Basic Steps to Starting an LLC in Florida Before Applying for a Business Loan
What do you need to know before Starting an LLC in Florida?
Despite the turmoil that surrounds Florida in terms of political division, it has ranked as the 8th best state for business in the United States for 2023. This is because it has the best-ranked economy among all the states, has seen a 4% GDP growth, and has a steadily increasing job sector with more opportunities for workers.
It’s a great time to start your own business in Florida, with an LLC being a very promising entity for new entrepreneurs. Of course, you may want to take out a GoKapital business loan to enable this pursuit. After all, Florida still ranks middle-of-the-pack in terms of business friendliness and has an even lower ranking in terms of cost of living. At the very least, the state does not impose a minimum capital for you to file for LLC formation.
Before you take out your lines of credit and try to access a capital fund, it’s best to do your research on starting an LLC in Florida first. Thankfully, the steps to kicking things off legally aren’t hard to follow.
Name your Business
It may seem like an obvious step, but you need to make sure that you have a proper business name for your LLC. This is what distinguishes you from your competitors and will need to be handled with care to avoid naming disputes. It’s also important to remember that Florida-based LLCs are required to mention LLC terminology in their name.
You also need to avoid restricted terms that are used by the government or require special permission. For instance, you can’t have “doctor” in your LLC name unless you are a licensed medical practitioner. You can try to get authorization from the Florida Board of Medicine, but this would be under review on whether or not you actually need to have that name. Basically, any name that can be misconstrued or considered deceptive will not work in the state.
Consider an LLC Service
Although you can technically do the entire LLC formation process yourself, it can be a lot easier if you just use a commercial LLC formation service. Although it does come with extra fees, it could be worth the investment to ensure that you get all compliance matters done efficiently and accurately.
If you’re unsure or simply intimidated by the prospect of handling all those procedures, using a service like Zenbusiness or Incfile can simplify everything. This is also a good option if you want the ease of doing practically everything online. Using such a service means they will usually get your operating agreements, reserve your name, and file LLC formation requirements on your behalf.
Get a Registered Agent
Florida legally requires every business entity to have a registered agent in order to operate in the state. The registered agent must also operate in the same state as the business and will handle the service of process, accept legal documents and tax notices from the government, and serve as a point of communication between the public and the business.
So, any tax filing, returns, and communications with the Internal Revenue Service (IRS) will also be directed to your registered agent. They will then be responsible for keeping a copy and sending over the documents to the business owner promptly.
Make Your LLC Operating Structure
Technically, you aren’t actually legally obligated to create an operating agreement for your LLC. That said, it’s better to do so anyway as this helps avoid disputes and minimizes any risks with managing liabilities.
One of the benefits of forming an LLC in Florida is that the state allows flexible operating structures. For business owners, this means management and operational specifics can truly be customized to match the nature of your business. This also means you have more agility if you ever need to make adjustments down the line.
Meet All Compliance Filing Requirements
Now comes the point where you must file all the paperwork to hit compliance requirements and be legally considered an LLC. The first point of focus for you should be the Florida Articles of Organization. If you choose to go the route of an LLC forming service, they will likely guide you through this whole process and handle most of the filing. If you are doing it yourself, then you will need to submit the paperwork to the Florida Department of State online or in person. You can expect to pay $160 in total for filing fees, a certified copy, and a Certificate of Status.
From there, you also need to apply for an employer identification number (EIN) and any business licenses and permits that are relevant to your services or products. Florida has seen a lot of growth in tons of sectors that point to its growing reputation as a bustling economic space. In terms of permits for authorized structures, Florida issues the most permits along with Texas and California.
Open Your Business Bank Account
Finally, you will want to open a business bank account before you actually start operating. This is a must for you to separate your business funds from your personal funds. The structure of an LLC is already meant to minimize your liability, hence the name. Basically, you just want to cover all your bases so that your assets won’t be used to satisfy any debts that may be incurred by your business.
Having a separate bank account for your business also makes tax filing easier and helps with maintaining a healthy cash flow. A study by Intuit revealed that 61% of small businesses around the world have cash flow problems, and many businesses end up struggling because of an inability to recover from these struggles. Creating a dedicated account just helps mitigate these risks.