Florida is one of the most heavily populated states in the country, with a unique blend of cultures and a heavy tourism industry. You can start and succeed in even the most niche business as long as you have some know-how and the drive to succeed.
The first hurdle you have to clear, though, is getting started. That takes money, though not as much as you might think. We’re here to help you figure out where you need to spend money, as well as optional purchases you’ll want to make that can make your life easier, both now and in the future.
This article will help you make a budget for starting an LLC in Florida.
- The required costs for every LLC
- Extra costs we recommend you incur
- The different ways you can form your LLC, as well as the pros and cons of each
Total Florida LLC Cost – $125
The Florida Division of Corporations says that, at a minimum, you need $125 to form your limited liability company. This amount is composed of:
- Articles of Organization Filing Fee: $100
- Registered Agent Fee: $25
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How Much it Costs to Start a Florida LLC
Knowing the numbers is one thing. But to make the best decisions for your company, you need to know the reasons behind the numbers, and why it will sometimes make sense to spend a bit more than you have to.
Articles of Organization Filing Fee – $100
Your LLC's articles of organization create the company. Without articles, your limited liability company doesn’t exist. After they’ve been filed, your company can buy, sell, borrow money, and conduct other lawful business. Thus, making sure that you have the document correctly drafted and filed is your first major step.
If you think drafting your Florida articles of organization sounds too complicated, don’t worry. The Florida Division of Corporations provides a fill-in-the-blank form, complete with a cover letter, on its website.
Of course, if you, your LLC formation service, or your attorney want something more involved, you’re free to draft your own. But keeping things simple with the state’s form is a good way to get started.
Resident Agent Fee – $25 (plus optional $100/year for a resident agent service)
Every state has some version of a resident agent law. Florida’s no different. A resident agent is a person or company you name that makes their address publicly available. You need to have a resident agent so that, if the state or someone else needs to contact your company, there is one place they can always go.
This also means that your agent will receive the legal papers if your LLC is ever sued. Florida charges you $25 to name a person or company as your agent in the public records.
You’ll have to pay to change that decision later, so make sure you choose wisely. Many owners are tempted to serve as their companies’ agents. This is usually not a good idea. It involves making your address public and being constantly available just in case someone wants to sue your company.
It’s an easier and cost-efficient plan to hire a Florida registered agent service for your company. These agents usually charge $100 per year and take care of all your company’s registered agent needs. It’s money well spent.
Florida LLCs – Optional Costs to Consider
The fact that $125 is the minimum you need to get off the ground doesn’t mean you shouldn’t plan on spending more. There are several costs you should also plan for to give your LLC the best start it can get.
Operating Agreement — Variable
An operating agreement sets down the rules of your LLC. It says how the people in charge should do their jobs, when meetings must be held, how members can enter and exit the company, and almost any other matter you might need to address.
Florida won’t force your LLC to have an operating agreement if you don’t want one, but we strongly recommend that you consider it. Without one, you have much less control over what happens to your company when something unexpected happens.
If you choose to have an operating agreement, you don’t have to file it with the state. You can write it yourself, but unless you are a lawyer or know exactly what it’s supposed to look like, we don’t recommend that option.
A lawyer would likely charge you by the hour for drafting a Florida LLC operating agreement. While that agreement would likely be a good one, that could also run you at least a few hundred dollars. You can have a good agreement drafted, though, for as little as $39.
DBA fee — $50 (plus around $100-$300 newspaper publishing fee)
The name on your LLC’s legal paperwork isn’t always the name you want in front of your store or office. Maybe you want to show that you’ve gotten a well-known person to manage your business. Or maybe you want to make sure that people don’t confuse your LLC with a competitor.
In cases like this, a fictitious business name, or DBA (“doing business as”) name, can help. Getting one is a very common procedure that won't take you too long. Florida’s Fictitious Name Act sets down the requirements for a DBA in Florida Statutes section 865.09.
Once you’ve thought of the perfect name, you will have to register that name with the Division of Corporations using their website. LLCs also have to publish their DBAs in a local newspaper where they are located. If you have multiple locations, you will have to publish in multiple papers. Prices vary but expect to pay $100 to $300 per ad in each paper.
Name Reservation Fee — $25
Maybe you have a great business plan and the perfect name for your company, but you’re not quite ready to start the business. If you want to make sure that a certain business name is still available, you can send a letter to the Secretary of State asking for the exact name and stating the name and address of your LLC.
Once the Secretary of State receives your letter, the reservation will be good for 120 days. The price for a reservation varies based on the entity, but LLCs always cost $25.
