00 which must be accompanied with the filing. Once your entity is filed, then you should obtain a tax identification number for your new company. You can obtain a tax identification number, or EIN, from the IRS.

There is another matter worth considering after creating your LLC. If you plan to have multiple owners of the company, then you should think about entering into an Operating Agreement. Essentially, an operating agreement is a contract between and among the members of the company that defines their rights and duties to one another and to the company. This document might regulate, for example, the ownership percentages of each member, how company profits and losses are allocated, management structure, voting power of members and managers, transfer of ownership rights, and a host of other issues. These matters are important to consider if you want to avoid future conflicts with your business partners.