Question 1

How is an LLC formed in Florida?

Accepted Answer

Formation process: (1) Choose a name (must include "LLC" or "Limited Liability Company" and be distinguishable from existing Florida entities; check availability at sunbiz.org). (2) File Articles of Organization with the Florida Division of Corporations (online or by mail; filing fee is $25). (3) Designate a registered agent (a person or entity in Florida who can receive legal documents on behalf of the LLC). (4) Draft an operating agreement (not required to be filed but essential for defining the members’ rights, responsibilities, and ownership percentages). (5) Obtain an EIN (Employer Identification Number) from the IRS. (6) Open a business bank account (keeping LLC funds separate from personal funds is essential for liability protection). (7) File the annual report with the Division of Corporations (due by May 1 each year; fee is $38.75).

Question 2

What liability protection does a Florida LLC provide?

Accepted Answer

Liability protection: an LLC protects its members (owners) from personal liability for the LLC’s debts and obligations. This means: if the LLC is sued, the members’ personal assets (home, car, bank accounts) are generally protected, creditors of the LLC can only reach the LLC’s assets, and members are not personally liable for the LLC’s contracts, debts, or torts (unless the member personally guaranteed a debt or committed a tort). However, LLC protection can be lost if: the members commingle personal and LLC funds (mixing personal and business finances), the LLC does not observe corporate formalities (no operating agreement, no separate bank account, no records), the LLC is undercapitalized (created with insufficient assets to cover foreseeable liabilities), or the LLC is used to perpetrate fraud. This is called "piercing the corporate veil."

Question 3

What ongoing requirements must a Florida LLC meet?

Accepted Answer

Ongoing requirements: file the annual report with the Division of Corporations by May 1 each year ($38.75 fee; failure to file results in administrative dissolution), maintain a registered agent in Florida, keep the LLC’s records (operating agreement, membership records, financial records), file applicable tax returns (the LLC itself does not pay Florida income tax, but members report their share of LLC income on their personal returns; the LLC may need to pay Florida sales tax, tangible personal property tax, and federal employment taxes if it has employees), and maintain the LLC’s separate identity (separate bank accounts, separate contracts, proper titling of assets).

Limited Liability Company Formation

LLC Formation in Florida

Formation Steps

Liability Protection

Ongoing Requirements

Related Terms

Barnes Walker Business Law

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