Lawyer's Guide to Form a Single Member LLC in Florida

As a business lawyer, I often guide entrepreneurs on how to form a single-member LLC in Florida (and in all US states).

You may also wonder if small businesses need an LLC or when to form an LLC.

Forming an LLC is a great way to legitimize your business while protecting yourself.

Unfortunately, A LOT can go wrong whether you’re a large company or run a small online business.

Forming a single-member LLC in Florida separates your personal assets from your business’s liabilities if someone ever sues you.

It essentially allows you to treat your personal life and business as separate entities.

In this post, I’ll explain everything you need to know about creating a Florida single-member LLC as a state resident and how to do so without hiring expensive lawyers.

As a Florida resident and attorney myself, I’m sharing my best tips to make this whole process super easy and stress free.

But none of this is legal advice. If you need personalized legal help, book a consultation with me here.

Let’s get started!

Table of Contents

What is a Florida Single Member LLC?

A single-member Florida limited liability company has just one owner (hence the name, single member).

To form an LLC in the state of Florida or Florida SMLLC, you must file the Florida LLC Articles of Organization online with the Florida Division of Corporations.

You can file the articles in person, by fax, or by mail as well.

One of the best bonuses for a Florida business owner or sole owner filing an LLC is the asset protection it provides.

Also, flexibility is another one of the benefits of forming a Florida SMLLC.

While a single-member LLC is considered a disregarded entity for tax purposes, you can choose to be taxed as a corporation.

You can also add new members and LLC managers if your business grows.

Often, there are more requirements than starting the LLC itself.

Depending on what you’re selling and whether you’re collecting sales tax, you may need a business license or register with the Florida Department of Revenue.

Although Florida does not require you to file the Operating Agreement with the state, you must still have it.

An LLC’s Operating Agreement establishes rules for your Florida single-member LLC.

You must also file an annual report.

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Single Member LLC Florida vs. Sole Proprietorship

Both single-member LLCs and sole proprietorships have only one member and help legitimize your business.

When deciding between forming an LLC in Florida or operating as a sole proprietorship, there are several key factors to consider.

Liability Protection (Main Difference)

One of the main advantages of an LLC (Limited Liability Company) is the protection it offers its owners, known as members, against personal liability.

This means that members are typically not personally responsible for the business’s debts and legal obligations.

In contrast, a sole proprietorship does not provide this shield, leaving the owner personally liable for any business liabilities.

An LLC is a separate legal entity from single-member LLC owners, while a sole proprietor is treated as a single self-employed person for legal purposes and on tax forms.

As a sole proprietorship, your personal assets (home, car, bank accounts, etc) are fair game if someone sues you.

What are the Disadvantages of a Single-Member LLC in Florida?

However, single-member LLCs in Florida protect your personal assets, but use a charging order to collect debt.

With a charging order, a creditor could seize company control, liquidate your assets, and redirect distributions until that debt is paid. But there is a charging order limitation.

A charging order means that if the LLC is sued, creditors can only collect money from distributions made to the owner.

They cannot seize personal assets or force the sale of the business.

For asset protection in Florida, your limited liability company should have at least two members, but they don’t have to be individuals.

Some business and trust entities can serve as second members.

The downside is that the court case Olmstead v. Federal Trade Commission said it does not apply to single-member LLCs.

With the Olmstead decision, single-member LLCs are treated like sole proprietorships.

However, some states, such as Wyoming, South Dakota, and Delaware, provide charging order protection to single-member LLCs.

A Florida business set up as a single-member LLC is typically not covered by charging order protection by Florida law.

Cost, Taxation, and Professionalism

Additionally, an LLC may offer greater credibility and professionalism to potential clients and investors, which can be beneficial for business growth.

On the other hand, a sole proprietorship is simpler to establish and maintain, with fewer regulatory requirements and lower costs.

Taxation is another important aspect; sole proprietorships often benefit from pass-through taxation, meaning business income is reported on the owner’s personal tax return.

LLCs in Florida also enjoy pass-through taxation, but they offer more flexibility in how profits are distributed and taxed.

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Who Can Form a Florida LLC?

In the state of Florida, anyone who is at least 18 years old and has the legal capacity to enter into contracts can form an LLC.

This means that individuals, corporations, partnerships, or other LLCs can be members of a Florida LLC.

Furthermore, there are no residency requirements for forming an LLC in Florida.

Any person, whether a resident or not of Florida and the United States, can form a Florida single-member LLC.

There are also no restrictions on the number of members an LLC can have in Florida, and members do not have to be involved in the day-to-day operations of the business.

This allows for flexibility in ownership and management structure.

Experienced and new businesses alike can create a Florida SMLLC.

The processes are mostly the same for Florida residents versus non-residents, but they vary slightly, and there are different requirements and legal papers to file.

Florida Registered Agent

A single member LLC or any LLC in Florida requires a registered agent.

The registered agent must have a physical presence in Florida, such as a street address, and must be available during regular business hours to receive legal documents and notices on behalf of the LLC.

This ensures that important legal information is delivered promptly and accurately.

