How to Start an LLC in Ohio | 2024 Guide

Start a LLC in Ohio

How to Start an LLC in Ohio: If you’re looking to launch a business in Ohio, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Ohio. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Ohio, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in Ohio

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Statutory Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Ohio

After you have decided on the idea to form an LLC in Ohio, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Ohio, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for some time. You must file a name reservation application in Ohio Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Ohio DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in two methods, by mail, and in person. However, before filing a DBA, you should know that you need to renew your DBA for up to five years, which costs varies by county.

Step 2: Hire a Statutory Agent in Ohio

Hiring a Statutory Agent in Ohio is a must since a Statutory Agent is a person or business entity responsible for receiving important legal documents on behalf of your Ohio LLC. Most states require you to designate a Statutory Agent when forming your LLC.

The qualifications of a Statutory Agent vary depending on the jurisdiction. Still, generally, a Statutory Agent must meet the following criteria:

  • Availability: A Statutory Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Statutory Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Statutory Agent, they must be residents of the Ohio where the LLC was formed. A business entity acting as a Statutory Agent must be authorized to do business within that state.
  • Age: A Statutory Agent must be at least 18 years old.
  • Good standing: A Statutory Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Statutory Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Statutory Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Ohio Statutory Agent Services.

Step 3: File your Articles of Organization in Ohio

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Ohio Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Ohio.

1. Obtain the Necessary Forms: Visit the Ohio’s business filing office website, usually the Ohio Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Ohio Secretary of State, P.O. Box 670, Columbus, OH 43216.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $99. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Ohio, typically a stamped and approved copy of the document or a Articles of Organization.

Recommended: Filing formation papers is easy and hassle-free if you hire a professional service. We recommend using –

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Once you have successfully filed your Articles of Organization and it has been approved, your Ohio LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Ohio Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Ohio.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Ohio. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Ohio 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 the 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.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Ohio might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Ohio LLC.

Opening a bank account is necessary for Ohio business. If you are still wondering where to open an account in your Ohio, you should check the Best Bank for Small Business in Ohio.

Step 7: Get a Business and License Permit

You must get a business license in Ohio before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Ohio ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Ohio Secretary of State.

Cost to Form an LLC in Ohio

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Ohio. Articles of Organization costs around $99. The initial filing fee is $99, and the annual fee is $91.

If you forget to pay the annual fee for your Ohio LLC, you will have a penalty of $0 (not required). However, you can check the Ohio LLC Cost for additional information.

Advantages of Creating Ohio LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Ohio. Important benefits will help you set up an LLC in Ohio.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Ohio apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Ohio with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Ohio can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Ohio will protect its assets.

