Page 32 - Akerman | 2016 Guide to Doing Business in Florida

For more information on taxation of business entities, see Chapter 5 of this Guide [Taxation].

3.2 Florida Limited Liability Companies
3.2.1 Introduction and Note about New LLC Law

An increasingly popular form of business entity is the limited liability company (“LLC”), which
combines some of the most favorable characteristics of both partnerships and corporations to
provide its principals with greater flexibility in structuring their company to achieve business and
tax objectives. Members of LLCs enjoy protection from direct claims of creditors of the LLC
analogous to a corporation, paired with the ability to be treated for tax purposes as a
disregarded entity and afforded the pass-through taxation option of a partnership. When an
LLC elects to be treated as a disregarded entity for tax purposes, income and expenses are
reported as though the members incurred them directly, and profits or losses are taxed at the
ownership (individual member) level rather than at the entity (company) level. Ownership of an
LLC is vested in members rather than shareholders, and members can be individuals, for-profit
organizations, or not-for-profit organizations.

Under the Florida Revised Limited Liability Company Act (“FRLLCA”), a limited liability company
can be organized for any lawful purpose but remains subject to the statutes and regulations of
the State of Florida for regulating businesses. For purposes of Florida law, a limited liability
company is considered a separate legal entity or “person.” This separate status ensures that,
absent certain circumstances, the members of the limited liability company are not responsible
for repaying the debts and obligations of the company from their personal assets. The FRLLCA
governs the formation, operation and dissolution of limited liability companies in the State of
Florida, and general supervision is provided by the Department of State, Division of
Corporations, P.O. Box 6327, Tallahassee, Florida 32314, http://www.sunbiz.org.
3.2.2 Formation

One or more persons or entities may form a limited liability company by filing Articles of
Organization with the Department of State, Division of Corporations. Owners of an LLC are
referred to as “members,” and an LLC with one member is a “single-member LLC” and is
afforded the same pass through tax treatment as an LLC with two or more members but
treated as a sole-proprietorship rather than a partnership. Articles of Organization must be filed
by one or more members or authorized representatives of the LLC. The current filing fee is
$125. Forms and instructions specific to each type of Florida entity are available at
http://www.sunbiz.org, and filing can be completed electronically.

An LLC exists and is effective at the time of the filing of the Articles of Organization, unless the
Certificate of Formation provides for a future effective date.

The Articles of Organization must contain the following information:

a. Name of the Limited Liability Company. The name of the LLC must include in
it the words “Limited Liability Company,” the abbreviation “L.L.C.” or the
designation “LLC” as the last words of the name of the LLC. The Division of
Corporations has interpreted this to prohibit the use of any other entity
designations, even if accompanied by a “LLC” reference (such as “XYZ LLC
Co.”). The name may not imply that the LLC is organized for a purpose other
than that of an LLC, may not imply that it is connected to a government

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