Domain Name — about $20 per year
In this day and age, small businesses need a presence on the Internet. The first step in creating a good website is to get your own domain name. While this might have been pricey in the past, it is now quite affordable.
You should secure your domain name as soon as possible, even if you don’t have plans for a website right now. If you don’t, a competitor could buy your ideal domain and its variations to block you from using them. Domain squatters also sift through newly registered LLC names and will buy their domains only to relist them with huge markups.
In general, a domain ending in .com will be more expensive than a .net or .info domain, and some names will likely be taken, meaning you will have to do some searching (and maybe compromising).
A domain name from GoDaddy.com or a similar registrar may cost you between $20 and $50 per year, with regular specials and sales where you can get substantial discounts.
Registering with the State Tax Office — Free
All businesses need to register with the Florida Department of Revenue so that they can pay the necessary taxes, like sales and use tax, franchise tax, and employer taxes. The state further provides a handy summary of all taxes and fees your LLC can pay using the electronic system.
For further details about any amounts that could be due for your specific LLC, contact the Florida Department of Revenue.
Getting an Employer Identification Number (“EIN”) — Free
A federal employer identification number is a number created and assigned by the Internal Revenue Service to a business for paying taxes. (Think of an EIN as a social security number for a business.) Some LLCs need them and some don’t.
Regardless of whether the IRS says you need one, we recommend that you get an EIN. Many banks won’t allow your company to have its own account without one. Having an EIN can simplify the process of getting credit.
You can apply online and get an EIN for free in minutes, or you can apply for one through the mail or fax. Whatever you do, don’t pay someone else to get an EIN for you. It’s too easy to pay someone else to do it unless it is part of a broader service package.
Foreign LLC Qualification Fees — about $100 per extra state
If your business starts doing well, you may want to expand to new locations. If one of those places is in another state, you’ll have to pay for the privilege of doing business there. You won’t have to re-form your business, but you will have to register with the Secretary of State there and pay some extra fees.
The exact fees will depend on the state in which you are registering. As a rule of thumb, expect to pay about $100 in filing fees to register your limited liability company as a foreign LLC in another state.
Writing Formation Costs Off
The formation costs we are talking about are a necessary part of forming your Florida LLC. For that reason, they can be deducted from your taxes as business startup costs.
The IRS has a lot of guidance on this matter, and you should compare your specific costs to the materials on the IRS website.
Keep in mind that, in most cases, an LLC is taxed as a pass-through entity. In other words, your income and deductions will go on your personal taxes, rather than a separate income tax for the LLC. The IRS allows LLC owners to deduct $5,000 of their business startup expenses in the first year.
Florida, on the other hand, does not have a state income tax, so that is one thing less you will have to worry about in this state.
Carlos forms an LLC in Miami to run his Cuban food truck. He names his LLC Ropa Vieja LLC. He does all the driving, cooking, and selling of the food himself.
When picking a resident agent, Carlos wisely decides that he does not want to get legal papers served to him at his apartment, so he decides to hire an outside company to serve as his LLC’s agent. His cousin has also indicated that she might buy into the business, so he decides to draft an operating agreement saying how the LLC can admit new members.
As he is designing the food truck, Carlos realizes that Ropa Vieja is a very generic name for a Miami restaurant, and he wants to make sure people remember him specifically. He, therefore, decides to get a DBA so he can use the name Ropa Vieja de Carlos. After registering the DBA, he will pay $150 for the local newspaper to publish a notice.
Finally, to get the word out about where his food truck will be from day to day, Carlos also buys his web domain.
His formation costs are as follows:
- Florida LLC Articles of Organization: $100
- Florida resident agent fee: $25
- Resident agent company fee (first year): $100
- Florida LLC Operating agreement draft: $39
- DBA fee: $50
- DBA publishing fee (local newspaper): $150
- Web domain costs (first year): $50
For income tax purposes, the IRS will tax Carlos directly. In other words, Carlos will get income from the LLC, and from that, he will pay his personal federal income taxes. Thus, Carlos will report both his income and deductions for the business on a Schedule C to his federal tax return.
The total amount of Carlos’s deduction in this example is $514. Before the deduction, his total taxable income for the year was $35,000. After the deduction, the taxable income went down to $34,486. Because Carlos is in the 12% tax bracket, that means he saved $61.68 in taxes this year, in addition to whatever other deduction he may have had.
Keep in mind that if Carlos had more than $5,000 in expenses, he would likely be able to claim those, but not all in the first year. Instead, he would have to break out his deduction over multiple tax years.
Cheapest Way to Start an LLC in Florida
Understanding the nuts and bolts of LLCs is one thing. The main question you want answered is what the cheapest way is to get your LLC formed while still accomplishing all you need. Here are your options.
