What to do after forming an LLC in Florida

In Florida, an LLC is formed upon the filing of the entity’s Articles of Organization.

However, the process does not end there.

To make sure that an LLC operates effectively and in compliance with both state and federal requirements, there are several additional steps that must be followed.

The following is a cursory list of a few of the most important steps every entrepreneur should take concerning what to do after forming an LLC in Florida:

1. Draft an Operating Agreement

While Florida law does not require that an Operating Agreement be drafted for an LLC to be valid, it is highly advisable to do so – even for single-member LLCs.

An Operating Agreement is an internal document that delineates several important aspects of the respective LLC, such as its management arrangement, roles and classes of its members, as well as the operational procedures of the entity.

In Florida, an LLC’s Operating Agreement is not filed or made public record.

However, having an Operating Agreement provides clarity of the business’s operation to third parties in addition to outlining the manner in which future disputes may be handled or avoided entirely, and is a critical step in what to do after forming an LLC. 

2. Applying for an Employer Identification Number

An Employer Identification Number (EIN) may be obtained by making a request to the Internal Revenue Service (IRS).

An EIN is needed for several reasons, such as tax purposes, opening a business bank account, or hiring employees. EINs may be applied for directly through the IRS website. 

3. Open a Bank Account for your Business

In Florida, it is imperative that personal finances of the LLC members are kept entirely separate from those of the business itself to maintain the full extent of protection that such an entity affords its owners. 

Aside from assuring liability protection, there are several practical reasons for opening a business bank account.

In Florida, they help ensure accurate bookkeeping records and tax filings. 

Usually, financial institutions and banks will require the LLC’s EIN and a copy of the Articles of Organization when opening a business bank account. In certain cases, the Operating Agreement may be required.  

4. Register for State Taxes & Licenses

Certain business types require specific licenses or registration to pay certain state taxes.

In Florida, if a business sells goods, it may need to register for sales tax with the Florida Department of Revenue. 

Further, certain professions such as those in the legal, insurance and medical fields, require state-issued licenses associated with the LLC. 

It is imperative that owners of any LLC affected by these requirements ensure they are compliant.

5. Annual Report Compliance

Each year, Florida requires LLCs to be updated by filing an annual report to remain in active status with the state.

This report, which is usually accompanied by the payment of a fee (currently $138.75), confirms the LLC’s information, such as those authorized to act on its behalf, the name and address of its registered agent, as well as the primary and mailing addresses of the entity. 

The reports are due each year between January 1^st and May 1^st and carry severe penalties for late filings. Failing to file an annual report entirely may result in the entity being administratively dissolved. 

6. Local regulations, Licenses & Permits

It is imperative that each LLC comply with local city and county regulations.

For example, most cities and municipalities require local business licenses to be issued, zoning permits for certain types of businesses, as well as adherence to operational guidelines.

Checking with local government offices for the list of local requirements should be done early on in the entity formation process to avoid inadvertent periods of non-compliance.

7. Record Keeping

Maintaining proper records throughout the lifetime of the LLC is very important for its success and compliance.

Oftentimes, business owners overlook the importance of record keeping when considering what to do after forming an LLC. 

But, proper records allow for the smooth ongoing operation of the LLC, as well as can also be very helpful in the event of a dispute amongst owners, tax or compliance audits or legal proceedings.

Each LLC should have, at the very least, the following records readily available at all times:

• Articles of Organization
• Operating Agreement
• EIN confirmation letter
• State and local business licenses and permits
• Financial statements and tax filings

8. Business Insurance

There are a vast number of insurances that any LLC may need prior to operating and offering services to the public.

Business insurance can safeguard an LLC against unexpected liabilities such as premises liability, errors and omissions or even product liability.

While it is advisable to contact a licensed insurance professional to determine the specific type of coverage needed by a particular LLC, some common types of business insurance are:

• General liability insurance
• Commercial Property insurance
• Professional Liability insurance
• Workers’ Compensation insurance

9. Trademark Registrations

While most small businesses overlook this aspect, having a registered trademark can be invaluable to an LLC.

While the trademark process is rather arduous, it is imperative that each LLC analyze its trademarks, logos and slogans to ensure there is no infringement of existing registered marks.

Receiving a cease and desist from the owner of an existing registered mark can be devastating to the success of a start-up LLC.

However, if no similar marks are located, it is advisable that the LLC move forward by securing its own registration.

10. Marketing Considerations

While the marketing efforts are unique to each LLC, it is important that a comprehensive plan is developed early on.

Many LLCs utilize media such as websites, social media platforms etc. in their marketing plans.

While these efforts may be crucial to increasing brand awareness and attracting new clients, it is important that they are done within the confines of the law. 

Marketing should never be misleading or infringe on the copyright, patent or trademark rights of others.

Those developing a marketing plan for an LLC should work closely with their legal professionals to ensure this. 

Conclusions on What to Do After Forming an LLC in Florida

While these steps as just a few of what can be expected when starting an LLC, they provide any new entrepreneur with a good foundation.

Significant research into each step is required.

Consulting with professionals such as business consultants, attorneys and accountants will provide valuable insight to best support an LLC’s success.

To learn more about how we may assist with the drafting of an Operating Agreement or registration of a trademark, contact us to schedule a complimentary call with one of our legal professionals.