How to Start an LLC in Puerto Rico
If you’re looking to start a business in Puerto Rico, an LLC (limited liability company) might be a great choice. LLCs offer stronger liability protection than being a sole proprietor or part of a general partnership, and more flexibility than a corporation in how it can be managed and taxed. That versatility makes LLCs useful for many different kinds of businesses.
To form your LLC in Puerto Rico, you’ll file a Certificate of Formation with the Puerto Rico Department of State and pay a $250 filing fee. We’ll show you everything you need to set up your Puerto Rico LLC and keep it maintained in this guide.
FORM YOUR LLC – $39 + STATE FEES
1. Name Your LLC
You can’t leave anything undecided when filling out your LLC’s Certificate of Formation, which means you need to know the name of your business before you file. Puerto Rico does have a few requirements to follow when naming your business (these rules can be found in PR Laws Title 14 § 3952). In particular:
- Your LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company,” “Compañía de Responsabilidad Limitada,” “LLC,” “CRL,” “L.L.C.” or “C.R.L.”
- Your LLC’s name can’t be in use by any other business entity in Puerto Rico.
You can use the Puerto Rico Department of State’s Corporations Search directory to verify that your business name is available
Tip: If you need to delay forming your Puerto Rico LLC but still want to secure a business name, you may reserve one for up to 120 days by submitting an Application for Reservation of Corporate Name to the Puerto Rico Department of State and paying a $75 filing fee.
2. Register Your Domain Name
The next thing you should do is get a domain name for your business. Having a good domain name is critical for any business with an online presence—and these days, virtually every business should be online. Your LLC should have a domain name that matches its business name, but a close variation (or a phrase visitors can connect to the business name or what the business does) also works.
By registering a domain name, your business looks more professional and you reinforce your brand with your customers, helping them remember your business.
You might wonder why we suggest getting a domain before forming your company? Well, getting your best available domain name before anyone else does is really important. A good domain name option can get snapped up by another person very quickly, so it’s best to get one before you’ve taken the time to file all your formation paperwork. Trust us, it’d be a bummer to get a Puerto Rico LLC all registered under a specific name, only to find out someone else registered the corresponding domain name in the meantime.
Plus, there’s one added benefit to registering a domain name. When you do that, you get access to a professional business email address. You can even use this business email before you’ve fully set up your website and put it online.
Tip: Hire Northwest to help you with forming your business, and we’ll set you up with a free year of domain registration and business email access.
3. File Puerto Rico LLC Certificate of Formation
Time to file the paperwork that will create your LLC! The last official step before your Puerto Rico LLC legally exists is submitting a Certificate of Formation and the associated $250 fee to the Puerto Rico Department of State.
Here’s the information you’ll need to provide when filling out your LLC’s Certificate of Formation:
Your LLC name must follow the rules listed above, including the requirement for an identifier like “Limited Liability Company” or “CRL.”
The address you provide for your business must be an actual street address in Puerto Rico.
The mailing address for your business may be a physical address or a P.O. box.
This is the name of a person or entity you authorize to accept service of process or legal mailings on behalf of your business. You (or someone you know) can be your registered agent, or you can hire a registered agent like Northwest. Puerto Rico requires all LLCs to appoint a registered agent.
Puerto Rico’s laws for registered agents are explained in PR Laws tit. 14 § 3542, but in brief, your LLC’s registered agent must:
- Have a physical address (not a P.O. Box) in the state of Puerto Rico.
- Be present at their address during regular business hours.
- Accept important mail (including lawsuits) from the Puerto Rico Department of State and deliver it to you fast.
Tip: Serving as your own LLC’s registered agent can tie you down to a single location and require you to put personal information in the public record. If your work requires mobility, or if you want live more privately with your LLC, hire Northwest to serve as your Puerto Rico registered agent.
You’re required to list the purpose of your LLC, but this can be specific or general. If you don’t want to be specific, you can write “For any and all legal purposes for which an LLC can be organized in Puerto Rico.”
Provide the name(s) and street address(es) of whoever your LLC authorized to complete your Certificate of Formation. This doesn’t have to be someone within your LLC.
List the names and street addresses of whoever will be in charge of your LLC after the Certificate of Formation is filed.
Here you can either choose a specific date for your LLC to dissolve, or choose “indefinite” or “perpetual.” “Perpetual” means a business that ideally continues forever, and “indefinite” means you expect your business to eventually dissolve, but no specific date is chosen. It doesn’t make much difference whether you choose “indefinite” or “perpetual” here.
This is the date your LLC will officially start. You can either begin effective immediately (the most common approach), or on any date up to 90 days in the future.
The authorized person(s) sign here.
You will also need to provide a business email address where the Department of State can contact you regarding your filing. This business email address does not go on the public record, but everything else on this form will.
How do you file the Puerto Rico Certificate of Formation?
You can file the Puerto Rico Certificate of Formation with the Department of State by mail, in person, or online.
By mail or in person:
Departamento de Estado de Puerto Rico
Calle San José
San Juan, PR 00901
4. Adopt an Operating Agreement
Just like it says, an operating agreement is a document that guides how your LLC operates. It should include important information like how LLC member voting is handled, the allocation of profit, and how to resolve disputes between members. The operating agreement is an internal document you should keep on record at your business, you don’t have to file it with the Department of State.
You might hear that Puerto Rico doesn’t require LLCs to have an operating agreement. That’s technically true, but an operating agreement is a good choice for any LLC. Having one sets rules for keeping your business operating correctly and helps with maintaining your liability protection. Plus, most banks usually want to see an operating agreement before opening an account for a business.
Tip: Our attorneys have drafted an initial Puerto Rico operating agreement template that’s freely available for your use.
5. Get an EIN
Once your Certificate of Formation has been approved by the Department of State, it’s time to apply for an EIN (Employer Identification Number). An EIN is the number the IRS uses for identifying a business on tax forms. It’s basically a social security number for your LLC. Getting an EIN is mandatory for any LLC with employees or multiple members, and they’re another thing that’s usually required when opening a business bank account. You can apply for an EIN for free directly from the IRS online, or let us get an EIN for you.
6. Get a Business Bank Account
Mixing personal finances with business finances is dangerous for an LLC, and a good way to lose liability protections. That’s why it’s important for your LLC to have its own bank account. Most banks will usually ask to see your LLC’s operating agreement and its EIN. If the LLC has more than one member, you might also need to have an LLC Resolution to Open a Bank Account.
7. File Your Annual Statement
Puerto Rican LLCs are required to file an Annual Statement and pay an annual fee of $150. The Annual Statement is slightly less detailed than the Annual Report that corporations have to submit, but it serves the same purpose—updating the Department of State on your business’s ownership and contact information. Starting the year after your LLC was formed, your Puerto Rico Annual Statement is due by April 15th every year.
8. File Your BOI Report
The other major report you’ll need to make as an LLC is the Beneficial Ownership Information (BOI) Report. This filing provides the federal Financial Crimes Enforcement Network with details about your LLC’s beneficial owners and the company applicant who filed its formation paperwork. You have 90 days to file the report from the date your LLC is formed. You can submit this filing on your own, or let us handle your BOI Report for a fee.
*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.
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