LLC Formation Service – $39 + state fees
A business formation service is a popular and inexpensive way for new LLC owners to get started.
These companies are dedicated to helping entrepreneurs bring their visions to life. They have not only the knowledge of all the state laws you need to know, but also forms, documents, and procedures to make your life as easy as possible.
Formation services are quick and complete ways to handle formation needs for most LLCs.
- They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
- They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
- They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
- They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.
While formation services can be great for most people, they are not always the best choice. Some cons for these services are:
- They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
- Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
Attorneys are licensed, reliable, and powerful resources for business formation. They are also quite expensive. While Carlos’s food truck might represent his passion, his annual income is not very high, especially when one considers the overhead from his business. He doesn’t have the money to pay a lawyer $500 per hour for LLC formation!
A business owner with more money than Carlos, though, could benefit from having an attorney if their business was at all complicated. For that reason, some owners choose to go this route.
Despite the expense, sometimes hiring a lawyer is the best choice.
- Lawyers help you manage risk. An LLC with complicated legal issues needs a lawyer. In Carlos’s example, let’s say that he wanted to start an import/export business and work with some of his contacts in Cuba. Given the legal situation with that country, he’d need a lawyer to figure out how to operate.
- Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.
For most people, getting an attorney comes with considerable downsides that outweigh any benefits.
- Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
- Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
- Lawyers also take longer to form a business than a formation service. Because lawyers are also very caring people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.
Do it Yourself
Many people, after searching the Internet for the information they need, decide to try forming their new LLCs themselves. This process can give you a lot of personal expertise, but remember that time is money. If you are spending hours on your business formation, that’s time you’re not spending on the substance of your business.
In most instances, then, it is more cost-effective to just pay an LLC formation service, with confidence that everything has been done correctly, rather than try to reinvent the wheel yourself.
- Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
- It costs less upfront. If you don’t figure out the value of your time, a DIY solution is the cheapest option.
- You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
- There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that then costs them more time and money.
- It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.
Annual Florida LLC Fees: How Much Will it Cost to Maintain your LLC?
Even after you’ve formed the company, there are annual costs for which you will have to budget. These include both government fees and amounts paid to third parties, like:
- Local Business License, depending on exact location: $50-$100
- Annual report fee: $138.75
- Registered agent fee: $100
- Domain name: $20
Make sure you file your LLC’s annual report by May 1 every year. If you don’t, you’ll have to pay a late fee of $400!
Also, keep in mind that any small business should have an accountant. Costs for accounts vary significantly, but you should spend an average of $2,000 to $3,000 per year on an accountant in most cases.
How Much are LLC Taxes in Florida
As noted above, Florida does not have a state income tax. If you’re an LLC owner, you are also in luck because Florida does not impose a franchise tax on LLCs.
You will, however, have to pay other taxes associated with your business. For example, if your LLC hires workers, you will have to pay employment taxes. If it sells goods and services (and it almost certainly will), you'll also have to collect sales and use tax.
The Florida Department of Revenue will have complete information about any taxes you’ll have to pay.
Florida LLC Formation Costs Quick Links
- Articles of Organization (Form)
- Department of Revenue — Information for Businesses and Employers
- Department of Revenue — New Business Start-Up Kit
- Department of Revenue — Taxes, Fees, Remittances, and Reports with Electronic File and Pay Requirements
- Division of Corporations — Annual Report Instructions
- Division of Corporations — Document Processing Dates
- Division of Corporations — Entity Name Reservation FAQs
- Division of Corporations — Fee Schedule
- Division of Corporations — DBA Registration
- Florida Statutes Section 865.09 — DBA Registration
- IRS information regarding the federal tax treatment of LLCs
Florida LLC Formation Costs FAQs
How much does it cost to start an LLC in Florida?
The minimum cost is $125. This includes both the $100 filing fee for your articles of organization and the $25 fee for the registration of your LLC’s registered agent.
What is the cheapest way to start an LLC in Florida?
A do-it-yourself approach will have the lowest price tag, but it isn’t the cheapest in terms of your time. The best balance of price and time, for most people, is to use a formation service.
Do I need to hire an attorney to form an LLC in Florida?
No. Most people will not need to invest the considerable expense and time of hiring a lawyer. A formation service or a DIY approach will work for most business owners.
Can I pay to form an LLC more quickly in Florida?
Yes. Formation services will generally complete formation tasks faster than business owners acting on their own. Unlike other states, Florida does not have an expedited service option for filing, so if you want it done quickly, you should hire the best people to help you.