5 Things to Know About Forming an LLC
A limited liability company can be described as a type of business entity, which has become a preferred choice for small business owners. Unlike corporations, limited liability companies do not require adherence to the strict meeting requirements and other formalities that are required when operating a Florida corporation.
Further, limited liability companies are designed to shield the owners from any personal liability associated with the limited liability company’s debt; however, there are certain caveats to this, which is why it is important for you to seek legal counsel and speak with a business law attorney to ensure that your limited liability company is set up correctly.
It is important to note that not many people are familiar with the processes involved in registering a limited liability company. Considering that every state has its own laws, it is important to seek guidance from Orlando business law attorneys. They will be able to clarify anything that you do not understand.
Below are five things to know about forming a limited liability company:
1. Select the name of your company
In Florida, any limited liability company name must also contain, “Limited Liability Company, LLC, or L.L.C.” Further, if you are incorporating a professional LLC, the name must include the term “Chartered, Professional Limited Liability Company, P.L.L.C., or PLLC.”
The name of your limited liability company should be distinct from those of other businesses or entities that are already listed in the records of Florida’s Department of State. The best way to ensure this is to conduct a preliminary search for your chosen name in the business name database found in the Department of State, Division of Corporations, before you complete and submit your Articles of Organization. To reduce your chances of receiving a rejected filing, you can also seek help from any Orlando business law firm.
A business attorney Orlando will take you through the entire registration process and help you avoid taking any steps that are prohibited.
2. Appointing of a registered agent
Anyone registering a limited liability company in Florida must have a registered agent. This is a legal entity or person who will accept service of process if your limited liability company is sued.
Also known as an agent for services of process, a registered agent must have the following qualifications:
• A business entity with an active Florida entity filing or an individual
• The appointed registered agent must sign the Article of Organization to affirmatively accept his or her obligations, as a registered agent, under Florida Statutes
The registered agent must have a physical street address in Florida, a post office box address will not be accepted.
If you need assistance incorporating a limited liability company, Orlando business law attorneys can help you with the preparation and filing of your organizational documents. Orlando business law attorneys may also offer registered agent services for your limited liability company.
3. File articles of organization
This is another important step to know when filing for a limited liability company in Florida. It involves filing Articles of Organization with the Florida Division of Corporations. The Articles will likely include the following elements:
• The name of the limited liability company
• The street address of the limited liability company’s principal office
• The mailing address for the limited liability company if it differs from the principal place of business
• The purpose of the limited liability company
• Names and addresses of the managers or the authorized representatives of the limited liability company
• Name and address of the registered agent of the limited liability company
• The desired effective date of the limited liability company
• The signature of at least one of the persons who are acting as an authorized representative
• The signature of the registered agent, which confirms the agent’s acceptance of the registered agent obligations
• A valid email address for any correspondence
Sometimes the requirements might vary depending on the type of your business. Given this, it is recommended that you consult with Orlando business attorneys to verify all information before submitting your application.
4. Preparation of an operating agreement
Although a limited liability company operating agreement is not mandatory in Florida, it is highly recommended to have one. An operating agreement is an internal document that basically stipulates how your limited liability company will be run. It is designed to clearly delineate the respective rights and obligations of the members and the managers.
A business attorney in Orlando is the best person to help you draft an operating agreement.
5. Pass Through Taxation
When incorporating your limited liability company, you will need to determine how the limited liability company will be taxed. Generally, unless otherwise specified, limited liability companies are structured as pass-through taxation entities. In other words, any profits and losses will not be taxed against the limited liability company, and instead, will “pass-through” the entity and flow directly to the members of the limited liability company.
In a nutshell, the process of registering a limited liability company in Florida is simple and straightforward; however, if you are looking to shield yourself from any personal or tax liability, it is wise to closely work with Orlando business lawyers to ensure that the entity is set up correctly. Nishad Khan P.L. is glad to offer any legal assistance with properly setting up your limited liability company.