Sunbiz LLC: Everything You Need to Know
Many people form an LLC because of its business structure flexibility and benefits. It has the tax benefits of a corporation and the personal protection of a limited liability partnership.3 min read
2. Choosing an LLC
3. Forming an LLC
4. Articles of Organization
Sunbiz LLC refers to forming an LLC in Florida. Sunbiz.org is the name of the official website for the Florida Division of Corporations, which handles LLC filings in that state. In any state, you must file for a Limited Liability Company according to the requirements in that state.
Choosing an LLC
Many people form an LLC because of its business structure flexibility and benefits. It has the tax benefits of a corporation and the personal protection of a limited liability partnership. Some refer to this as a hybrid of a corporation and a limited liability partnership. Like every other form of corporate structure, there are some things that made a great idea and there are also some drawbacks.
There are some pros:
- Taxes are considered pass-through taxes, which means no corporate tax returns. LLC owners report their share of profit and loss on their individual tax returns and aren’t taxed again.
- There is no residency requirement. Being a U.S. citizens or permanent resident is not a requirement to own a LLC.
- Creating an LLC gives its members, limited liability for business and legal debts and obligations.
And some cons:
- To raise capital, LLC owners cannot issue shares of stock. This can limit growth.
- LLCs are treated differently in different states. This can add complexity if the company grows.
- LLC earnings can be subject to this self-employment taxes. This may cap earnings for members.
- There is tax recognition on appreciated assets. Additional taxation means less profit.
Forming an LLC
To form a limited liability company in Florida, there are steps that should be followed. It’s important to ensure that you think carefully about each step. If you deem it necessary, consult an attorney in the state of Florida for help. Here are the steps:
Step 1: Name it. Research a name to ensure it isn’t in use in Florida through the state’s database search. If the name is not in use, then you may use it for your business. You may want to give it a lot of thought and ensure that it follows all of the naming conventions.
Step 2: Draft and file your Articles of Organization with the Florida Division of Corporations. These must include:
- Name and address of the Limited Liability Company
- Name and address of the registered agent who also must sign it
- Name and address of members and managers and their title
- Effective date
- An authorized representative or member’s signature
Step 3: Select a business structure that makes clear the management responsibilities of managers and members. This is very important so that everyone involved in the business understands what they are expected to do (and not do).
Step 4: Decide how many owners will be allowed to be part of the LLC. LLCs can be as small as one person but often have two or many more.
Step 5: If necessary, make application for business licenses and other certifications necessary in your industry. If you are an attorney, doctor, bank or accountant then you will need to provide proof of license and may have to apply for a PLLC (professional limited liability company).
Step 6: Make an application to the Internal Revenue Service for an Employee Identification Number (EIN). You will use this number to file taxes and many banks require this number in order to open a checking account.
Step 7: Make an application for any other identification numbers required by other local entities.
Articles of Organization
To draft the articles of organization to create a limited liability company (LLC), you need to do the following:
- Review the instructions for filing to create an LLC in Florida. It has detailed instructions about the Articles of Organization on Sunbiz.org.
- Gather all information required to complete the form to file for an LLC. Or you could hire an attorney to help with the process.
- Have a valid form of payment.
Ensure that you follow these steps to file for a limited liability company in Florida through their Sunbiz.org website or by hiring an attorney who has experience in these types of processes.
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