How to Start a Limited Liability Partnership in Ohio | 2024 Guide

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Start a Limited Liability Partnership in Ohio

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Ohio. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Ohio, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Ohio LLP, all the steps in this article must guide you.

Steps in Starting a Limited Liability Partnership in Ohio

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Ohio, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Ohio General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

– WEBINARCARE EDITORIAL TEAM

Steps in Starting a Limited Liability Partnership in Ohio

To form a limited liability partnership in Ohio, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Statutory Agent, filing for Articles of Organization, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Ohio, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Ohio business registry. Ensure that your chosen name follows Ohio naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Ohio Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Ohio- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Ohio Secretary of State business name database and Ohio Business Name Search. If the name is available, you may choose to reserve it for a specific period of some time by filing a name reservation application and paying the online name reservation fee of $39 and mail name reservation fee of $39. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail, and in person, which varies by county. In addition, the DBA’s validity in Ohio is five years, which you can file in the Ohio Secretary of State.

You can check out how to file a DBA in Ohio for clearer understanding.

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Step 3: Designate a Statutory Agent

In Ohio, you’ll need to designate a Statutory Agent for your LLP. The Statutory Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Ohio Statutory Agent Services to serve as your LLP’s Statutory Agent, ensuring that they meet Ohio requirements.

However, If you plan to become a Statutory Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Ohio Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Ohio Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Ohio laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Ohio. The default laws in Ohio might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Ohio Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Ohio Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Ohio.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Ohio LLP. Additionally, obtain the necessary Ohio Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Ohio to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Biennial Reports with the Ohio Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Ohio, and local levels.

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Advantages of Forming a Limited Liability Partnership in Ohio

While the specific advantages of forming an LLP in Ohio can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Ohio:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Ohio.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Ohio may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Ohio.

