Are you looking to form a professional limited liability company (PLLC) in Florida, but you’re not sure how the formation process works? There are several important steps when it comes to creating a Florida PLLC that is compliant and able to do business in the state.
What is a Florida Professional LLC?
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. PLLCs in Florida are LLCs formed for the sole purpose of providing “any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization.” Professionals that can form PLLCs in Florida include, among others, dentists, physicians and surgeons, architects, veterinarians, attorneys at law, and life insurance agents.
The Florida PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in Florida have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Forming a PLLC in Florida (in 6 Steps)
Step One) Choose a PLLC Name
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In the state of Florida, you must include one of the following in the legal name of your PLLC: “chartered,” “professional limited liability company,” “P.L.L.C.,” or “PLLC.” Note that you may also register and provide professional services under a fictitious name (also known as a “doing business as” or “dba” name) that is different from your legal PLLC name. More information about registering a fictitious name in Florida can be found on the Florida Department of State website. The fictitious name can be identical to the name of your PLLC or contain one or more of the last names of any member included in such name except that the words “chartered” or “professional limited liability company” or the abbreviations “P.L.L.C.” or “PLLC” may be omitted.
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. You should conduct a search on the Division of Corporations website to confirm whether your chosen name is available before filing your Articles of Organization. Florida unfortunately does not allow you to reserve a business name.
Step Two) Designate a Registered Agent
Every PLLC in Florida is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
Your registered agent must have a physical street address in Florida. You can appoint any business entity with an active Florida filing or registration to serve as your PLLC’s registered agent, or you can appoint an individual or principal associated with your PLLC. Florida does not permit a business entity to serve as its own registered agent.
Without a registered agent, you could lose your good standing with the state of Florida, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Step Three) File Formation Documents with the State
Once you are ready to form your Florida professional limited liability company, you will fill out the Articles of Organization.
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Name of your PLLC
- Mailing and street addresses of your PLLC
- Name and street address of your registered agent
- Registered agent’s signature
- Name and addresses of those authorized to manage and control your PLLC
- Effective date of the Articles of Organization, if different from the filing date
- Signature of a member or an authorized agent of the member
Cost to Form a PLLC
The filing fee for the Articles of Organization is $100. You will also need to file a Registered Agent Designation, which has a filing fee of $25.
If you file your Articles of Organization online and pay with a credit card, you should expect a processing time of 2-3 business days during non-peak periods, or longer during peak periods. If you mail your Articles of Organization and pay by check or money order, you should expect 3-5 business days during non-peak periods, or longer during peak periods.
Step Four) Create an Operating Agreement
After you register a PLLC in Florida, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
- Individual members' ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the PLLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five) Handle Taxation Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
Depending on how your PLLC is classified for tax purposes, you may need to pay corporate income/franchise tax for the privilege of doing business in Florida. You should contact the Florida Department of Revenue to confirm your requirements. Their website includes additional information on the corporate income/franchise tax and other state taxes. The Florida Department of Revenue also provides a number of online services, including electronic tax filing and tax payments.
Depending on where in Florida your business is located, you may also need to pay some local taxes. You should contact the local tax tax authorities to see what’s required for your PLLC. The four largest cities in Florida each offer information for businesses online: Jacksonville, Miami, Tampa, and Orlando.
Step Six) Obtain Business Licenses and Permits
Many businesses are required to obtain a license from the Department of Business and Professional Regulation. Their website includes further information about the businesses and professions they license and regulate. Your PLLC may also be required to obtain a local occupational license or otherwise register with the city or county in which your PLLC is located, so you should contact local licensing authorities to confirm any requirements as well.
Would You Prefer a Professional Form Your PLLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
Next Steps: What to Do After Creating a PLLC in Florida
Open a business bank account
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
All businesses conducting work in Florida are required to obtain workers’ compensation insurance for their employees. The specific coverage requirements vary by industry, number of employees, and the organization of your business. You should review the Division of Workers’ Compensation website for more information. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Understand income reporting
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
Typically LLCs are treated as pass-through entities, meaning that the members of the LLC are responsible for paying tax on the LLC’s income. Florida does not impose an individual income tax, however, so it’s possible that your PLLC’s income will not be subject to any state income tax. If you elect to have your PLLC treated as a corporation for tax purposes, however, you will need to pay a corporate income tax in Florida. Tax forms that may be required for your PLLC are available on the Florida Department of Revenue’s website.
Understand annual reporting
All business entities in Florida are required to file an annual report with the Florida Department of State. This filing ensures that the information on file about your business is current, and it’s necessary in order to maintain an “active status” with the Department of State. You can file the annual report for your PLLC online.
Find an accountant
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.