Are you starting a business and considering the different business structure options, wondering how much it costs to create and manage an LLC?
Millions of business owners have chosen to form a limited liability company (LLC) when transforming their entrepreneurial dream into a reality. Between the flexibility of management and limited liability protection to pass-through taxation, it’s no wonder that LLCs are such a popular choice.
So, how much does it cost to form a Florida LLC?
LLC fees are based on the registration state, and the cost to form and maintain an LLC will be guided by your choice of state. If you’re considering beautiful Florida to be the legal home of your business, then stay tuned to learn how much an LLC costs in the Sunshine State.
Why choose to form an LLC?
Before we dive into the fees associated with running an LLC, let’s explore why an LLC is such a popular option for businesses. The US-based business structure is a legal entity that allows business owners to operate according to state regulations. It offers many benefits which protect business owners from liability, offers pass-through taxation, and more.
Consider the following benefits of forming an LLC in Florida.
An LLC doesn’t have a specific federal tax classification. Instead, owners can adopt the tax status of a sole proprietorship, partnership, S corporation, or C corporation — depending on which suits them best.
In the process, an LLC offers several tax advantages, such as pass-through taxation, meaning that the LLC does not pay any corporate taxes. Instead, the LLC’s income and expenses pass through to the owner’s personal tax returns. As the owner (or owners) only pay personal income tax on profits, the business income is only taxed once.
Other tax advantages include tax deductions for business expenses and no taxes for non-US trades or businesses.
Unlike a sole proprietorship or a partnership, an LLC is a separate legal business entity from the business owner. In the unfortunate instance that the business is sued, defaults on a loan, or comes to be in a tricky situation, then the business owner’s personal assets are protected.
An LLC offers ownership and management flexibility, as well as flexible profit distributions. For example, LLCs offer pass-through taxation benefits regardless of the number of owners and the role that they play.
The LLC management structure is also flexible, giving LLC owners more choices on how they run the business. For example, an LLC can adopt a manager-managed approach or a member-managed approach.
The flexibility of ownership and management has a knock-on effect on profit distributions. Owners are not required to distribute profit share equally. Instead, profits can be allocated based on their own deductions, taking labor and financial contributions into consideration.
Easy to form and manage
Forming an LLC involves limited paperwork, much of which can be managed efficiently with the help of a registered agent. There is also less admin involved in the continued management. For example, corporations hold annual shareholder meetings, make LLC annual reports and pay annual fees to the state, an LLC has fewer administrative requirements and record-keeping demands.
Filing fees, recurring fees, and other costs
The overall cost of forming (and maintaining an LLC) will depend on the registration state. There are several costs and considerations involved in choosing the best state for your operation. While the fees and costs differ across states, lower fees do not necessarily mean that you should choose to form your business in the more “affordable” state.
There are two main fees to consider when running an LLC, along with several other expenses that add to the total cost.
LLC filing fee
An LLC filing fee is a one-time payment made to the chosen registration state. The filing fee is also known as the Articles of Organization or the Certificate of Formation. Filing fees and recurring fees differ from one state to another. For example, Massachusetts is the most expensive state to form an LLC, with a filing fee of $500. In contrast, Mississippi and Nevada only charge a filing fee of $50.
The Articles of Organization is just one of several business formation documents needed to start an LLC. Other documents include an IRS Form SS-4, an LLC name reservation application, Operating Agreement, initial and annual reports, and tax registrations. An expert RA agency relieves business owners of the time needed to manage these documents, freeing up time for other growth-orientated business tasks.
The recurring fee is a mandatory fee paid on an annual or biennial basis, ensuring that the LLC remains compliant. The total amount of the recurring fee is paid to the state and used to ensure that the LLC is operating in good standing. Failure to make this payment will lead to the LLC being shut down.
Again, the recurring and filing fees fluctuate from one state to another, and an affordable filing fee does not suggest an affordable recurring fee. For example, the filing fee in California is usually only $70 (and free until June 2023), but the recurring annual fee is $800.
Employer Identification Number (EIN)
An EIN is a nine-digit number unique to your business, functioning similarly to a Social Security number for tax purposes. An EIN is used to open a business bank account, apply for business licenses and permits, and file tax returns. While it is free to apply for an EIN, some websites offer a fee to process the application, and this amount can cost anywhere between $75 to $150.
Although an LLC protects a business owner’s assets, business insurance offers an additional layer of protection to the LLC. In the instance of property damage, liability claims, and other out-of-pocket expenses for costly damages, business insurance can save the day.
Different types of business insurance exist, such as property damage, legal liability, and employee-related risks. Small business insurance can cost anywhere from $14 to $124 per month, but business insurance costs are not a one-size-fits-all situation. A professional lawyer can advise on which business insurance is relevant to your industry and operation. Depending on this insight, the cost of business insurance may vary.
