About Limited Liability Companies (LLCs) in the USA
Many US non-residents are incorporating companies in Florida; some of these are operating within the US whilst others are operating entirely outside and have no connection with the US other than the registration of their company.
There are three types of incorporation, C-Corporation (C-Corp), S-Corporation (S-Corp) and Limited Liability Companies (LLC). All types offer personal liability protection to the owners so that their personal assets are not generally at risk for business liabilities. Most of our clients that are starting a service company, where the owners are the sole service providers, will choose an LLC.
For US non residents, use of an S-Corp is not possible because one of the requirements of becoming an S-Corp is that all shareholders must be US residents. If you are not an American citizen you will instead have to form a C-Corp or an LLC.
While there is no Corporate Tax in Florida for a corporation, Florida Corporation still has to file a tax return, and pay federal taxes. For many people, pass through taxation, or the ability to have their entity treated as a non tax paying entity is important. This objective can be achieved by incorporating an LLC instead of a corporation.
LLCs are easier to run (less paperwork) and you file the LLC taxes along with your own at the end of the year. Corporations have more paperwork (quarterly filings, minutes, and a board meeting), but you have a higher potential for tax savings (with employees or product sales).
If you are trading in the US, you may be subject to self-employment tax on LLC earnings, which you would not be, if you were trading and earning money through a corporation.
If you are trading in a number of states, be aware that some states do tax LLCs as companies, even though the Federal government does not.
You may be better off having a Corporation for one-off transactions. Since an LLC is considered a partnership for Federal Tax purposes, be aware of federal legislation for LLCs. If 50% is sold within a 12-month period, the LLC will crease to be a partnership for federal tax reasons.
How to Incorporate a Limited Company (LLC) in Florida
After you have submitted your chosen company name to us, approval can be obtained within several hours. You can carry out a free name check now using our Company Name check service). Any name identical or similar to an existing company within the state of Florida will not be allowed. Additionally, the use of “bank”, “trust”, “insurance” or “reinsurance” within the name of the company is prohibited; special licences and permission must be given if you require such a name. Checking a company name using our online service takes less than 30 minutes and a name may be reserved for 10 days.
For LLCs, the company name must have suffixes to denote the limited liability of your company, i.e. Limited Liability Company and Limited Company or their abbreviations LLC and LC. For corporations, the name must end with Corporation, Company, Incorporated, Limited, Syndicate, Union, Society, Club, Foundation, Fund, Institute, Association; or the relevant abbreviation such as Co., Corp., Inc., or Ltd.
Upon receiving your completed order, we will reserve the name with the state that same day or the next business day. The certificate of incorporation is prepared and filed. The state typically approves filings within seven business days from the date that the filings were received. After the state approves your filing, corporate existence begins for your company, the paperwork is returned and the completed documents will be sent to you via courier.
The general procedures after you receive filed Articles of Organisation is as follows:
- Create an LLC operating agreement, which sets out the rights and responsibilities of the LLC members.
- Issue membership certificates to members.
- Apply for EIN - Tax ID number.
- Establish a LLC bank account.
- File initial list of Managers or Members. This has to be done within 30 days after incorporation date.
After your Articles are filed, your LLC should have an organisational meeting where an operating agreement is adopted. We will provide you with the proper operating agreement template. Member certificates can be distributed to members and these transactions should be recorded in the LLC ledger. All of this information can be maintained in a limited liability company record book, which is included in our provided standard corporate kit.
It only takes three days to incorporate your company.
Formacompany has over 20 years’ experience forming companies in the USA and across the world, and our staff will be available to offer advice and support through the entire incorporation process, from initially selecting a suitable company name through to finally commencing taxable activities.
What you need to set up a Limited Company (LLC) in Florida
To begin incorporation of your exempted company we will require the following:
- Your company name
- The director/s full name, date of birth, address and nationality
- The shareholder/s full name and address
- Intended business activities
Documents you are required to provide:
- Proof of identity (passport, national identity card, photographic driving licence)
- Proof of residential address (gas/electricity bill or credit/debit card bank statement dated within the last three months)
- All exempt companies must have a registered agent and a registered office. The registered office must be a physical address in Florida as it is where documents may be legally served on the company and it serves as a local contact for the Secretary of State and other government agencies. The registered office receives notice of any suits, tax notices, etc. and then forwards them to you.
- If your registered address is in Florida you can act as your own registered agent, if you will be based outside Florida, Formacompany can provide you with a registered address as part of our Corporate Administration services.
- The names of directors are declared to the State authorities. We have to file a list of initial officers, and are obliged to file any change of officers.
- Only one director is required and a director can be of any nationality.
- Directors are generally called Managers or Managing Members in the case of LLCs.
Share Capital requirements
- There is no minimum capital requirement.
- Only one shareholder, of any nationality, is required.
What it costs to set up a Limited Company (LLC) in Florida
- An LLC in Florida will cost £760; this includes all duties, taxes and professional fees including the initial Filing Fee.
- Any entity that transacts business in Florida as a limited liability company is required by Florida Statutes to file an application for authorisation with the Division (a State Organisation) and pay the Filing Fee. All limited liability companies must file a uniform business report with the division and pay the filing fee each year.
What you receive after setting up your new business
- Minutes of the first inaugural meetings
- Copies of the Memorandum of Association and Articles of Association
- Original Certificate of Incorporation
- Share Certificates for each shareholder specified, plus two blank certificates
5 Advantages to Setting up a Limited Liability Company (LLC) in Florida
- Incorporating your LLC within Florida allows you to benefit from a host of tax incentives. Sales tax applies only to products sold within Florida and unlike many other states there is no Personal Income Tax.
- Limited Companies in Florida provides extensive confidentiality for the directors and shareholders. There is complete privacy regarding who owns or runs the corporation.
- There is no need to come to Florida. A Corporation or an LLC can be incorporated by email, fax or telephone and the person incorporating never has to visit the state, even to conduct annual meetings. Meetings can be held anywhere in the world at the option of the Director(s) or Managers.
- Only one person is required to form a Corporation or an LLC. One person can hold the offices of President, Secretary, and Treasurer and be the sole director of a Florida Corporation. Many States require at least 3 officers and/or directors. One person can be the sole Member and sole Managing Member of an LLC.
- Managers (Directors) of an LLC need not be shareholders of the company. You may solely have a nominee shareholder, which we would be happy to provide.
Important Information about incorporating a Limited Company in Florida
- As LLCs are effectively partnerships without share capital, the equivalent to the "Shareholder" is the "Member" who has a participation or share in the LLC. The names of members) are declared to the State authorities. We have to file a list of initial members, and have to file any change of members.
- It is not a requirement to appoint a local resident member.
- There is no requirement for a company secretary; all officers are called Managers, but one of these could be a designated as a company secretary.
- The company does not have to keep records in Florida. If the company chooses to keep records they can be kept anywhere in the world.
- The company does not have standard company statutes. We supply a company kit with a standard operating agreement which can be adapted and then adopted.