How to Get an LLC in Ohio: Everything You Need to Know
How to get an LLC in Ohio begins with deciding on the name of the business enterprise created. 8 min read
How to Get an LLC in Ohio
How to get an LLC in Ohio begins with deciding on the name of the business enterprise created. Start with some research on the internet with the list of possible business names made. The name of the business enterprise must be available. It cannot be a duplicate of another business name in that state.
Try to find a name clients and other businesses can easily find when looking for the product or service. Avoid the words Bank, University, Attorney, Doctor, FBI, or state agencies names since those enterprises take additional licenses to become used legally. To check availability, access the Ohio Secretary of State business name database or go to the State of Ohio website to research.
Once a name becomes decided check on the internet if it can become used as a domain name for a website. Then consider a professional email address using the business name as a basis. This identifies the business and starts the basis of marketing for the business. It ensures others do not use parts of the name for their own purpose.
Understand that after the unique business name becomes created the state will require that the term Limited, Ltd, LLC or L.L.C or the full Limited Liability Company will be added to identify for the public and other businesses the level of the new business.
Choose a Statutory Agent
Naming the business begins the process. At this point, a business owner should nominate a Statutory Agent for the LLC in Ohio. Also known as a registered agent this person or even entity receives and sends legal papers for the LLC.
They become one of the primary contact points for business communications. Requirements for the statutory agent also known as a registered agent list as a person must reside in Ohio or if an entity such as a business authorized to perform transactions in the state of Ohio.
Statutory agents become appointed by the owner, or the owner can perform this duty. When the articles of organization become created the statutory agent must certify they are an Ohio resident by checking a box on the form. After that, the agent can create P.O. boxes for the business with no problems.
File the Articles of Organization
Registering an LLC involves creating and then filing an article of organization with the State of Ohio. A sole owner or a group may create the articles of organization. This document has the group or owner state how the business will operate and who has been assigned to what portion. The operating document must include:
- LLC name
- Contact details
- Purpose of the LLC
- Name, signature, and the address of the registered agent
- Name and signature of the member
- Name and signature of the owner
- Name and signature of the manager
Venues for filing the amendment in the State of Ohio list as online, by mail or delivered personally to the office. If a problem arises with the article of organization, it can become amended at any point by a certificate of amendment. The cost in Ohio lists as $50.
Create an Operating Agreement
Operating agreements have not been required in Ohio, but the court system highly recommends it in case of a dispute. If the LLC organization has more than one member, it becomes highly likely an operating agreement will streamline business functions and assignments. It has overlapping functions with an Article of Organization. It can be filed with the article of organization, but the state of Ohio does not require it. Understand if an operating agreement becomes made it officially becomes a legal document. It outlines operating procedures that became agreed upon and who owns the company. The State of Ohio defines it as a governing document.
Obtain an EIN
EIN stands for employee identification number. If the LLC formed consists of more than one member, then the IRS insists on the EIN even if no employees become hired. Also called the Federal Tax ID the EIN identifies a business entity rather than using the Social Security number which is reserved for individuals. Banks ask for it when dealing with an LLC as well as federal and state tax entities want it on forms. LLC’s can have one member such as the owner. IF the owner believes at some point that they will hire employees, then the IRS suggests getting an EIN even if the LLC has one member. If the owner chooses the tax structure like a corporation instead of the sole proprietorship (disregarded entity), then it will become needed there. Applying for an EIN remains free, and venues list as online, print or by mail.
Key Steps After Forming a Business
An owner must go through their financial records and separate their personal accounts from a LLC business bank account. Opening a separate business bank account makes filing taxes and accounting much simpler. A separate business card makes good business sense for the LLC as well as separate expense records. An owner needs to build the company’s credit reputation rather than add to their own reputation. Ohio has an Ohio Business Gateway (OBG) to help register for tax purposes and to find the correct forms. Registration is online or by mail. Once the LLC forms also register it with the Ohio State Tax office. Also, a commercial activity tax must be paid. Go ahead and register for unemployment compensation tax and an Employee Withholding Tax for any employees hired permanently or temporarily. Next to the Ohio Sales Tax and get a vendor license if the business makes taxable products.
Now it’s time to decide on what accounting process to use. Make sure it offers enough detail that two or three years down the road someone can tell what transaction happened and why. Good accounting simplifies the annual tax filing, helps track company finances, and helps clarifies any issues that come up. Make sure the accounting system classifies transactions as bills, income, or expenses. Find a software that synchronizes with the banking account automatically. This matches transactions to invoices differentiates between bills and purchase orders. An added reward remains an owner can access accounts by phone if necessary.