A registered agent (RA) makes a business owner’s life much easier. The service is responsible for all legal correspondence and managing all official legal documents on behalf of the LLC. The RA provides a physical address in the registration state and is available during business hours to accept all important documents.
While the business can act as its own RA, many businesses choose to hire a professional service, benefiting from added privacy, expertise, and professionalism. The cost of an RA service ranges and can reach up to $300 or more per year.
At doola, we offer expert services for only $197 per year, meeting your LLC compliance and RA needs at an affordable rate.
Registering for local licenses and permits
Depending on the nature of the business, there are different types of business licenses required to operate legally. The LLC’s industry and range of services will determine whether you need to obtain a local, county, state, and/or federal business license.
In addition, businesses that hire licensed professionals may also need a business permit. This is commonplace in businesses that work with the likes of doctors, lawyers, daycare providers, and accountants.
The cost of a business license or permit depends on various factors such as license type, location, processing fees, and recurring fees. Generally, a business license costs between $50 and several hundred dollars (plus renewal fees).
The following costs should also be considered potential expenses when forming an LLC.
- Doing Business As (DBA) is a “fictitious name” that differs from your registration name
- Newspaper publication fees may apply, publishing notice of the LLC’s formation and the cost can range from $100 to over $1,000
- Online fee for online filing is applied by some states
- Branding and logo services
Florida LLC costs
The above-mentioned costs are relevant when forming a Florida LLC, among other fees. As a starting point, consider the following general costs associated with forming an LLC in Florida.
The LLC filing fee in Florida is $100, which is paid to the Florida Division of Corporations once-off. In addition, the cost for a registered agent is $25, bringing the total filing fee to $125. In most instances, the filing fee is the largest in forming an LLC.
In Florida, the fee for your annual LLC report is $138.75, which must be paid on time, or there may be financial repercussions (approximately $400 fine).
If you plan to conduct business under a different name than the one used during formation, then a $50 fee must be paid to the Florida Division of Corporations. The DBA is valid for five years, after which it must be renewed.
- Florida Registered Agent service
There is no set fee for registered agent services, and the exact amount will depend on the services offered. Typically, the cost of RA services in Florida ranges between $50 to $500, paid annually. At doola, we offer our expert services for only $197 per year, benefitting your business in more ways than one.
Whether you use an in-house or outside service as a registered agent, Florida has a mandatory registration fee of $25 (included in the filing fee above).
- Registration fee for a foreign LLC to register in Florida
If you own an LLC in a different state and plan to expand your operations to Florida, you must register a foreign LLC. The process involves filing the Application by Foreign LLC for Authorization to Transact Business in Florida and paying the $125 fee.
- Business license or permit
Also known as a business tax receipt in Florida, the cost of a business license is determined by locality. The one-time fee costs between $50 and $100, and the license must be renewed yearly. Specific permits and licenses needed to remain compliant may differ, and proper research must be conducted to acquire the necessary permit.
Key financial considerations when forming your Florida LLC
As you can see, there are many moving parts to consider when calculating the cost of forming and managing an LLC in Florida. In addition to specific business licenses, newspaper publications, and more, the following considerations should be kept front of mind when forming an LLC in Florida.
- The tax benefits of forming an LLC over another business structure can help a business save money along the way
- Consider the cost of time involved in launching an LLC and how RA services can free up time to focus on more important tasks
- Make sure that you include all LLC fees in your budget projections to avoid a sticky situation
- Research any recurring fees and make a note of the relevant payment date
- As a US resident, consider whether a domestic or foreign LLC filing works best in your favor (including the costs)
- As a non-US resident, consider whether Florida is the best registration state for you or whether a more affordable state is better suited
Forming an LLC with doola
At doola, we streamline the cost of forming an LLC with our friendly and professional services. Our safe and cost-effective services help aspiring business owners form an LLC in Florida without administrative headaches or issues with compliance.
Our reliable LLC formation services cost $197 plus relevant state fees. Not only does this fee cover the formation services, but it also includes the following benefits, helping to make life easier.
- Obtain an EIN
- LLC Operating Agreement
- Virtual mailing address
- One year free RA
In addition to these useful services, we also offer insight into how long it takes to get your LLC up and running.
With doola, we help with each step of the journey, from forming your LLC to applying for a US bank account and more. By streamlining the process, we help business owners transform their dream into reality in as little time as possible.
Are you interested in learning more about LLC formation and tips on navigating the process? doola resources empower founders, aspiring entrepreneurs, and business owners to make strategic decisions!
For only $197 plus state fees, doola offers a highly competitive service with optimal value. Our team is ready to help you form your LLC in Florida – are you?
Get started with doola today!