Are you considering creating a rental property LLC in Florida? It is a great idea to consider this option if you want to protect your personal assets, separate your rentals from other investments and enjoy tax benefits. Here is a guide to help you get started.
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Step #1: Choose a Name
The first step is to come up with a name for your new LLC. Make sure that it is unique and memorable but also ensure that the name includes the term "LLC." This will designate it as a limited liability company. You can check the name's availability by conducting a search on the Florida Department of State's Division of Corporations website or you can hire an attorney.
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Step #2: Select a Registered Agent
A registered agent is mandatory for all LLCs in Florida. This person is responsible for receiving service of process and legal document filings on behalf of the LLC. The agent must be a Florida resident or a business entity that is qualified to do business in the state of Florida.
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Step #3: File Articles of Organization with the State
To create your LLC, you must file "Articles of Organization" with the Florida Department of State, Divisions of Corporations. The information required in these articles includes your chosen name, registered agent name and address, principal place of business, and the names and addresses of the LLC members.
You can complete and file the articles online or submit them in-person. Using an online application is the easiest and fastest method. Filing fees for LLC articles range between $100 to $125.
Step #4: Create an Operating Agreement
An operating agreement is an internal document that outlines the rules and procedures for running your LLC. This document is essential and recommended because Florida law does not have specific regulations regarding this document. It will provide clear guidance to all members on how the business should run, specify the structure of the company, and clarify individual roles, rights, and responsibilities.
Step #5: Obtain Other Permits or Registrations if Required
Before you start operating your LLC, it's crucial to verify whether you would need any more formal business requirements. A common permit for rental property ownership in Florida is known as the Tourist Development Tax. LLC investment property can mean online vacation rentals or operating a BNB in Florida areas such as Key West Florida, the keys in general and coastal areas. Florida inns would also potentially fall under the requirements.
Failure to collect the tax may result in fines or legal actions. You may find out If others are required by contacting the Florida Department of Business and Professional Regulation.
Step #6: Open a Business Bank Account
The final step in creating an LLC for your rental investment property asset is opening a separate bank account for your rental business. This is Beneficial for record keeping, making managerial tasks easier, protecting your personal assets in case of a lawsuit, and providing evidence of auditable finances.
You will have to provide evidence of forms of identification and designuation for authorized shares, members, managers, or any required ddocumentation by the bank.
In Conclusion,
Although the process may seem mundane, Florida makes the process pretty clear on how you can manage your new LLC Rental real Estate business. From filing articles of the organization with the Florida Department of State's Divisions of Corporations to opening a business bank account dedicated to your rental income, don't overlook even the abstractions of details. With proper management, your LLC rental apartment/vacation houses business investment can generate income if operated successfully.
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