How to Start a Limited Liability Partnership in Florida | 2024 Guide

Start a Limited Liability Partnership in Florida

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Florida. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Florida, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Florida LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Florida, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Florida General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Florida

To form a limited liability partnership in Florida, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Registered Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Florida, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Florida business registry. Ensure that your chosen name follows Florida naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Florida Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Florida- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Florida Secretary of State business name database and Florida Business Name Search. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $35 and mail name reservation fee of $25. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by three methods, online, by mail, and in person filing., which costs around $50 Processing Fee, $10 Certificate of Status, $30 Certified Copy. In addition, the DBA’s validity in Florida is five years, which you can file in the Florida Secretary of State.

You can check out how to file a DBA in Florida for clearer understanding.

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Step 3: Designate a Registered Agent

In Florida, you’ll need to designate a Registered Agent for your LLP. The Registered Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Florida Registered Agent Services to serve as your LLP’s Registered Agent, ensuring that they meet Florida requirements.

However, If you plan to become a Registered Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Florida Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Florida Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Florida laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Florida. The default laws in Florida might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Florida Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Florida Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Florida.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Florida LLP. Additionally, obtain the necessary Florida Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Florida to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Florida Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Florida, and local levels.

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Advantages of Forming a Limited Liability Partnership in Florida

While the specific advantages of forming an LLP in Florida can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Florida:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Florida.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Florida may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Florida.

