Florida in September 2016: what the formation actually costs
A $125 filing bill, a $138.75 annual report, and a 2013 statute that quietly fixed the state's most famous LLC problem
Contents 4 sections
Florida LLC costs $125 to form and $138.75 a year to keep. Those are the two numbers that matter. Everything else — Sunbiz's turnaround times, the Olmstead fallout, the rental-property structures that push most Floridians into the single-member form, the May 1 deadline that triggers a $400 penalty if you sleep through it — is texture around those two numbers.
This is a guide for someone forming in Florida in September 2016, written to survive one reading rather than thirty. If you live here, or hold property here, or are thinking about retiring here and want your holdings to follow, this is the state you are already closest to.
The mechanics
You file Articles of Organization with the Division of Corporations — the office most Floridians know as Sunbiz, after the domain where the forms live. Sunbiz sits under the Department of State. The form itself is short: the name of the LLC, its principal office address, the mailing address if different, the registered agent's name and Florida street address (a P.O. box will not do), and the signatures of the authorized representative and the registered agent accepting the designation.
The bill is $125 all in: $100 for the Articles and $25 for the registered-agent designation. Those are statutory and do not move with the type or size of the entity. Electronic filings through Sunbiz clear in roughly two to three business days in the ordinary course; mailed filings take longer for reasons that have more to do with the mail than with Tallahassee. There is no premium expedite tier of the Delaware variety. If you need an entity today, file it today and plan around the queue.
You will also need an EIN from the IRS, which takes about as long as filling out Form SS-4 online. Florida does not require you to file an operating agreement and does not ask to see one, but the 2013 Revised LLC Act — codified at Chapter 605 of the Florida Statutes and in force since January 2014 — presumes that members have actually sat down and agreed on how the thing will run. A single-member LLC can get away with a short one; a multi-member LLC that skips the exercise is choosing to let Chapter 605's default rules settle disputes it did not anticipate.
For federal tax purposes you make the usual choice: disregarded entity (single-member default), partnership (multi-member default), S-corp, or C-corp. Florida levies no personal income tax, which is part of why people form here in the first place. Corporations pay Florida's 5.5% corporate income tax; LLCs that have not elected C-corp treatment do not.
Maintenance is where people get it wrong
Florida requires an Annual Report from every LLC, due between January 1 and May 1 each year. The fee is $138.75, and it does not move with revenue, members, or activity. You file it through Sunbiz. The form is mostly a chance for the state to confirm that the addresses and the registered agent on record are still correct; if nothing has changed, you are paying $138.75 to click through four screens and certify so.
Miss May 1 and the fee becomes $538.75 — a flat $400 late penalty layered on top of the ordinary report fee, with no grace period and no proration. Keep missing it and the Division administratively dissolves the LLC in the fall, which ends the entity's capacity to sue, to defend, and in practice to transact on its own paper until it is reinstated. Reinstatement costs more again, plus every missed annual report back to the year of dissolution.
The notice Sunbiz sends goes to the email address on file. If that address is the accountant who left two years ago, you will not see it. This is responsible for a large share of the reinstatements the Division processes every summer. Put the May 1 deadline in a calendar that will survive staff turnover.
The registered-agent market, and the Olmstead question
Every Florida LLC needs a registered agent with a Florida street address who has signed the designation on the Articles. Commercial providers run from roughly $50 a year at the commodity end to several hundred at the full-service end. Individuals can serve as their own agent, and many sole members do; the tradeoff is that the address goes on the public record and the agent must be reachable during business hours.
The more consequential question for a Florida LLC, and the one that distinguishes the state's case law, is what the charging order is actually worth. In 2010 the Florida Supreme Court decided the Olmstead case and held that a judgment creditor of a sole member of a single-member LLC could reach the LLC's assets directly, rather than being limited to a charging order against distributions. That ruling undid a lot of asset-protection planning that had assumed Florida single-member LLCs worked like multi-member ones.
The legislature responded. The charging-order provision of the 2013 Revised LLC Act — Fla. Stat. § 605.0503 — restored charging-order exclusivity for multi-member LLCs and, for single-member LLCs, narrowed the Olmstead remedy by statute. The short version for planning purposes: multi-member Florida LLCs now sit on roughly the ground professionals assumed before Olmstead, and single-member Florida LLCs sit somewhere less protective than that. If asset protection is the reason you are forming, it is worth knowing which side of that line you are on before you file.
Who this state actually makes sense for
Three kinds of entities belong in Florida in 2016.
The first is anyone who lives here. The no-income-tax arithmetic is the whole point of domicile for a large share of the state's new residents, and forming the operating entity at home keeps it simple. Forming a Delaware LLC to run a Tampa consultancy means registering the Delaware LLC as a foreign entity in Florida anyway, which means paying $138.75 every May 1 to Sunbiz on top of the $300 Delaware tax every June 1. Two deadlines, two sets of fees, one operating business.
The second is anyone holding Florida real property. A Florida LLC on title in a Florida county is the cleanest possible alignment between the asset, the entity, and the forum that will hear any dispute about either. Retirees who have acquired two or three income properties over the years tend to end up with an LLC per property, each with a Florida address and a Florida registered agent, for reasons that are mostly about insurance, estate planning, and keeping the tenants of one unit from suing into the equity of another.
The third is the retiree with a holding structure — a revocable trust as the member, a Florida LLC as the operating vehicle, and assets that have followed the owner south. The domicile and the entity live in the same state, and the probate court is the same one that would adjudicate anything else.
Everyone else should think twice. An out-of-state operator who forms in Florida because Florida sounds friendly will still have to register as a foreign entity at home, pay both sets of annual reports, and litigate disputes in the home state anyway. The Florida advantage is largely captured by being in Florida. If you are not, the savings shrink fast.
If you are forming this quarter and you live in the state, file with Sunbiz this week, pay the $125, and put May 1 on two calendars. If you are forming from out of state because someone told you Florida was a good pick, ask why your home state was not the answer first.