How to Start an LLC in Ohio | 2024 Guide

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.

To accomplish the steps in starting an LLC, you can hire an LLC Formation Services that will help you build your desired business. We reviewed some of the best LLC formation services and provided features as an add-on with their packages for you to check out.

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 –

LegalZoom – ($0 + State Fee)

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

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How Fast Can I Form an LLC in Ohio

However, one common question that many entrepreneurs have is how quickly they can form an LLC in Ohio. The answer to this question is a bit more complex than one might initially think. While the process of forming an LLC in Ohio is relatively straightforward, there are a few steps that must be followed in order to effectively establish your business entity.

The first step in forming an LLC in Ohio is choosing a name for your business. This name must be unique and not already in use by another business entity in the state. Once you have chosen a name, you will need to conduct a name availability search through the Ohio Secretary of State website to ensure that the name is available for use.

After you have selected an available name, you will need to file Articles of Organization with the Ohio Secretary of State. This document includes important information about your LLC, such as its name, address, registered agent, and statement of purpose. Once the Articles of Organization have been filed and approved, your LLC will officially be established as a legal entity in the state of Ohio.

In addition to filing the Articles of Organization, you will also need to obtain any required business licenses or permits at the state or local level. Depending on the nature of your business, you may need to obtain additional licenses or permits in order to operate legally in Ohio.

The overall timeline for forming an LLC in Ohio can vary depending on several factors, such as the processing time of the Secretary of State’s office and whether all necessary documentation is submitted correctly. In general, however, you can expect the process to take anywhere from a few days to a few weeks.

While forming an LLC in Ohio can be a relatively quick and straightforward process, it is important to take the time to ensure that all steps are followed correctly in order to avoid any potential legal or operational issues down the road. Working with an experienced business attorney or online legal service can help guide you through the process and ensure that your LLC is properly established according to Ohio state law.

In conclusion, while forming an LLC in Ohio can be a relatively quick process, there are several important steps that must be followed in order to effectively establish your business entity. By carefully following these steps and ensuring that all necessary documentation is submitted correctly, you can establish your LLC in Ohio and begin operating your business in a legal and compliant manner.

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.