In most cases, you won’t go wrong by choosing a limited liability company as your business structure. Whether you organize a startup or launch a venture aimed at potential growth, an LLC will perfectly meet your business needs. The only thing is that LLCs are legal forms regulated by state laws, so before delving into the formation process, make sure you are aware of law requirements stipulated in the state of formation. Plan to start an LLC in Ohio? In our article, you’ll find detailed info on how to form a business in this state. Everything you need to know, from a naming guide to Ohio LLC filing requirements to maintenance aspects to helpful LLC formation services, is thoroughly structured and laid down below. So, take some time and keep reading.
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By and large, the whole business formation process can be split into two stages. The first one is a registration stage, which covers some preparation steps, and LLC filing itself. This is actually setting up your business as a legal entity and giving it a lawful form.
You already have a promising business idea in your head and even a plan on how to bring it to life. And do you know what you’ll call your venture? To register a business in Ohio, you need to invent a name for it first. Naming a limited liability company is mostly about your own creativity. Yet, a legal name is more than a mere formality. A properly selected and formulated moniker makes a statement and sets up the first impression about your business. It can either attract or repel customers, and it certainly contributes to the overall image of your business. Besides, it’s a part and parcel of Ohio LLC’s corporate style you might use in other states as well. So, treat business naming with diligence and do your best to come with an original name version. For that:
However, it’s worth keeping in mind that a business name in Ohio should be not only memorable and catchy but also permissible, i.e. it should meet specific naming requirements valid in the state:
It’s advisable that you invent more than one name option since chances are great some versions can turn out occupied. Once you have several prospective name samples at hand, your next steps are as follows.
Before you simply enter the name version you like to the Articles of Organization, you need to perform an Ohio LLC search to make sure the targeted business name is available in this state. Luckily, the whole procedure is fairly easy. On the Ohio Secretary of State’s website, you’ll find a business name search bar where you can enter your name versions and check them.
If the desired name appears unavailable, you’ll have to modify it or try another version. Yet, if the name you want is free, don’t think too long until some other business snatches it from you. You should either rush up with filing your incorporation documents with the state or reserve the name you like. Both methods will keep the chosen business name for you. Formal registration will make the business name yours for the period of your company’s existence, while the name reservation puts it on hold for a certain period of time. Unless you use this name within that period, it will become available to other companies again. The name reservation period in Ohio is as long as 180 days, and it’s by far the longest in the US. You can register the name reservation application in three ways:
Online
Just fill in a digital form and file it via the governmental portal.
Print out a paper form and mail it to the address:
Office of the Ohio Secretary of State
P.O. Box 13697
Austin, Ohio 78711-3697
Both options are subject to standard processing within 3-7 business days that will cost you $39.
Expedited Processing
If you want your business name to be put on hold faster and rest assured the chosen name is yours until you are ready to file, you can select a speedy or rush name reservation registration. Your application will be handled in two days if you pay $100 in extra and send the document package to:
P.O. Box 1390
Columbus, OH 43216
Meanwhile, if you personally deliver your docs to:
the Client Service Center, Suite 103
80 E. Broad St.
Columbus, OH 43215
they will be processed within one day or in four hours at $200 and $300 accordingly.
An ID number is something both a physical and a legal person needs in the US. While individuals have a social security number, businesses normally get an EIN to settle taxes, open bank accounts, obtain third-party financing, and be entitled to hire employees.
An LLC EIN is not a requirement to start a business in Ohio. Yet, at some point, you’ll need it, so it’s better to acquire it in advance when completing formation formalities. How to get an EIN for your Ohio business? Well, it’s very simple. You just need to apply for it with the IRS, and the procedure is free of charge.
Fill in a digital form on the IRS website and obtain your EIN number immediately. You can apply for it any time from 7 am to 10 pm on weekdays. Remember to have your personal tax number at hand, though.
Download the Form SS-4, complete it, print it out, and fax it to:
(855) 641-6935
Faxed applications are processed within 4 business days.
The above paper Form SS-4 can be also posted to the following address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
However, in this case, get ready to wait for a whole month until you receive your LLC EIN.
What they call a registered agent in many other states is called a statutory agent in Ohio. This function in the LLC structure is quite an important one, despite the fact that it might seem a formality from the start. Creating an LLC in Ohio or in any other state, you have to appoint a registered agent for your future company since this role is a consistent connection point between your business and state bodies. An Ohio statutory agent will handle essential correspondence on your behalf that covers notifications, services of process, lawsuits, and other regulatory notices and communications from state agencies, local authorities, and other governmental bodies. Normally, those communications have high priority and might set deadlines for taking some actions, hence a registered agent will keep you timely informed of that. This way, this LLC role helps maintain your business in good compliance with the state while releasing you from paperwork routines.
To appoint a statutory agent in Ohio, you just need to enter the assignee’s name and address to your Articles of Organization before filing the papers with the state. As for the statutory agent requirements, any individual or legal person residing in Ohio, having a permanent physical address in the state, and being available under that address during business hours on weekdays can be your statutory agent.
If you decide to make an individual serve as your registered agent, you can delegate this responsibility to any adult over 18 years of age, who is an Ohio resident. Speaking of special training or expertise, there are no legal requirements for that. However, we strongly recommend that you choose a statutory agent between persons with some professional background and knowledge of LLC laws. This could be your accountant, lawyer, attorney, tax expert, or financial specialist.