Cost of Forming an LLP in Ohio

The cost of forming an LLP in Ohio may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Ohio Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Ohio instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership in Ohio?
A limited liability partnership in Ohio is a business structure that protects the personal assets of the partners from the debts and liabilities of the business.
How many partners can there be in a limited liability partnership in Ohio?
Ohio law requires at least two partners to form a limited liability partnership.
Can an Ohio limited liability partnership have limited partners?
No, Ohio law does not allow for limited partners in a limited liability partnership.
What are the filing requirements for an Ohio limited liability partnership?
In Ohio, a limited liability partnership must file a registration statement with the Ohio Secretary of State’s office.
What fees are associated with forming an Ohio limited liability partnership?
The filing fee to register an Ohio limited liability partnership is $125.
How is a limited liability partnership in Ohio taxed?
An Ohio limited liability partnership is not subject to corporate income tax, but instead, the partners report their share of income and losses on their personal tax returns.
What liability protection does a limited liability partnership provide in Ohio?
A limited liability partnership in Ohio protects the personal assets of the partners from the debts and liabilities of the business.
Can an Ohio limited liability partnership be sued?
Yes, a limited liability partnership in Ohio can be sued, but the personal assets of the partners are protected.
What happens if an Ohio limited liability partnership can’t pay its debts?
If an Ohio limited liability partnership can’t pay its debts, the partners are only responsible for the amount of their investment in the partnership.
Are there residency requirements for partners of an Ohio limited liability partnership?
There are no residency requirements for partners of an Ohio limited liability partnership.
What is required to change the partners of an Ohio limited liability partnership?
To change the partners of an Ohio limited liability partnership, the partnership agreement must be amended and a new registration statement must be filed with the Ohio Secretary of State’s office.
Are there annual reporting requirements for an Ohio limited liability partnership?
Yes, an Ohio limited liability partnership must file an annual report with the Ohio Secretary of State’s office and pay a $50 fee.
What happens if an Ohio limited liability partnership fails to file its annual report?
If an Ohio limited liability partnership fails to file its annual report, it can be administratively dissolved by the Ohio Secretary of State’s office.
What is a registered agent in Ohio and why is it required for a limited liability partnership?
A registered agent in Ohio is a person or company designated to receive legal documents on behalf of the limited liability partnership. It is required to have a registered agent when forming a limited liability partnership.
Can a partner in an Ohio limited liability partnership also be a registered agent?
Yes, a partner in an Ohio limited liability partnership can also be the registered agent for the partnership.
How long does it take to form an Ohio limited liability partnership?
It typically takes 5-7 business days for the Ohio Secretary of State’s office to process a registration statement for a limited liability partnership.
Can an Ohio limited liability partnership have a fictitious name?
Yes, an Ohio limited liability partnership can operate with a fictitious name, but it must be registered with the Ohio Secretary of State’s office.
What is the difference between a limited liability partnership and a limited liability company in Ohio?
A limited liability partnership in Ohio is a business structure comprised of two or more partners who share in the profits and losses of the business and are protected from the debts and liabilities of the partnership. A limited liability company is a business structure with one or more members who are protected from the debts and liabilities of the business.
Can an Ohio limited liability partnership convert to a different business structure?
Yes, an Ohio limited liability partnership can convert to a different business structure, such as a limited liability company or a corporation.
Can a single-member limited liability company in Ohio convert to a limited liability partnership?
Yes, a single-member limited liability company in Ohio can convert to a limited liability partnership if it adds at least one partner.
Can partners in an Ohio limited liability partnership be held personally responsible for the negligence of another partner?
Yes, a partner in an Ohio limited liability partnership can be held personally responsible for the negligence of another partner.
Is professional liability insurance necessary for an Ohio limited liability partnership?
Professional liability insurance may be necessary for certain professions, such as medical or legal, but is not required for all limited liability partnerships in Ohio.
What kinds of businesses most commonly form limited liability partnerships in Ohio?
Law firms, accounting firms, and other professional services businesses commonly form limited liability partnerships in Ohio.
Are there any restrictions on the naming of an Ohio limited liability partnership?
Yes, Ohio law requires the name of a limited liability partnership to include the words “Limited Liability Partnership” or the abbreviation “L.L.P.”
Can an Ohio limited liability partnership do business in other states?
Yes, an Ohio limited liability partnership can do business in other states, but it must first register as a foreign corporate entity in each state in which it operates.
Can an Ohio limited liability partnership sell ownership interests to investors?
No, Ohio law does not allow limited liability partnerships to sell ownership interests to investors.
Are employees of an Ohio limited liability partnership considered partners?
No, employees of an Ohio limited liability partnership are not considered partners unless they have an ownership interest in the business.
What records must an Ohio limited liability partnership keep?
An Ohio limited liability partnership must keep records of all transactions, account books, tax records, and written partnership agreements.
What is a limited liability partnership (LLP) in Ohio?
An LLP is a partnership where all partners have limited liability protection in Ohio.
How many members are required to form an Ohio LLP?
At least two people are required to form an Ohio LLP.
Can an Ohio LLP be formed by just one person?
No, an Ohio LLP cannot be formed by just one person.
Is a registered agent required for an Ohio LLP?
Yes, an Ohio LLP must have a registered agent who is located in Ohio.
Can an out of state resident be an Ohio LLP’s registered agent?
No, the registered agent for an Ohio LLP must be located within Ohio.
How do I choose a name for my Ohio LLP?
You can choose a name that is unique and not already taken in Ohio. You can browse the Ohio Secretary of State website to confirm availability.
How do I check if my Ohio LLP name is available?
You can check online through the Ohio Secretary of State’s website to ensure that your desired name is available.
How do I register my Ohio LLP?
You can file the necessary paperwork and fees with the Ohio Secretary of State’s Office.
Can I file for an Ohio LLP online?
Yes, you can file for an Ohio LLP online through the Ohio Secretary of State’s website.
What documents do I need to form an Ohio LLP?
You’ll need to fill out a certificate of formation and pay the necessary fees, along with any additional documents requested by the Ohio Secretary of State.
What is the cost of forming an Ohio LLP?
The cost of forming an Ohio LLP varies depending on the state.
How do I obtain a tax ID number for an Ohio LLP?
You can obtain a tax ID for your Ohio LLP through the Internal Revenue Service website.
Does an Ohio LLP need to file an annual report?
Yes, an Ohio LLP is required to file an annual report with the Ohio Secretary of State.
What are the filing fees for an annual report for an Ohio LLP?
The filing fees for an annual report for an Ohio LLP vary depending on the state.
Can I change my OH LLP name after formation?
Yes, you can change your name by filing a certificate of amendment with the Ohio Secretary of State.
How do I dissolve my OH LLP?
You must file a certificate of dissolution and pay the necessary fees to dissolve your OH LLP.
Can partners be added or removed after the OH LLP formation?
Yes, partners can be added or removed from an OH LLP after formation.
Can an Ohio LLP have an office outside of Ohio?
An OH LLP can have an out-of-state office, but their registered agent must be located within Ohio.
Are OH LLPs taxed like corporations or partnerships?
Tax classifications of LLPs are different depending on state laws, but Ohio LLPs are generally taxed like partnerships.
What are the liability protections an Ohio LLP provides?
Ohio LLPs provide limited liability protections for partners.
Is an operating agreement required for an Ohio LLP?
No, it is not required in Ohio, but recommended to prevent conflicts should disagreements arise.
Can an out of state partnership register as an OH LLP?
Out of state partners are allowed ownership in Ohio LLP.
Are there differences in formation procedure for domestic or foreign LLCs in Ohio?
The formation procedure and requirements are identical for domestic or foreign LLPs in Ohio.
Can out-of-state owners manage an Ohio LLP?
Yes, ownership and management can be conducted remotely to a certain degree.
Who governs Ohio LLPs?
LLPs in Ohio are governed by the Ohio State Legislature.
Where do I find Ohio LLC laws?
Ohio LLC laws can be found within the Ohio State Legislature’s Codified Ordinances.
Can Ohio LLCs of any type distribute assets?
Both domestic and international OH LLPs distribute-assets according to their individual foundation papers.
How do Ohio LLPs differ from other types of businesses?
The major difference between OH LLPs and other businesses is the limited-liability membership, minimizing personal financial risk.
What financial records is an LLP required to maintain in Ohio?
Ohio exhorts with various different business designations on financial standards, and each LLP’s qualifications are unique and dictactated by state law.

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Conclusion

Starting an LLP in Ohio may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Ohio.

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