FAQs

Why should I start an LLC in Ohio?
Ohio is ranked among the best states for doing business, with favorable tax rates and a supportive business environment.
What are the benefits of forming an LLC in Ohio?
Some benefits of forming an LLC in Ohio include limited personal liability, pass-through taxation, and a flexible management structure.
How much does it cost to start an LLC in Ohio?
The filing fee for an Ohio LLC is $99 online and $125 by mail or in-person.
What are the requirements for forming an LLC in Ohio?
To form an LLC in Ohio, you must file Articles of Organization with the Ohio Secretary of State. You must also appoint a registered agent and adopt an operating agreement.
Can I be my own registered agent in Ohio?
Yes, as long as you have a physical address in the state and are available during business hours to receive legal documents.
How long does it take to form an LLC in Ohio?
It typically takes the Ohio Secretary of State around 3-5 business days to process LLC filings.
Can a non-resident of Ohio form an LLC in the state?
Yes, anyone can form an LLC in Ohio as long as they submit the required paperwork and meet the state’s qualifications.
Are there any annual fees for an Ohio LLC?
Yes, Ohio LLCs are required to file an annual report which includes a $35 filing fee due each year.
What will my LLC name need to include in Ohio?
The LLC name must end with either “LLC” or “Limited Liability Company.”
Can I change the name of my Ohio LLC?
Yes, you can change the name of your Ohio LLC by filing an Amendment with the Ohio Secretary of State.
What taxes will my Ohio LLC need to pay?
Ohio LLCs are subject to state taxes, as well as federal taxes like income tax and self-employment tax.
Does Ohio offer any tax incentives for LLCs?
Yes, Ohio offers a variety of tax incentives for businesses, including tax credits for job creation and investment.
Do Ohio LLCs need to have state and/or federal licenses or permits?
Depending on the industry, Ohio LLCs may need licenses and permits at both the state and federal levels.
Can an Ohio LLC have investors?
Yes, Ohio LLCs can have investors, but they must follow certain regulations and file appropriate securities disclosures.
Can an Ohio LLC have multiple owners?
Yes, Ohio LLCs can have multiple owners, known as members.
What kind of liability protection does an Ohio LLC offer?
Ohio LLCs offer limited liability protection to its owners, meaning their personal assets are shielded from the business’s liabilities and debts.
Can an Ohio LLC convert to another business structure down the line?
Yes, an Ohio LLC can be converted to another business structure, such as a corporation, by filing the appropriate paperwork.
Are Ohio LLCs subject to sales tax?
Ohio LLCs that sell goods or services subject to the state’s sales tax are required to collect and remit taxes to the Ohio Department of Taxation.
What happens if I miss the annual report deadline for my Ohio LLC?
If you miss the deadline for your Ohio LLC annual report, you will be assessed a late-filing fee.
Can I dissolve an Ohio LLC at any time?
Yes, Ohio LLCs can be dissolved voluntarily by filing Articles of Dissolution with the Ohio Secretary of State.
Does the operating agreement for an Ohio LLC need to be in writing?
While recommended, Ohio does not require LLC operating agreements to be in writing.
How are Ohio LLC profits taxed?
Ohio LLCs are typically taxed as pass-through entities, meaning profits and losses are reflected on each member’s individual tax returns.
What is a domestic LLC in Ohio?
A domestic LLC in Ohio is one that was formed and operates in the state.
Can I file an Ohio LLC online?
Yes, Ohio LLCs can be filed online through the Ohio Secretary of State’s website.
Can an Ohio LLC sue or be sued in court?
Yes, Ohio LLCs can sue or be sued in court, but only in their capacity as a business entity.
What distinguishes an Ohio LLC from an Ohio corporation?
Ohio LLCs and corporations both offer limited liability protection, but they differ in terms of ownership structure and management.
Can an Ohio LLC be formed for non-profit purposes?
Yes, Ohio allows for the formation of non-profit LLCs, though they must meet certain state and federal requirements.
Does Ohio recognize Series LLCs?
Yes, Ohio recognizes Series LLCs, which are a type of LLC structure that enables multiple SERIES within one entity.
What is an LLC?
LLC stands for Limited Liability Company. A type of business entity that combines the legal protection of a corporation with the tax benefits of a partnership.
How do I start an LLC in Ohio?
To start an LLC in Ohio, you need to file the proper forms with the Ohio Secretary of State’s office.
What are the filing fees for starting an LLC in Ohio?
The filing fee for starting an LLC in Ohio is $99 plus an additional $50 if you choose expedited processing.
What information do I need to file the LLC forms in Ohio?
You’ll need to provide the name of your LLC, a business address, the registered agent’s name and address, the names of the LLC members, and a brief business description.
Can I use an online legal service to form my Ohio LLC?
You could use an online legal service to form your Ohio LLC, but keep in mind that they won’t be able to provide legal advice.
Do I need a lawyer to start an LLC in Ohio?
You don’t need a lawyer to start an LLC, but an attorney can provide valuable legal advice.
Can a non-US resident start an LLC in Ohio?
Yes, a non-US resident can start an LLC in Ohio.
Is there an age requirement to start an LLC in Ohio?
There is no age requirement to start an LLC in Ohio.
What is a registered agent?
A registered agent is the person who will receive legal documents and notices on behalf of your LLC.
Should I appoint myself as a registered agent?
You can appoint yourself as a registered agent, but it’s often better to hire an outside company to avoid any conflicts of interest.
Is a business license required to start an LLC in Ohio?
You may need a business license depending on your industry, but it’s not required when forming an LLC itself.
Can an LLC have multiple members?
Yes, an LLC can have multiple members.
Can an LLC be managed by its members?
Yes, an LLC can be managed by its members or a designated manager.
What is the Ohio LLC annual tax fee?
The Ohio LLC annual tax fee is $150.
Can an Ohio LLC have a non-US resident member?
Yes, an Ohio LLC can have a non-US resident member.
Who needs to sign the Ohio LLC formation documents?
The Ohio LLC formation documents must be signed by at least one organizer or member of the LLC.
How can I obtain an EIN number for my Ohio LLC?
You can obtain an EIN number for your Ohio LLC for free on the IRS website.
Are LLC names protected in Ohio?
If your LLC name is unique and not too similar to existing LLCs or corporations in Ohio, it will be protected.
What is a foreign LLC?
A foreign LLC is a limited liability company that was formed in another state but operates in Ohio.
Can a foreign LLC conduct business in Ohio?
Yes, a foreign LLC can conduct business in Ohio.
What is Ohio’s LLC operating agreement?
An operating agreement is a legal document that outlines the ownership and operating procedures of an LLC, it is required in Ohio.
Do I need to file an Ohio LLC annual report?
Yes, Ohio LLCs are required to file an annual report.
Can I change my LLC’s name in Ohio after formation?
Yes, you can change your LLC’s name in Ohio by filing the necessary paperwork.
Can I cancel an Ohio LLC?
Yes, you can cancel an Ohio LLC by filing a Certificate of Dissolution.
Can I operate multiple businesses under one Ohio LLC?
Yes, you can operate multiple businesses under one Ohio LLC provided that the businesses are related.
Will I need to file for an Ohio tax ID or sales tax ID?
It depends on your business, but you may need to file for both an Ohio tax ID and sales tax ID.
Are LLC members liable for business debts?
Typically, LLC members are not personally liable for business debts and obligations.
How often do Ohio LLCs need to renew their registration?
Ohio LLCs need to renew their registration every five years.

