Understanding the costs of starting a business is necessary before you set off on your new venture.
Or else you risk underestimating the operational costs and tax obligations associated with a specific business structure.
A Florida LLC (limited liability company) is an excellent option for new businesses because it provides the benefits of both corporations (limited liability protection) and sole proprietorships/partnerships (pass-through taxation).
Get to know the costs and state fees associated with the LLC formation in the Sunshine State.
Table of contents
- Florida Limited Liability Company (LLC) costs overview
- Florida LLC filing fee: $125
- Registered agent cost in Florida
- Florida annual report fee: $138.75
- Name reservation fee in Florida
- Fictitious name registration (DBA) in Florida
- Business license and permits
- Legal fees
- How much does an LLC cost in Florida?
Florida Limited Liability Company (LLC) costs overview
When you register an LLC in the state of Florida, you’ll face mandatory and optional costs.
To form your Florida LLC, you’ll have to pay:
- State filing fee — $100
- Registered agent fee — $25
- Annual report fee — $138.75
- Name reservation fee — $20
- Fictitious name registration (DBA) — $50
- Business license and permits — vary.
Florida LLC filing fee: $125
An LLC filing fee is a one-time business registration fee paid upon business incorporation. Another moniker for it is filing the articles of organization.
The fee includes a state levy for registration ($100) and a $25 registered agent fee. For an additional $30, your new LLC can receive a certified copy of the articles of the organization. It’s optional but advisable.
In Florida, you can apply for LLC registration online or by mail. However, if you want to register an LLC formed outside of Florida with the local authorities, you can only file for foreign LLC formation in person. Otherwise, foreign LLCs are governed by the same compliance and filing requirements as domestic ones.
Do you need an operating agreement in Florida?
No, it’s not mandatory by Florida law. But it’s good to have one.
The operating agreement defines the rules and structure of the LLC. If there’s ever a dispute between owners, the operating agreement is the first reference for attorneys. It can also outline aspects such as member withdrawals, profit allocation, decision-making rules, and so on.
Some banks may also require an operating agreement to open a business bank account.
Do LLCs pay taxes in Florida?
Florida does not impose a state income tax. Meaning if you file your tax returns as single-member LLCs (disregarded entities for tax purposes), partnerships, and S corporations, you don’t have to pay a state-level income tax.
Instead, you only pay federal taxes and file personal returns with the IRS.
However, if you choose to get taxed as a C corporation, you’ll have to pay a 4.458% corporate tax rate (until 12/31/2021) and file form F-1120 with the Florida Department of Revenue. Also, depending on your type of business, you may need to pay a sales tax. The standard rate is 6%.
Registered agent cost in Florida
You’ll have to pay a one-time $25 fee to the government for listing someone as a registered agent. Anyone aged above 18 with a physical address (PO boxes won’t work) can serve as a registered agent. The caveat, however, is that you need to be always available to accept service of process documents in case of some legal calamities. That’s why many businesses choose to hire a registered agent service which usually costs between $67 to $150 per year.
Can I be my own registered agent in Florida?
Yes. As your own registered agent, you do not have to pay any fees. But the downside is the lack of privacy. Law enforcement or aggressive attorneys would go directly to you if you were to receive a summons or lawsuit.
Another downside is that you need to be available during business hours. If you travel often, this could be an issue. That’s why many small businesses opt for a professional service.
Florida annual report fee: $138.75
The annual report is due by May 1st.
If you file on time, the standard fee is $138.75. You can submit a report online. You can also request a certificate of the status report (optional) for a fee of $5. It’s required by some regulatory bodies to prove your business entity is in good standing with the state.
If you file your annual report after May 1st, a late fee of $400 is imposed.
Contents of the annual report
- Name of LLC
- Principal Place of Business Address
- EIN (Employer Identification Number)
- Registered Agent or Registered Agent Office
- Manager(s)/Managing Member(s)
- Signature of One Manager or Managing Member.
Filing an annual report in Florida requires the items above. Before this information is entered, the Florida Division of Corporations, the website will ask for your business registration number. If you do not have this, you can use the search tool.
When listing the name of the manager(s) or managing member(s) above, the online form will only accept six names. If there are more than six names, you must call the number listed in the annual report help document for special filing instructions.
Unlike California or Delaware, there are no other minimum annual taxes to file, such as franchise tax for operating a business in the state.
Name reservation fee in Florida
A name reservation fee allows business owners to retain the desired business name while working out the legal formalities of business registration. The cost is $25, and this reservation is valid for up to 120 days.
If you have found that perfect LLC name and you do not want to lose it because of associated trademarks or branding benefits, this is a small cost to pay. To reserve an LLC name in Florida, you’ll need to fill out a form containing your name, street address, and the name to be reserved. Then send it to the secretary of state.
Fictitious name registration (DBA) in Florida
A fictitious name (DBA, doing business as) allows a Florida business to operate under a name separate from its registered business name. It can be beneficial when an LLC has several product lines and wants to use different brand names. There’s an online form to complete, and the cost to register a fictitious name is $50.
Business license and permits
Different types of businesses, ranging from home inspection services to harbor pilots and private investigation, require a business license.
The two main licensing agencies are:
- The Department of Business and Professional Regulation
- The Department of Agriculture and Consumer Services
Both provide comprehensive information on the type of licenses or permits you require and associated costs. The average cost for a business license is $100.
Hiring an attorney to help with company formation can be helpful if you plan to have more than one owner in your LLC or require an air-tight operating agreement. The median hourly rate of a Florida-based attorney is $300/hour.
How much does an LLC cost in Florida?
The baseline cost to register an LLC in Florida is $125. But you’d likely incur extra fees.
Here’s a sample calculation to better illustrate the costs:
Lana plans to open a new food truck business. The name she’s decided on is Lana’s Munchies LLC.
The below calculation details how much Lana and other business owners can expect to pay when forming an LLC in Florida:
- Name reservation fee (optional, one-time cost) – $25
- Filing articles of organization and registered agent fee (mandatory, one-time cost) – $125
- Hiring a registered agent service (optional, annual cost) – $100
- Fictitious name registration (optional, renew every 5 years) – $50
- Legal fees (optional, one-time cost) – $1,000
- Business permit (a lot of industries require one) – $100
- Annual report – $138.75
|Fee||Higher-end cost||Lower-end cost|
|Name reservation fee (optional, one-time cost)||$25|
|Filing articles of organization and registered agent fee (mandatory, one-time cost)||$125||$125|
|Hiring a registered agent service (optional, annual cost)||$100|
|Fictitious name registration (optional, renew every 5 years)||$50|
|Legal fees (optional, one-time cost)||$1,000|
|Business permit (a lot of industries require one)||$100|
Higher-end LLC formation cost in Florida for the first year: $1,538.75.
Lower-end LLC formation cost in Florida for the first year: $263.75.
If all of this seems overwhelming, there’s always the option to use an LLC formation service.