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Benefits of Having a Single Member LLC in Florida

Below are 8 big benefits of a Florida single-member LLC over a multi-member LLC:

There is less paperwork as you don’t need to deal with as many tax forms, contracts, and other paperwork.
Florida is flexible with the general LLC setup, and there are no restrictions on the management structure or the number of members.
It’s much simpler, as you can complete the major decisions and processes faster when you only have yourself to worry about rather than getting approval from multiple people.
You have total control without the influence and opinions of other members of the LLC.
There is limited personal liability, meaning you are not responsible for business debts.
Florida LLCs also have tax advantages because they are subject to pass-through taxation as the IRS taxes them as pass-through entities, so federal and state taxes are paid on your personal tax return each year.
Plus, Florida doesn’t have a state tax, so you won’t be double-taxed.
Forming an LLC is less expensive and simpler than forming a corporation, so it’s great for sole proprietors and Florida business owners. The filing fee is quite reasonable.

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Florida Single Member LLC Filing Requirements

Here is a quick, general step-by-step guide on setting up a single-member LLC in Florida.

You will need some of this information for your paperwork.

1. Choose a business name for your LLC:

The name must include the words “Limited Liability Company” or its abbreviation “LLC.”

Additionally, it cannot include certain restricted words such as “bank,” “insurance,” or “corporation.”

2. Choose a registered agent, as all 50 states require new businesses to have one.

A registered agent is someone who accepts your business’s official regulatory and legal correspondence.

Every LLC must have a registered agent who will receive legal documents on behalf of the business.

This can be an individual or a commercial registered agent service.

3. Complete your paperwork and file your Articles of Organization

This is the official document that registers your LLC with the Florida Department of State, Division of Corporations.

It must include basic information such as the name and address of the LLC, its purpose, and the names and addresses of members.

4. Create an Operating Agreement

Although not required by Florida state law, it is recommended to have an Operating Agreement in place to outline ownership and management structure, distribution of profits, and other important details.

Without it, the state’s default LLC laws will apply.

This doesn’t always work in your favor as the LLC business owner.

5. Get an EIN

An Employer Identification Number (EIN) is a unique number assigned by the IRS for tax purposes and is necessary for opening bank accounts and hiring employees.

You should file for an EIN or employer identification number through the Internal Revenue Service for federal income tax purposes.

By using the EIN, you protect your privacy and don’t have to use your social security number.

You’d use the same EIN number on your business tax returns.

6. Obtain necessary permits and licenses

Depending on your specific business activities, you may need to obtain certain permits or licenses at the state or local level.

7. File your annual report each year

LLCs in Florida are required to file an annual report with the state each year to maintain their active status.

This includes updating any changes in ownership or management information.

There are services that can help you do this easily, so there’s less stress!

8. Open a business bank account

It is important to keep personal and business finances separate, so you should open a separate business bank account.

If you don’t then you will pierce the corporate veil and will lose your LLC protection.

The state will treat your LLC as a sole proprietorship where you have unlimited personal liability for business debts.

9. Keep your finances organized and file your taxes each year

As a member of an LLC, it’s your legal obligation to keep your finances organized.

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This will also make it easier to track your business growth and file taxes accurately.

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Florida Single Member LLC Operating Agreement

An LLC operating agreement is one of the most important legal documents for your small business.

I have made this process super easy for you with our customizable LLC contract template.

It works for both single member LLCs and multiple member LLCs.

It comes with idiot-proof instructions where you simply fill in the highlighted blanks as instructed.

And within 15 minutes or less, you will have a proper LLC Operating Agreement that you can trust for your business.

With 14+ years of experience as a lawyer, I’ve included all the legal provisions you need, such as:

How you manage your business LLC
How your business operates
Your principal office, even if you work from home
How your business will be dissolved if you can’t run it anymore
What happens to your LLC business if you become incompetent or die
How you are NOT personally liable for anything
Your accounting and distribution from your business
and a lot more!

How to Easily Create a Single Member LLC Operating Agreement

Our LLC operating agreement template will save you so much time and money.

And we’ve added all the legalese needed to protect your business and personal assets in minutes.

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You will most likely need a few more business contracts for your LLC.

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The VIP bundle ensures you have the proper legal documents to legally protect your business completely without wasting valuable time or money.

Our LLC Operating Agreement Template will save you a lot of stress and expensive fines and fees in case of a lawsuit (the worst-case scenario).

Without one, the person or business suing you can go after your personal assets, too, and this can have disastrous results.

Get the template here to get peace of mind and eliminate worry over legal issues that can arise running a Florida business.

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BOI Filing Requirement for LLC

Whether you have a single-member or multiple-member LLC, you need to file your BOI report.

BOI stands for beneficial ownership information.

It’s a new federal law requiring LLCs and other companies to report information about their true owners.

The purpose is to prevent money laundering, terrorism financing, and other financial crimes.

The deadline for filing the BOI report depends on when your LLC was formed.

Learn how to file your BOI correctly in this masterclass I put together.