Also Read

How Fast Can I Form an LLC in Ohio

One of the key factors in how quickly you can form an LLC in Ohio is how prepared you are before you begin the process. Having all of your necessary information and documents ready to go can significantly expedite the process and help you avoid any delays. Before you start, make sure you have chosen a unique name for your LLC that complies with Ohio’s naming requirements, have your registered agent selected, and have a clear understanding of your LLC’s purpose and management structure.

Once you have all of your information in order, you can begin the process of filing the necessary paperwork with the Ohio Secretary of State. Fortunately, Ohio offers the convenience of online filing for LLC formation, which can help speed up the process significantly. You will need to complete and submit the Articles of Organization, along with the necessary filing fee, to the Ohio Secretary of State. Once your paperwork has been reviewed and approved, you will receive a Certificate of Organization, officially establishing your LLC.

In Ohio, forming an LLC can typically take anywhere from a few days to a few weeks, depending on the current processing times and any additional requests for information that may arise. To ensure a fast and smooth process, it’s important to double-check all of your paperwork for accuracy and completeness before submitting it, as any errors or missing information can cause delays.

Another factor that can impact the speed of forming an LLC in Ohio is the availability of your chosen LLC name. If the name you have selected is already in use by another business in Ohio, you will need to choose a new name before your LLC can be approved. To avoid this potential delay, it’s a good idea to have a few backup names in mind in case your first choice is unavailable.

Overall, forming an LLC in Ohio can be a relatively quick and streamlined process if you are prepared and organized. By having all of your information in order, double-checking your paperwork, and being flexible with your LLC name, you can help expedite the process and have your new business up and running in no time. With a proactive approach and attention to detail, you can navigate the process of forming an LLC in Ohio efficiently and effectively.

Conclusion

In conclusion, starting an LLC in Ohio is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Statutory Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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