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: Everything You Need to Know
To learn how to get an LLC in Ohio, first begin with deciding on the name of the business enterprise created. Start with some research on the internet and compile a list of possible business names. The name of the business enterprise must be available and unique in that no other business has the same name.
The following are guidelines for choosing a name:
- Avoid the words “bank”, “university”, “attorney”, “doctor”, “FBI”, or other state agency names since those 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.
- Check the internet to see if the domain name is available.
- Consider a professional email address using the business name.
Take note that after the business name is formalized, the state requires that the term Limited, Ltd, LLC or L.L.C or the full Limited Liability Company will be added to the name for identification purposes.
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 is responsible for receiving and sending legal papers for the LLC.
Statutory agents are one of the primary contact points for business communications. To take on that position, statutory agents must meet several requirements, such as being a resident of Ohio.
Statutory agents are appointed by the owner, but the owner may carry out the same jobs and duties as the agent.
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 is listed 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, an operating agreement may streamline business functions and assignments. It outlines operating procedures that become agreed upon and states the owner of the company. The State of Ohio defines it as a governing document.
Obtain an EIN
EIN stands for employee identification number, but is also called the Federal Tax ID. The EIN identifies a business entity, unlike the social security number, which is reserved for individuals.
If the LLC formed consists of more than one member, then the IRS insists on having an EIN number on file even if there are no employees hired. Banks also ask for this identification when dealing with an LLC. Federal and State entities also require the EIN on certain forms. Lastly, if the owner chooses a tax structure like that of a corporation instead of a sole proprietorship, an EIN would be required as well.
Applying for an EIN is free of charge and you can apply online or by mail.
Key Steps After Forming a Business
The following are key steps to take after forming a business:
- An owner must go through their financial records and separate their personal accounts from an LLC business bank account. Opening a separate business bank account simplifies the tasks of filing taxes and accounting.
- Consider a separate business card for the LLC so that you may have separate expense records.
- Ohio has an Ohio Business Gateway (OBG) to help register for tax purposes and to find the correct forms. Registration can be done online or by mail.
- Once the LLC is formed, register it with the Ohio State Tax Office.
- A commercial activity tax must be paid.
- Register for unemployment compensation tax and an Employee Withholding Tax for any employees hired permanently or temporarily.
- 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 that 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 is defined as a limited liability company formed in one state that now wishes to do business in another state. The process is 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 is unavailable, 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 to have a trade name or a 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 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 be mailed at PO 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 PO Box 670 Columbus, Ohio 43216
- Expedited service takes 2 business days and cost $100 plus the $125 filing fee goes to Ohio Secretary of State Business Services Division PO Box 1390 Columbus, Ohio 43216
- Expediate 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. It includes:
- All members’ names
- Rights and responsibilities of each member
- Procedure son voting
- Procedure on management
- Procedure on solving disagreement
- Provisions for members buy out
If you have any questions, direct them to the Ohio Secretary of State, which regulates business entity formations. .
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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