How to Close a Single-Member LLC in Florida

Closing a single-member LLC in Florida requires the following steps:

File dissolution documents with the Florida Division of Corporations: This includes filing Articles of Dissolution or Certificate of Termination, along with any applicable fees.
Pay all outstanding taxes and debts: Before dissolving an SMLLC, all taxes and debts must be paid off to avoid any potential legal issues.
Cancel business licenses, permits, and registrations: Make sure to cancel any business licenses, permits, or registrations obtained for the LLC.
Notify creditors and other relevant parties: It is important to inform creditors, vendors, and other relevant parties of the LLC’s dissolution so they can take appropriate action.
File final tax returns: An SMLLC must file a final federal return with the IRS and any applicable state tax returns before closure.
Close business bank accounts: Once all financial obligations have been settled, close any remaining business bank accounts for the LLC.
Keep records: It is important to maintain records of the dissolution process in case of future inquiries or legal issues.

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FAQs on Single Member LLC Florida

Below are answers to some common questions I get about LLCs in Florida including single member LLC.

Schedule a consultation with me to get personalized help for your business.

What is the point of a single-member LLC?

A single-member LLC, or SMLLC, is a limited liability company with only one owner.

The main point of forming a single-member LLC is to provide personal liability protection for the business owner while still maintaining a simple and flexible business structure.

This means that if the LLC faces any legal or financial issues, the owner’s personal assets are generally protected from being used to cover business debts.

This asset protection separates your personal from your business bank account and prevents people from going after your house, money, and other assets in case of a lawsuit.

Besides enhancing your credibility, protecting a member’s interest, and providing limited liability protection, a single-member LLC has tax benefits.

It requires less paperwork than some other business entities.

An SMLLC offers pass-through taxation similar to partnerships or sole proprietorships, meaning that business income is only taxed once on the owner’s personal tax returns.

This way you avoid double taxation compared to other business structures such as C Corporation.

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Is a single-member LLC ok?

Yes, a single-member LLC is a valid and acceptable business structure in Florida.

An LLC is a simple business entity you can form, and it provides more liability protection than a sole proprietorship.

Make sure to set up a consultation with a business lawyer like me here instead of trying to file the paperwork on your own and make legal mistakes.

If your LLC is in a state that you aren’t a resident of, you must file a foreign LLC.

But other than that, a limited liability company provides many benefits to an LLC member.

What is the difference between a single-member LLC and a single-owner LLC?

These two essentially mean the same thing and signify that an LLC has a sole member or just one owner compared to a multi-member LLC that has more than one member.

Both terms refer to a limited liability company that has only one owner.

In a single-member LLC, the term “member” is used to describe the owner as it aligns with LLCs’ language, whereas “single-owner LLC” is a more straightforward way of communicating the same concept.

Regardless of the terminology, single-member and single-owner LLCs provide similar benefits, including limited liability protection, pass-through taxation, and a simplified management structure.

These are both different from a sole proprietorship that provides no separation of personal assets from business assets or liabilities.

If you started doing business without forming a business entity like a corporation or LLC, you’re considered a sole proprietor.

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Does a single-member LLC need an EIN in Florida?

Yes, you should get an EIN for your single-member LLC.

As explained above, an EIN is needed for tax purposes and is necessary for opening business bank accounts, filing taxes, and hiring employees.

Even though an SMLLC only has one owner, having an EIN can provide additional separation between personal and business finances.

How much does a single-member LLC pay in taxes in Florida?

The amount of taxes a single-member LLC in Florida pays depends on the chosen tax classification by the owner.

By default, an SMLLC is classified as a sole proprietorship or disregarded entity for tax purposes.

In this case, the business profits and losses are reported on the owner’s personal tax return, and they are subject to self-employment taxes.

The current self-employment tax rate in Florida is 15.3%, which includes 12.4% for Social Security and 2.9% for Medicare.

Alternatively, an SMLLC can elect to be taxed as a corporation by filing Form 8832 with the IRS.

In this case, the business will be subject to corporate income tax rates, which currently range from 5.5% to 9.39% in Florida.

It is important for single-member LLC owners to consult with tax professionals to determine the most advantageous tax classification for their specific business and financial goals.

Check out these tax books to learn more.

In addition to federal taxes, SMLLCs in Florida are also responsible for state taxes, including sales and use tax, unemployment compensation tax, and other applicable taxes depending on the nature of the business.

Should you pay yourself in a single-member LLC?

Yes, just like any other business, you should pay yourself in a single-member LLC by taking money out of the business’s profits, also known as an owner’s draw.

Often business owners will pay themselves with this method rather than draw a regular salary.

A good bookkeeping software can help with this.

Final Thoughts on Single Member LLC Florida

Whether you’re an experienced business owner or just starting, creating a Florida LLC is one of the most important legal steps in your business.

It not only covers you legally but also protects your personal assets.

No one ever thinks they will deal with legal complications, but they can arise even if you have the best intentions.

I witnessed this firsthand when a contractor sued my father’s small business for $90,000 for a legal mistake that could have been avoided with a proper contract in place.

I don’t want that to happen to you, and it is for this reason I decided to become a business lawyer.

Purchase the LLC Operating Agreement Template or VIP Legal Bundle today, and sleep peacefully tonight, knowing your business is legally protected.