Federal, state, and local government regulations have licenses and permits too for LLC. Check with the county to see which apply for the locality the business will operate. Obtain a federal business license through the U.S. Small Business Administration. See if the products and services the LLC will make needs coverage this way. State licenses for Ohio can become obtained at the State of Ohio Business page. Check with the Chamber of Commerce for the local license or permits as well. Professional services exist that can find all the license applications needed for the LLC in the industry chosen. Next, consider general liability insurance for the LLC. Ohio does not require it, but in some business enterprises, it may be applicable. Also get Workers Compensation insurance which in the state of Ohio remains required.
Employees of the LLC
Certain legal obligations exist when hiring employees for an LLC in Ohio.
- Employees must be eligible to work in the USA
- Classify employees as regular or new hires
- Offer compensation insurance
- Withhold income taxes
- Provide compliance posters in the work area
How to Maintain Your LLC
Annual reports have not been required in Ohio. Once up and running maintaining an Ohio LLC becomes less documented. If the LLC makes more than $150,000, then the commercial activity tax begins to apply. If the LLC meets maintenance standards of Ohio, then apply for a Certificate of Good Standing. This verifies the LLC formed legally and was appropriately maintained. More than a legal document it can become used to obtain funding. It helps when forming the business as a foreign LLC, when obtaining other permits and licenses and makes an LLC legitimate.
How to Dissolve an LLC
Do not let an LLC fade away. It needs to become dissolved, or an owner may be legally liable for any activity that happens without their knowing it. Penalties include tax liabilities and legal sanctions. Dissolving an LLC involves closing the business tax accounts. A document exists called Articles of Dissolution that needs filing.
Foreign LLC in Ohio
If someone from out of state with a LLC wishes to start an LLC in Ohio, they must create a foreign LLC. A Foreign LLC defines as a limited liability company formed in one state that now wishes to do business in another state. The process remains similar to the original domestic Ohio LLC. Begin by appointing a registered agent for service of process. The agent can be an Ohio resident, an Ohio entity such as a corporation or even a foreign corporation (from another state). It must become licensed in the state of Ohio.
Check in the state of Ohio databases if the name of the business is available. If the name of the business appears not available, then the foreign LLC must create a trade name for use in Ohio. The document file has been titled the Registration of a Foreign Limited Liability Company form 533b. Send the document by mail with the $99 fee. Now the LLC in the original operating state can operate in another state as one entity even though termed a foreign corporation. This document makes it possible to cross jurisdictions.
Preparing to File Your LLC
If an owner wishes a trade name or fictitious name register it by filing a Name Registration form 534A. An owner gets three choices. Navigate to the Secretary of State’s website where the form has been located. Potential owners have the option of reserving a name for at least 180 days by filing the Name Registration form. That preserves the option of using the name while allowing the LLC to organize. It takes a $50 filing fee plus and a mailed registration form. Until the name of the LLC business becomes officially approved, do not market the name, or register a website. It needs approval from the Secretary of State’s office.
The articles of organization have a $125 filing fee. It includes the following information for registration.
- LLC’s name and address
- Name of the registered agent
- Address and signature of the registered agent
- Duration of the LLC if not duration perpetual
- Dissolution Date
Check with corporate lawyers to find legal representation who can serve as a statutory agent for multiple companies.
Filing Your Paperwork
If a prospective owner does not know if the papers will make it on the first pass, it can be put onto preclearance filing for a $50 fee. Then the Secretary of the State office will advise owners as to the acceptability of proposed filing. It has been considered a good option for first-time filers. Checks need to be made out specifically to the “Secretary of State.” It must be submitted in person at 180 E. Broad Street, Suite 103, Columbus, Ohio 43215, or it can become mailed at P.O. Box 670, Columbus, Ohio 43216. It takes one to two business days for clearance. An owner has a choice of service.
- Regular service takes 3-7 business days and costs $125 to P.O. Box 670 Columbus, Ohio 43216
- Expedited service takes two business days and cost $100 plus the $125 filing fee goes to Ohio Secretary of State Business Services Division P.O. Box 1390 Columbus, Ohio 43216
- Expedited service 2 cost $325 must be hand deliver to client service center at 180 E. Broad street Suite 103 Columbus, OH 43215
Setting Up Your Business
The LLC does not become official until the documents become mailed back from the registration office. Make the operating agreement to stable the LLC income and liabilities.
- All members name
- Rights and responsibilities of each member
- Procedure son voting
- Procedure on management
- Procedure on solving disagreement
- Provisions for members buy out
Any questions ask the Ohio Secretary of State which regulate business entity formation.
LLCs offer a good venue for a business to structure and grow. Its ability to accommodate a solo owner to a group makes it versatile. Flexible enough each state has a variant that best suits the business culture in that region. It protects the owner and structures the business as such it remains a separate entity from a person’s personal assets.
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