If you are an indie artist, manager or any other type of music professional who intends to make money off their works, then you should definitely form an LLC to associate your business with. The LLC has become an increasingly popular corporate structure. Like a corporation, the LLC is considered a separate entity, so it can enter into agreements or contractual obligations and it can be sued. Fortunately, LLCs combine the personal liability protections of a large corporation and the simplified tax structure and filing requirements of a partnership or sole proprietorship. More importantly, the administrative requirements are minimal! This makes it a great choice for indies artists, labels songwriters and other creators of copyrightable works. Not only will an LLC protect you personally, but it prepares you to start acting and thinking like a business! The guide below will tell you how to form an LLC and obtain a tax ID on your own. However, you can also utilize services like LegalZoom for a fee – I did this the first time – but doing it yourself is way more cost effective, plus you learn the process!
1. Choose a Name
Under Florida law, an LLC name must contain the words “Limited Company” or “Limited Liability Company,” or the abbreviations “L.C.” or “L.L.C.” The word “Limited” can be shortened to “Ltd.” and “Company” may be abbreviated as “Co.”
Your LLC’s name must be recognizably different from the names of other business entities already on file with the Florida Division of Corporations. Names may be checked for availability by searching the Department of State: Division of Corporations business name database. You may not reserve a name before organizing your LLC!
2. File Articles of Organization
A Florida LLC is created by filing Articles of Organization with the Florida Division of Corporations.
The articles must include: the LLC’s name and address; the name, address, and signature of the LLC’s registered agent; the names and addresses of the LLC’s managers; the effective date of the LLC (if other than date of filing).
The filing fee is $125. The articles may be filed online or by mail.
3. Appoint a Registered Agent
Every Florida LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be either an individual resident or business entity that is authorized to do business in Florida. The registered agent must have a physical street address in Florida.
4. Prepare an Operating Agreement
An LLC operating agreement is NOT required in Florida, but is highly advisable. If an operating agreement is created, it need not be filed with the Articles of Organization.
5. Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.
6. File Annual Reports
All Florida LLCs must file an Annual Report yearly to maintain “active” status. The first report is due in the year following formation. The report must be filed online at www.sunbiz.org between January 1st and May 1st. The fee for the annual report is $138.75. After May 1st, a $400 late fee is added to the annual report filing fee. “Annual Report Reminder Notices” are sent to the LLC’s email address you provide when you submit this document for filing.
8. Foreign LLCs Doing Business in Florida
All LLCs organized outside of Florida must register with the Florida Secretary of State to do business in Florida. Foreign LLCs must appoint a registered agent for service of process physically located in Florida. To register, file a Qualification of Foreign LLC with the Florida Department of State Division of Corporations. The completed application must be accompanied by a Certificate of Existence from the foreign LLC’s home state, dated no more than 90 days prior to the filing of the certificate.
The filing fee is $125.
Before filing, make sure the LLC’s name is available in Florida by checking the Florida Division of Corporations business name database. If the name is not available, the foreign LLC must adopt an alternate name for use in Florida and submit a signed copy of the consent or resolution of its managers or managing members adopting the alternate name.
