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From its balmy tropical weather to its total lack of individual income taxes, there are plenty of reasons why you might want to start a single-member LLC in Florida.
If you're ready to launch a Florida business of your own, we have everything you need to know about starting a single-member LLC in the Everglades State along with answers to your most important questions.
What Is a Single-Member LLC?
A single-member Limited Liability Company is any LLC that has just one owner.
Single-member LLCs are quite similar to sole proprietorships in that they involve one person running a business. But dig a little deeper, and you'll find that the two are very different.
This is primarily because the owner of an LLC enjoys limited liability protection. In other words, their personal assets and finances aren't at risk if their business ever encounters legal or financial trouble.
On the other hand, the owner of a sole proprietorship (i.e., a sole proprietor) has no such protection. So if business creditors demand repayment, for example, the owner's car, home, and savings could be on the line.
Note that these definitions aren't exclusive to Florida — they apply to every other state within the U.S., too.
How to Start a Florida Single-Member LLC
Here's how to form your own Florida LLC (single-member) in 10 steps:
1. Choose a Name for Your Business
Your company's name is what your customers will know you by for the foreseeable future, so decide carefully.
To start brainstorming, enter a relevant keyword into our free Business Name Generator. Once you do, the tool will generate dozens of results to inspire you. Throughout the process, try to prioritize options that are unique, memorable, and easy to spell and pronounce.
After you've settled on a few top candidates, check to see if they're available in your state — no two Florida businesses are permitted to have the same name. To do so, you can manually search the records of the Florida Division of Corporations.
Or, if you'd like us to perform the search for you and get back to you with the results, check out our Business Name Search Tool.
If your preferred name is available, you're free to use it. If it isn't, you'll need to pick another option from your shortlist.
2. Provide a Street Address
Regardless of the type of business you're starting, an official address is an important component of its formation and management.
Why? First, Florida requires you to provide a street address on your incorporation paperwork when forming your business. Second, you need a mailing address to receive important correspondence such as bills, notices, and check payments.
But what happens if you run your business from home and you don't want to use your home address for business mail or expose your personal address to customers? No problem — in that scenario, you can get a real Florida street address through our Florida Virtual Address service.
We even scan and upload your mail to our online portal, so you can read your business correspondence 24/7 from anywhere in the world.
3. Select a Registered Agent
Like each of the other 50 states, Florida requires a Registered Agent to be named for all new businesses.
A Registered Agent is a person who accepts official legal and regulatory correspondence on your business's behalf. If your state government sends out a notice about an upcoming due date, for example, your Registered Agent will be the one to receive it.
And while it's certainly possible to be your own Registered Agent, it's not recommended. That's because doing so will make your personal address public, entail certain requirements (such as mandated business hours), and increase your chances of missing crucial pieces of mail.
The solution? Use Bizee's reliable (and affordable) Registered Agent service for Florida. We'll even notify you whenever you receive correspondence, so you'll never miss a deadline or important letter again.
4. File Your Articles of Organization With the State
Now that you've gotten the basics figured out, it's time to file your Articles of Organization with the Florida Department of State, Division of Corporations.
Within the form, you'll need to provide information such as:
- Company name
- Principle place of business address (must be a street address)
- Mailing address (can be a P.O. Box)
- Registered Agent name, address, and signature
- The date on which you want your LLC application to become effective (optional)
- Your name, email, and signature
Want someone to handle the paperwork for you (and ensure you don't miss any important details)? Consider using an LLC filing service instead.
5. Write an Operating Agreement
Florida doesn't legally require that every LLC have an operating agreement, but we recommend creating one anyway.
After all, a well-crafted operating agreement can help you define your responsibilities, establish policies, and make plans for the future.
So even though you'll be the only owner of your single-member LLC, take the time to create an operating agreement and you'll surely save yourself some headaches down the road.
6. Get an EIN
An Employer Identification Number (EIN) isn't strictly necessary for all companies, but it's required if you want to hire employees.
To get one, you can apply directly through the Internal Revenue Service (IRS). Or, if you'd like us to take care of the red tape for you, use our convenient EIN service.
7. File Annual Reports
Every Florida LLC must file an annual report in order to continue operations. If you fail to file yours, the state will administratively dissolve your business.
Make sure you submit your annual report correctly and on time with our Annual Report Filing service.
8. Open a Business Bank Account and Credit Card
While not required by the state, having a separate business bank account and business credit card will enable you to separate your personal and company finances, easily track your business expenses, and budget more effectively.
9. Organize Your Finances and Pay Taxes
Once you've set up a bank account and credit card, you'll be in an excellent position to organize your finances and tackle your taxes.
Start by ensuring your business accounting and bookkeeping processes are clearly laid out. For instance, you'll need to decide how to create budgets, record expenses, monitor cash flow, analyze sales, create invoices, receive payments, and so on.
Next, get prepared for tax season by learning about frequently overlooked tax deductions and credits, determining which LLC tax forms you'll need to file, and deciding whether to DIY your taxes or hire a pro.
10. Comply With Local Regulations
To keep your LLC in good standing, you'll need to abide by local regulations as well as federal and state regulations.
