How to Form an LLC in Puerto Rico

Before you file your Certificate of Formation, you need to make sure your business name follows Puerto Rico’s LLC name requirements, written in PR Laws Title 14 § 3952. First, you must make sure your preferred name is available—meaning no other business in Puerto Rico is currently using it. Also, your LLC name must contain one of the following:

• “Limited Liability Company”
• “Compañía de Responsabilidad Limitada,”
• the abbreviation “LLC,” “CRL,” “L.L.C.” or “C.R.L.”

Already have a business name? Check to see if it’s available.

Next, you need to appoint a Puerto Rico registered agent. Your registered agent (also called a resident agent) will be the person or company you designate to accept important notices from the Department of State on your business’s behalf. According to PR Laws Title 14 § 3954, every Puerto Rico LLC must maintain a registered agent. You can serve as your own registered agent, or you can appoint another person or a registered agent service.

Learn why the pros use a registered agent service.

Once you’re ready to officially start your LLC, you’ll need to complete a form called the Certificate of Formation and submit it to the Puerto Rico Department of State online, by mail, or in person. The filing fee is $250.

The Certificate of Formation requires the following information about your LLC:

• Company name. Must include “Limited Liability Company,” Compañía de Responsabilidad Limitada, or the abbreviation ““LLC,” “CRL,” “L.L.C.” or “C.R.L.”
• Principal office. This must be an actual street address in Puerto Rico and will go on the public record.
• Mailing address. You can use a P.O. box here if you want.
• Registered agent. Someone who will accept service of process on behalf of your business.
• Business purpose. This can be specific or general. If you don’t want to be specific, you can write something like, “For any and all legal purposes for which an LLC can be organized in Puerto Rico.”
• Authorized person(s). 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.
• Administrators. The names and street addresses of whoever will be in charge of your LLC after the Certificate of Formation is filed.
• Term of existence. You can either choose a specific date for your LLC to dissolve or choose “indefinite” or “perpetual.” “Perpetual” means you ideally want your business to continue forever, whereas “indefinite” means you expect your business to dissolve at some point, but you haven’t chosen a specific date. Practically, it doesn’t make much difference whether you choose “indefinite” or “perpetual” on this form.
• Effective date. When your LLC becomes official. Your LLC can either become effective immediately (most common) or on any date up to 90 days in the future.
• Signature. 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.

An operating agreement (or limited liability company agreement) is a legal document that outlines the rules and procedures of an LLC. It’s where your members decide how you will distribute profits and losses, how you’ll vote to make changes, and even what you’ll do if you need to throw in the towel and dissolve the business.

Your operating agreement will be an internal document, so you should keep it on record at your business, rather than submitting it to the Puerto Rico Department of State. In the absence of an operating agreement, your LLC will be governed by Puerto Rico’s default laws for LLCs.

Check out our attorney-drafted Puerto Rico LLC Operating Agreement.

Once your Certificate of Formation has been approved by the Department of State, it’s time to apply for an EIN. An EIN (which stands for Employer Identification Number) is a number given to a business by the IRS for identification on tax forms. It’s basically a social security number for businesses. You can get an EIN for free from the IRS. The fastest way is to apply online, but if you don’t have a social security number, you’ll need to mail in the paper form.

Learn How to get an EIN for your LLC.

Your LLC needs its own bank account to maintain its limited liability status. Why? Having limited liability status means that your LLC is legally a separate entity, with its own assets, interests, and liability. If your LLC’s funds are mixed in with the owners’ personal money, a court could decide that your LLC is not a true separate entity, which could jeopardize your limited liability.

• Puerto Rico LLC Certificate of Formation (a copy is fine)
• the LLC’s operating agreement
• the LLC’s EIN
• an LLC Resolution to Open a Bank Account (if your LLC has more than one member).

If your LLC has more than one member, use our free LLC Resolution to Open a Bank Account.

Now that your LLC has a bank account, it’s time to fund it! All LLC members need to make an initial contribution to pay for their membership interest. This typically means each member writes a check to the LLC bank account. Alternatively, members could contribute property or services to the LLC. Just be aware that if members invest property or services, there’s likely to be a tax event.

Puerto Rico LLCs need to submit 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.

Scared you’ll forget? Let us file your Puerto Rico Annual Statement for you.