In case you want to appoint a legal entity to be your Ohio statutory agent, one of the registered agent services is by far your best alternative. Normally provided by LLC formation companies, these services are available nationwide. So, even if you decide to foreign qualify in any other state, you’ll easily assign the same statutory agent service there. In our opinion, Harbor Compliance is one of your best choices in this concern. Besides, those companies can handle not only the registered agent service for you but also the whole formation process. And it won’t cost you a fortune.
Straight off the reel, this document is not required by law to complete Ohio LLC formation. Yet, it is a crucial paper to do business in Ohio, as well as in any other state. What is an Operating Agreement then?
By and large, an Operating Agreement is a company bylaw that serves as an essential internal regulatory tool for LLCs. It sets up a sort of inner regulatory structure for day-to-day business management and operation. Normally, it covers such aspects as:
With an Operating Agreement in place, you’ll avoid conflicts and disagreements between the LLC owners and managers while making your business look more credible and trustworthy in the eyes of potential partners, investors, and financial institutions since this document makes your business structure more organized and well-formed. In the meantime, at a legal level, an Operating Agreement prevails over default state laws giving you an opportunity to rule and govern your business in a more personalized manner.
When it comes to writing an Operating Agreement, there is no fixed legal form for this doc, and you can make it up on your own by using one of the multiple templates available online. And you don’t have to be a legal expert for that. However, if you don’t feel confident enough to draft an Operating Agreement by yourself or want it to closely reflect your business situation, you can delegate this task to a professional. Think about an attorney? We have a more affordable option to offer. Consider an LLC service for that such as LegalZoom, for example. Making a customized Operating Agreement a part of their formation bundles, they will not only draft an Agreement but also file an LLC for you at the cost of only an Operating Agreement you’d pay to a lawyer.
At this point, you’ve come to the actual business formation. It’s the Articles of Organization that makes your business legally formed when approved by the state. And this will be your main formation document. By form, the Articles of Organization is a generic document covering your basic business information such as members’ and managers’ names and addresses, the LLC formation date, registered agent data, and company purpose. With that, you can easily draft this document by yourself if you follow the DIY formation route, or an LLC service will provide an adapted template and file it for you if you choose one of these incorporation companies to be your assistant. To submit the documents to the Ohio Secretary of State, you can choose one of the following methods:
Digital filing is one of the most convenient ways since you can do it from anywhere in close to no time. Just sign up with the Ohio Business Portal and stick to comprehensible instructions there.
If you prefer sending documents in a paper form, feel free to mail them to:
Office of the Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
Both online and mailed applications are considered within about 7 business days at a flat rate of $99. However, you can choose expedited filing options if you are in a hurry.
The state of Ohio gives you an opportunity to cut down the turnaround time to two days, one day, and only four hours by paying $100, $200, and $300 accordingly. Yet, to make use of two-day filing, you need to mail your documents to:
Office of the Ohio Secretary of State
P.O. Box 1390
Columbus, OH 43216
Meanwhile, one-day and four-hour processing calls for handling the documents in person to:
Client Service Center, Suite 103
80 E. Broad St.C
Columbus, OH 43215
Formally, as soon as you get your Articles of Organization, your Ohio LLC is considered a legal entity operating under state laws. Yet, to maintain business compliance with the state, there are some more regulatory requirements you need to match. While Ohio doesn’t require filing an annual report like many other states, nobody’s canceled licensing and taxation requirements.
For many types of activities and certain professions, it’s not enough to get an LLC in Ohio. You’ll also have to apply for some Ohio business licenses. Some of them are of a more generic nature and are issued at the state and federal level while others are specific to the county or a city you operate in. Anyway, to get a full list of licenses and permits your business is exposed to in Ohio, simply check the government Licensing webpage. Most often than not, licenses are payable on an annual basis but you have to register for those first. So, don’t put this task into cold storage.
Taxation is by far the trickiest of all business-related issues. Yet, a big plus about LLCs is their flexibility in this concern. Normally, you’ll have to pay business taxes at federal, state, and local levels. But LLCs make federal and state taxes fairly easy and to find out all tax payments you’ll have to settle in Ohio, you can simply check with the Ohio Department of Taxation.
Taxed as passed-through entities, LLCs are exempt from filing federal income tax reports. Instead, company incomes are reported on the personal tax returns of business owners. You’ll only have to submit a corporate report if you choose a C-Corp tax status for your LLC.
Overall, state taxes are reported and paid the same way as federal LLC taxes, i.e. on the owners’ tax returns. However, with an annual business turnover exceeding $150,000, you’ll have to pay Commercial Activity Tax in Ohio. If it sounds like your scenario, you need to register for this tax either via the Ohio Business Gateway or by sending a paper application to:
Ohio Department of Taxation
Business Tax Division
P.O. Box 16158
Columbus, OH 43216
Depending on the type of activity your company runs and the locality you operate your business in, you might owe some other taxes such as Sales Tax, Unemployment Tax, Franchise Tax, etc. Again, to register for them, either use the Ohio Business Gateway or send a hard copy of the tax form.
To run an LLC smoothly and without problems, it’s crucial to open a business bank account in Ohio once you have your company formed. This way, you’ll efficiently split your personal and business assets and will make it easier to monitor the company’s cash flows and expenses.
If you’ve read to this point, now, you know all the steps to make to launch an Ohio LLC and you can safely delve into the process on your own and get your Ohio LLC documents to embark on a bigger business journey. Yet, if the formation process still looks rather intimidating or you simply want to avoid formalities, hire an LLC service to help you out with that. One of the best LLC companies will do all the routine jobs for you and can even help you complete many maintenance steps. And their services won’t cost you a fortune.
