You’ve been dreaming of starting your LLC in the sunshine state for a while now, and who can blame you? In addition to world-class sunsets and white sand beaches, Florida is home to a thriving economy that encompasses over 2.5 million small businesses.
Florida LLCs offer a long list of benefits, including limited liability protection, no state income tax (Florida is just one of 9 states that offers this), and increased credibility. Did you know that 81 percent of consumers conduct online research before making a purchase online?
There’s no better place to make your LLC dreams a reality. But before you dive head-first into forming your Florida LLC, here are five things you’ll want to consider.
1. You Cannot Form a Series LLC in the State of Florida
If you’re a real estate investor with an expansive portfolio of properties, you may be wondering if you can form a series LLC in Florida. The short answer is no. Although there are several states that allow you to form a series LLC at present time, Florida is not one of them.
The only way you’ll be able to have a series LLC in the state of Florida is if you’ve previously formed a series LLC in another state that allows them. In this case, you’d have to register each individual series that plans to do business in Florida as a foreign LLC.
What is a Series LLC?
A series LLC is a type of limited liability company that consists of a master or “parent” LLC and one or more independent series (LLCs) created underneath it. Each series will have its own name, members (with their own set of rights and obligations), assets, finances and limited liability.
Advantages of a Series LLC
The biggest benefit of a series LLC is the liability protection available to each individual series. If one series gets sued, any assets owned by the remainder of the series (or the parent LLC) will be shielded from the risk of liability.
Here’s a real-word example: One of your real estate properties is a duplex. Your tenant moves out abruptly, retains a lawyer, and files a lawsuit claiming that black mold made her and her family sick. Regardless of the outcome of this case, a series LLC would protect the rest of your properties and assets.
Compared to a traditional LLC, a series LLC can offer you two other major advantages:
- Cost effectiveness – Instead of paying a filing fee for each individual series, you’ll only need to pay one (to cover the parent LLC) during the formation process.
- Tax efficiency – You’re only required to file a single tax return for the parent LLC. However, you’ll probably need to hire a CPA to help with taxes, since this will likely be a complicated tax return.
There are also drawbacks to forming a series LLC. In many states (including Florida), you’ll be required to have a separate registered agent and business bank account for each series LLC. This means additional expenses for your remote business and a bigger budget.
Which States Allow You to Form a Series LLC?
There are 14 states that allow you to form a Series LLC. These are Alabama, Arkansas, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kansas, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas, Utah, Virginia, and Wyoming.
2. Your Annual Report is Due Each Year
You’ll be required to file an annual report and pay the associated filing fees ($138.75) for your LLC every year. These are due by 11:59 PM on May 1st. Should you file late, you will be charged a $400 fee. To help you make sure you don’t miss the deadline, set a Google calendar alert ahead of time to remind yourself to file your Florida LLC Annual Report.
The Florida Division of Corporations does not accept annual reports by mail, fax, or in-person. You must file your Florida LLC annual report online at Florida Division of Corporations: File Annual Report.
3. A PO Box Won’t Get Your LLC Very Far
Let’s talk business addresses. It doesn’t seem like choosing the right one would a big deal, right? Well, it is if you’re planning to form a Florida LLC! A PO box is not an acceptable physical address when forming your LLC, so you can skip the headache of signing up for one. But, what address should you use instead?
The #1 rule of running a remote business is to never use your home address on anything, whether it be paperwork or client communications. Doing so compromises your privacy and looks unprofessional to potential customers and clients.
Fortunately, there’s a more ideal business address option: a virtual mailbox. A virtual mailbox will get you a permanent business address, but that’s not all! You’ll also gain access to convenient services like mail forwarding, mail scanning, and check depositing.
4. You’ll Need a Dedicated Registered Agent
Designating a registered agent is a necessary requirement in order to maintain compliance with the state. Without one, your remote business can be suspended and you will not be able to operate in the state of Florida.
So, who should you designate as your in-state registered agent for your Florida LLC?
Finding the perfect registered agent is half the battle. Some business owners use LLC formation services like Incfile, Northwest Registered Agent, or Rocket Lawyer. While these companies typically offer free registered agent services for your first year, you’ll end up paying each year thereafter in order to maintain these services (these registered agent fees cost around $100-$200 annually).
Here’s a little secret: With select VirtualPostMail (VPM) virtual mailbox plans, you can get registered agent services FREE of charge, saving you $100 (or more) a year. Never stress about missing important correspondences again! You’ll be assigned an agent to accept service of process and receive legal documents for your business during working hours. Stay compliant with same day access to your service of process.
5. Opening a Business Bank Account Requires a Physical Address
In the future, you’re going to want to open a business bank account for your Florida LLC. There’s just one problem. In order to open a business-specific bank account, most banks will require proof of address with a physical address.
You’ll need a physical address that is either A) a commercial office or B) a residential address. This means that a PO box is out of the question (and another reason why you should skip signing up for one altogether).
Don’t have either one of these? With TruLease, you’ll get a virtual mailbox and mailing address, a separate lease agreement for a physical office located in a commercial building, and an optional utility bill to prove the physical address exists.
How TruLease Works
It’s pretty simple. VPM partners with commercial building owners to provide you physical office spaces. You’ll sign a lease agreement to show proof that you have an office space. If needed, you can request a utility bill for additional proof of address.
Forming your Florida LLC can be rewarding, but there are a few things you should know before getting started. If you’re looking to form a series LLC, Florida is not the best state to incorporate in. Each year, you’ll have to file an annual report and pay the associated fees. A PO box isn’t an acceptable business address to form your LLC. Instead, opt for a virtual mailbox. A registered agent is a must, since it’s required to maintain compliance. And last, you’ll need a physical business address in order to open a business bank account.
Ready to form your LLC in sunny Florida? Learn the ins and outs of formation, compliance, and opening a business bank account.