In terms of Florida business licenses, for instance, there is no state-wide general business license. However, most cities and counties require at least one business license in order to operate.
So once you've complied with all federal and state regulations, it's crucial to check and comply with your local ones too.
FAQs About Florida Single-Member LLCs
Find answers to the most common questions about starting a single-member LLC in Florida.
Does a Single-Member LLC Protect Your Personal Assets in Florida?
In Florida, like in most states, a single-member LLC generally provides a level of personal asset protection for the owner. This protection is a key benefit of forming an LLC.
The primary purpose of forming an LLC is to separate your personal assets from the business's liabilities and debts. There are caveats, however, such as if you personally guarantee a business debt. In that case, your assets won't be protected (see more examples of exceptions under the following question).
Is a Single-Member LLC Risky?
A single-member LLC is no more risky than other business entity types and is much less risky than a sole proprietorship. This is due to the personal liability protection an LLC provides.
With that being said, it's important to know that the asset protection offered by LLCs and other entity types is not infallible. In a single-member LLC, for instance, your personal assets could still be at risk if:
- You made the decision to personally guarantee a business debt or obligation.
- You personally engaged in wrongdoing.
- You failed to adequately separate your personal assets from your business assets.
But as the owner of a single-member LLC, you'd have complete control over what you do, how you manage your finances, and which debts you accept or reject. So with some planning, there's no reason you won't be able to keep your personal assets safe.
What Is the Point of a Single-Member LLC?
The purpose of a single-member LLC is to run a business with one owner and to get personal asset protection.
In a sole proprietorship, your business, personal finances, and assets will all be one and the same. But if you start a single-member LLC, your personal finances and assets will generally be protected from business debts and lawsuits (to learn about possible exceptions, see the previous question).
What Are the Pros and Cons of a Single-Member LLC?
Compared to a multi-member LLC, a single-member LLC has several benefits:
- Total control: Without the opinions and influence of other members to consider, you'll be free to run your business exactly how you want.
- Less paperwork: One owner means you won't have to deal with as many contracts, tax forms, and other paperwork as you would with multiple owners.
- Simplicity: All your business's administrative processes and major decisions can be completed much faster when you only have your own input to worry about.
But on the other hand, single-member LLCs have drawbacks:
- Sole financial burden: Without the investments of other members to rely on, you'll be 100% responsible for funding the LLC and its endeavors.
- Heavier workload: If you're running the LLC by yourself, you won't be able to share the workload with its other owners.
Ultimately, whether or not a single-member LLC is right for you depends on which pros and cons matter most in your eyes.
Can a Husband and Wife be a Single-Member LLC in Florida?
No, a married couple can't be a single-member LLC in Florida. Why? Florida is not a community property state, which means that married couples don't automatically share all their assets, debts, and income.
So when a husband and wife own an LLC together in Florida, they're not viewed as one "unit" for tax purposes. Instead, they'll each own a percentage of the LLC and will be treated as a partnership by the IRS (unless they choose to have the LLC taxed as an S Corp).
How Do I Convert a Single-Member LLC to a Multi-Member LLC in Florida?
To change your single-member Florida LLC to a multi-member LLC, follow these steps:
- Determine ownership percentages according to how much of the company the new member will own.
- Update your operating agreement to reflect the new member's role and responsibilities, as well as guidelines for resolving conflicts, making decisions, and voting.
- Amend your Articles of Organization with the Florida Department of State to include the names and addresses of all new members.
- File IRS Form 8832 and elect to be taxed as a partnership (only complete this step if your LLC already has an EIN).
Should You Pay Yourself in a Single-Member LLC?
As the owner of a single-member LLC, you won't pay yourself a salary in the traditional sense. Instead, you'll take an "owner's draw" from the company's revenue.
Whether or not you should pay yourself depends on your financial situation, as well as how quickly you want to grow your LLC.
For example, if you don't need the money to cover your living expenses and aim to grow your LLC as fast as possible, you can reinvest all of the company's profits in lieu of paying yourself.
But if you're depending on your LLC's revenue to cover your rent, groceries, or other essential expenses, you should absolutely take an owner's draw.
When Do Single-Member LLCs Have to File Taxes in Florida?
You'll file taxes for your single-member LLC at the same time that you file your personal income taxes. That's because LLCs are subject to pass-through taxation, which means the earnings are simply "passed through" to their owners' personal taxes.
For more details on LLC taxes and fees in Florida, see the information provided by the FL Department of Revenue.
Start Your LLC in the Sunshine State
Consistently ranked as one of the top states in the nation for businesses, Florida's low tax burden, plentiful resources, and convenient online business services make it a fantastic place to form your single-member LLC.
While you can take the DIY approach to form your business, there's a much easier way to get started: Just select Bizee's $0 + state fee LLC package, and we'll handle all the paperwork for you.
Carrie Buchholz-Powers is a Colorado-based writer who’s been creating content since 2013. From digital marketing to ecommerce to land conservation, she has experience in a wide range of fields and loves learning about them all. Carrie is fond of history, animals and beauty in equal measure. In her free time, she enjoys knitting, playing video games and exploring Colorado's prairies and mountains with her husband.
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