Cost of Forming an LLP in Florida

The cost of forming an LLP in Florida may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Florida Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Florida instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership in Florida?
A limited liability partnership is a type of business arrangement in Florida that offers personal liability protection to its partners.
Who can form a limited liability partnership in Florida?
Any two or more individuals or entities, including corporations or other LLPs, can form an LLP in Florida.
What are the advantages of forming an LLP in Florida?
The main advantage of forming an LLP in Florida is that it offers personal liability protection to its partners in case of business losses or legal issues.
Can an LLP be taxed as S-corporation in Florida?
Yes, an LLP can elect to be taxed as an S-corporation in Florida.
Do all partners in an LLP have limited liability protection in Florida?
Yes, all partners in an LLP have limited liability protection in Florida.
What is the naming requirement for LLPs in Florida?
LLPs in Florida must include the words “limited liability partnership” or “LLP” in their name.
Can an LLP in Florida have a single partner?
No, an LLP in Florida must have at least two partners.
What is the filing fee for starting an LLP in Florida?
The filing fee for starting an LLP in Florida is $25.
What is the yearly report filing requirement for LLPs in Florida?
LLPs in Florida are required to file an annual report, which can be done online, and the cost is $138.75.
Are foreign LLPs allowed to operate in Florida?
Yes, foreign LLPs are allowed to operate in Florida, provided they register with the state.
Do LLPs in Florida need to have an office in the state?
Yes, LLPs in Florida are required to have a registered office in the state.
Can an LLP partner also work as an employee in the business?
Yes, an LLP partner can also work as an employee in the business.
What is the liability of LLP partners in Florida?
LLP partners in Florida are liable only to the extent of their capital contributions.
Can an LLP hedge against liability in Florida?
An LLP may have professional liability insurance that can help hedge against the risks posed by professional services.
Are there any annual report filing requirements for an LLP doing business in Florida?
Yes, all LLPs must submit an annual report and pay the $138.75 filing fee by May 1st.
Can all types of businesses form LLPs in Florida?
No, only professionals who deliver services via licensed professionals, including doctors, attorneys, and architects, can form LLPs in Florida.
Are LLPs in Florida required to designate a registered agent?
Yes, Florida law requires all LLPs to designate a registered agent to receive legal and official notices.
Does an LLP in Florida require an operating agreement?
Although an operating agreement is not legally required under Florida law, it is highly recommended.
What should an operating agreement of an LLP in due diligence contain?
An operating agreement in due diligence for an LLP should contain rules governing meetings, capital contributions, profit and loss distribution, taxation, dissolution, and transfer of partnership interests.
Can a general partnership convert to an LLP in Florida?
Yes, a general partnership can convert to an LLP by filing an application with the Florida Department of State.
Do LLPs in Florida need to obtain business licenses and permits?
Yes, depending on the type of business, an LLP in Florida may need various federal, state, and local licenses or permits to operate.
Can a member of the LLP be liable in Florida due to another member’s mistake?
No, a member of the LLP in Florida cannot be held liable for another member’s mistake or negligence.
Can an LLP in Florida be sued by a vendor supplying the company, in addition to its members?
Yes, an LLP can be sued in Florida by vendors who have supplied services regardless of membership interests.
Do the partners of an LLP in Florida have equal liability protection?
Yes, all partners in an LLP in Florida have equal liability protection.
Can the members of an LLP be held accountable for fraudulent actions?
Yes, members can be held accountable for fraudulent actions in Florida.
Can outside parties review an LLP’s financials in Florida?
Yes, external review of financials might be required for certain types of licenses or distributors, including operators of mergers and acquisitions.
What is the difference between an LLP and a corporation in Florida?
The primary difference between an LLP and a corporation in Florida is the extent of personal liability protection offered to business owners.
What are the key requirements for dissolving an LLP in Florida?
LLP must notify all their registered partners prior to dissolution under Florida law, and that dissolution require an application to be filed with the Florida Department of State.
How can an LLP in Florida change its registration from STP or Cayman incorporation or Cyperus?
SEC form SFN 61288 is commonly used to amend LLP registration status from Delaware to less volatile state (e.g., Florida).
How do I register a limited liability partnership in Florida?
To register a LLP in Florida, you need to file a partnership registration statement with the Florida Secretary of State’s office.
What is the filing fee for a Florida LLP?
The filing fee for a Florida LLP registration statement is $25.
Can a non-US resident form a Florida LLP?
Yes, as long as there is at least one partner who has residence or home address in Florida.
Can all types of business activities be carried out by a Florida LLP?
Generally, all business activities can be carried out by a Florida LLP, unless otherwise prohibited by law.
Is a partnership agreement necessary for a Florida LLP?
While a partnership agreement is not legally required for a Florida LLP, it’s recommended that partners create one.
How many partners are required to form a Florida LLP?
At least two partners are required to register a Florida LLP.
Are all partners of a Florida LLP liable for the partnership’s debts?
No, only the partner responsible for the debt is liable.
What is the tax treatment for a Florida LLP?
A Florida LLP is a tax pass-through entity by default, meaning the profits and losses are carried over to the individual partners.
How often does a Florida LLP need to file an annual report?
Annual reports for a Florida LLP are filed certifying continued the correctness of the annual breakdown of partners and the treasurer’s office status from Mark to Market.
Can a Florida LLP be converted to another business formation?
Yes, it can be converted to other business formations like LLC, limited partnerships, etc..
Do Florida LLPs require a registered agent?
Yes, it is required by law to have a registered agent for a Florida LLP.
Can a Florida LLP change its registered agent?
Yes, the registered agent can be changed by filing a statement of change with the Florida Division of Corporations.
How do I search for an available LLP name in Florida?
You can use the Florida Division of Corporations’ registration name search tool to search the available LLP name.
Can a Florida LLP operate under a name that is different from its legal name?
Yes, a Florida LLP can operate under a fictitious name by filing a Statement of Fictitious Name.
Does a Florida LLC need to get a business license?
Depending on the type of business operated, a Florida LLP may need to obtain certain permits or licenses.
Can a partnership where all partners live outside Florida register a Florida LLP?
Yes, they can, as long as there is at least one partner who has residence or a home address in Florida.
How long does it take to register a Florida LLP?
It may take anywhere from two to four weeks to process the registration statement for a Florida LLP.
What is a designated partner?
A designated partner is responsible for filing documents with Florida’s Division of Corporations on behalf of the LLP.
What happens if the designated partner of a Florida LLP resigns?
Another partner can be chosen to act as new designated partner, or the LLP may elect a new designated partner.
Can a new partner be added to a Florida LLP?
Yes, a new partner can be added by filing an amendment with the Division of Corporations.
Is there a requirement on capitalization for Florida LLPs?
No, there is no legal requirement on the capitalization for Florida LLPs.
Can partners of a Florida LLP take salaries or wages?
Partners of a Florida LLP who offer services to the company can receive salaries or wages.
How do partners of a Florida LLP get paid?
Partners of a Florida LLP divide profits in proportion to their respective partnership interests and investments.
Do I need an attorney to register a Florida LLP?
It’s not mandatory to obtain an attorney’s services for registering a Florida LLP.
Are partners of a Florida LLP allowed to take legal action against each other?
Partners of a Florida LLP can take legal action against each other unless it’s restricted by their partnership agreement.
What happens if a Florida LLP defaults on its obligations?
The duration of a Florida LLP’s liability is expected to terminate year on year and be officially dissolved after 30 years of formation, however each partner within the LLP could be held liable for contract bonds and other debt obligations.
Can partners of a foreign LLP register to do business in Florida?
Yes, any foreign LLP authorized to do business in thier assigned country or state has the right to register to do business in Florida.
Can a Florida LLP carry out business in other states?
A Florida LLP can carry out its business in other states after meeting foreign qualification requirements in each state in which it carries business.

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Conclusion

Starting an LLP in Florida may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Florida.

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