Overview
Getting an LLC in Puerto Rico involves a straightforward process. Below, we’ll guide you through the essential steps and provide factual answers to common questions.
How To Get An LLC In Puerto Rico: Step-By-Step
- Choose a Name for Your LLC:
- Choose a unique and available name for your LLC.
- Perform a Puerto Rico LLC name search through the Puerto Rico Department of State website.
- Reserve your chosen name if needed.
- Appoint a Registered Agent:
- Appoint a registered agent with a physical address in Puerto Rico.
- File Certificate of Formation:
- Complete the Puerto Rico LLC Certificate of Formation form.
- File online through the Puerto Rico Department of State website or submit a paper application.
- Operating Agreement:
- Draft an operating agreement outlining the structure and operation of your LLC. Although not required by the government, it is highly recommended.
- Employer Identification Number (EIN):
- Obtain an EIN from the IRS for tax purposes.
- File the Beneficial Ownership Information Report:
- Beginning in 2024, Puerto Rico LLCs must submit a Beneficial Ownership Information (BOI) Report.
1. Choose A Name For Your LLC
Check if the name you desire for your Puerto Rico LLC is available. This is important because no two businesses in Puerto Rico can share the same name.
To do this, use the Department of State’s Business Entity Search tool to compare your business name with existing ones in Puerto Rico.
Make sure your LLC name is unique by following Puerto Rico’s naming rules to increase the chances of your LLC name being approved.
If you need, you can reserve the name for your LLC for up to 120 days. The cost is $75.
2. Appoint A Registered Agent
In Puerto Rico, you need to choose a registered agent (also referred to as a resident agent) for your LLC. This is the person or company allowed to get legal papers and important notices on behalf of your LLC.
Your resident agent can be a person, like yourself or one of your employees, or a company that offers this service.
The resident agent has to meet some requirements:
- If it is a company, it must offer registered agent services.
- The agent must have an address in Puerto Rico.
- The agent must be there in person and ready to get documents during regular business hours.
3. File Puerto Rico LLC Certificate Of Formation
To officially establish your Puerto Rico LLC, you need to file the Puerto Rico LLC Certificate of Formation.
This document provides essential details about your LLC and serves as the official registration.
To prepare the certificate, gather the following information: your LLC name, the name and address of the registered agent, the purpose of your LLC business, and provide the effective date if different from the filing date.
The form is a straightforward online submission or can be sent by mail.
The Puerto Rico LLC Certificate of Formation filing fee is $250.
Once filed, the Puerto Rico Department of State will review the document, and upon approval, your LLC attains legal business entity status.
You can undertake this process independently using our step-by-step guide or opt for the convenience of hiring a company for assistance.
>> Get the Northwest Registered Agent $39 Deal <<4. Create An Operating Agreement
An operating agreement is a document that shows how your LLC will do business.
While Puerto Rico doesn’t make it a must, having one is crucial. It helps in different ways, like resolving money disputes or potential legal issues. Without it, the courts decide based on state laws, not necessarily what’s best for the LLC.
The agreement can include things like the LLC’s name, address, how long it will last, the registered agent’s details, info from the Certificate of Formation, the business’s purpose, member contributions, how profits and losses are shared, rules for new and leaving members, how the LLC is managed, and clauses about protection and responsibility.
5. Obtain Employer Identification Number (EIN)
The Internal Revenue Service (IRS) gives your LLC a nine-digit number called an Employer Identification Number (EIN) to identify it for taxes. You can get your EIN by mail or online through the IRS.
This number helps you:
- File and handle taxes at both the state and federal levels.
- Open a bank account for your business.
- Apply for permits and licenses.
- Hire employees.
Obtaining an EIN is FREE.
6. File The Beneficial Ownership Information Report
Starting in 2024, many Puerto Rico LLCs must now file an extra document at the federal level, known as the Beneficial Ownership Information (BOI) Report, to the Financial Crimes Enforcement Network (FinCEN).
This report mandates disclosing information about your company applicant and all beneficial owners to FinCEN. You can submit it online using the Beneficial Ownership Information E-filing System or opt for a professional service to handle it for you.
Review: What Is Needed To Form An LLC In Puerto Rico?
To form an LLC in Puerto Rico, you need:
- A unique LLC name.
- Registered Agent information.
- Certificate of Formation.
- Operating Agreement.
- Employer Identification Number (EIN).
What Forms Do You Need To Get An LLC In Puerto Rico?
- Request to Reserve LLC Name
- Certificate of Formation (online)
- Certificate of Formation (PDF)
- EIN Application Form
- BOI Form
How Much Does It Cost To Start An LLC In Puerto Rico?
The cost to start an LLC in Puerto Rico involves several steps, each with its own associated fees:
- Certificate of Formation Filing Fee: $250
- Name Reservation Fee (if needed): $75
- Annual Report Fee: $150
What Is The Puerto Rico LLC Annual Report?
Puerto Rico LLCs need to submit a report to the government every year, known as the Annual Report. This report ensures the government has current contact details for your business and is informed about any changes in ownership.
It is due on April 15th, starting one year after formation.
The annual report in Puerto Rico costs $150.
How Long Does It Take For An LLC To Get Approved In Puerto Rico?
When you send your LLC application by mail, it will be approved in 5-7 business days, plus the time it takes for the mail (2-3 weeks in total).
However, if you file online, your LLC can be approved in 1 business day.
What Are The Benefits Of Getting An LLC In Puerto Rico?
- Limited liability protection for members
- Pass-through taxation
- Flexible management structure
- Credibility for business transactions
Is Puerto Rico A Good Place To Get An LLC?
Whether Puerto Rico is the right place for your LLC depends on where you live and do business. If you live or operate in Puerto Rico, it makes sense to start your LLC there.
Getting An LLC In Puerto Rico: Next Steps
Once your LLC is registered, you can:
- Get the permits and licenses you need for your business, like health or zoning permits.
- Register your business with the local tax agency.
- Open a business bank account.
- Apply for a business credit card.
- Buy insurance for your business.
- Safeguard your name and logo with a trademark.
To maintain your LLC in Puerto Rico, you must:
- Update any changes to the registered agent or business address promptly.
- File an Annual Tax Report.
- Pay Taxes (owners can elect to file their individual tax returns).
Read our review of a few providers to find the best LLC service that fits your needs.
Conclusion
Forming an LLC in Puerto Rico involves a few key steps, from name reservation to obtaining an EIN.
Carefully following the process ensures a smooth establishment of your LLC.
For more detailed information and to access the necessary forms, visit the Puerto Rico Department of State website.
