Indiana LLC: Everything You Need to Know
Starting an Indiana LLC is a relatively straightforward process, but requires you to correctly follow a series of steps in order to be officially recognized by the state.8 min read
Starting an Indiana LLC
Starting an Indiana LLC is a relatively straightforward process, but requires you to correctly follow a series of steps in order to be officially recognized by the state.
Name Your LLC
- Decide on a name for your LLC. Do a thorough search online to make sure the name is available in the state of Indiana. You can conduct this search on the State of Indiana website.
- Decide on a name that is easily recognizable by your target audience. The name you choose much include either Limited Liability Company, L.L.C., or LLC in the title.
- Know what restricted words are. Restricted words (such as university, attorney, or bank) might require a licensed individual like a lawyer or doctor to be a part of your LLC. You will probably also need to fill out extra paperwork.
- Know what prohibited words are. You cannot use words like Secret Service, FBI, Treasury, or anything else that could make people believe your LLC is a state or federal agency.
- Make sure your LLC’s domain name is also available. Even if you don’t have any intention of creating a website for your LLC, you should plan to buy the domain name so no one else can obtain it.
- Create an official email for your LLC by using Google apps.
Choose a Registered Agent
You cannot operate an LLC in the state of Indiana without first appointing a registered agent. A registered agent is either a separate business or an individual who will send and receive legal documents on the LLC’s behalf. An example of a legal document they might send or receive is a service of process of legal action in the event that your LLC is sued. The registered agent would also be responsible for sending, receiving, and keeping track of all filings. When deciding who you will appoint as your registered agent, keep in mind that the registered agent could be one of the members of the LLC or the actual owner of the LLC, but the LLC itself cannot be the registered agent.
Create an Operating Agreement
An operating agreement is not a legal requirement in the state of Indiana, but it is always a good idea to have one anyway. The operating agreement specifies who owns the LLC and how the LLC will be operated. Even though you are not legally obligated to have an Operating Agreement, it is advantageous to have one because it adds more credibility to your LLC and increases your potential to attract new clients or investors.
Obtain an Employer Identification Number (EIN)
You need either an Employer Identification Number (EIN) or a Federal Tax Identification Number for your LLC. Either one of these will act as a social security number for your business entity. You need the LLC’s EIN when filing both state and federal taxes. Most banks will also require you to present an EIN when opening a business checking account.
You can get an EIN for free from the IRS once you have formed your LLC. The EIN can be obtained either by mailing an application form or by filling out an online application.
Separate Personal Assets from the LLC
When you open up a business bank account, it is strongly advisable that you obtain a business debit or credit card too. A business bank account will helps you keep your personal and business finances separate. Tracking your expenses also becomes easier and more efficient when you have a separate business bank account and credit card.
Register Your LLC for Indiana State Tax
By using Indiana’s INtax Service, you can register any employees your LLC has for State Income Tax Withholding and Unemployment Insurance Tax. If your LLC is selling taxable services or goods, you need to register for Sales and Use tax. This can also be done through Indiana’s INtax Service.
You need to set up an efficient accounting system for your LLC. You can do this either by finding a software that works for you or hiring an accountant. Once you begin operating your LLC, you have to carefully track the company finances like expenses, income, and annual tax filings.
Obtain a Business License and Permit
For you to legally operate your LLC in Indiana, your business entity has to comply with government law on the local, state, and federal levels.
â— For local laws, call your local Chamber of Commerce and learn more about any permits or licenses you may need.
â— For state laws, review Indiana’s Business Owner’s Guide for information regarding state registration, licenses, and permits.
â— For federal laws, read the U.S. Small Business Administration Guide.
â— For more detailed information on specific licenses, review Indiana’s Professional Licensing Agency.
Your LLC might need to hire a professional service to thoroughly review all of the licensing requirements for your legal entity. Licensing fees depend on the type(s) of licensing you need to obtain for your LLC.
If you have employees working for you, you will need to obtain Worker’s Compensation Insurance for them. General liability insurance is a valuable asset for LLC, though it is not a legal requirement in many state. The legal obligations an LLC has regarding Worker’s Compensation Insurance varies from state to state, but it is something worth investing in even if you are not required to do so by law. Offering Worker’s Compensation Insurance to your employees protects you from lawsuits (if they accept Worker’s Compensation Insurance, they cannot come back in the future to sue you).
Employee Hiring Compliance
There are employment regulations you must comply with when employing people. Firstly, you have to confirm that whoever you plan to hire can legally work in the United States. Anytime you hire somebody new, you must report “new hires” to the State of Indiana. You must also do things such as submit withholding income tax and provide worker’s compensation insurance.
How to Maintain Your LLC
There are certain filings you have to make periodically when you operate an LLC in Indiana. It is a good idea to research how best to maintain your Indiana LLC so you don’t end up with state penalties for forgetting something.
You will need to file either annual or biennial reports to the Indiana Secretary of State when you operate an LLC. There is a filing fee for doing this. If you do not submit your annual report within 120 days after its due date, your LLC could dissolve. To ensure that this doesn’t happen, make sure that your registered agent will notify you of any filing due dates to confirm that everything is filed on time.
Every two years, you need to file a Business Entity Report with the Secretary of State. This report will be due the anniversary month of your LLC’s official registration. You can file this report in the mail or online. The filing fee is $30 by mail and $22.44 with a $2.44 credit charge fee when filing the report online.
A Certificate of Good Standing is proof that your LLC is in good standing, is properly maintained, and was legally registered with the state. Anytime an LLC wants financial support from lenders, investors, or bank loans, they will need to provide a Certificate of Good Standing.
How to Dissolve an Indiana LLC
You must file the Articles of Dissolution and close any business tax accounts to officially dissolve an LLC. If you don’t do this, you may be subject to tax penalties or cause greater legal problems for yourself.
Choose a Name for Your LLC
When you choose a name for your LLC, it cannot be like any other business name that is already filed with the Indiana Secretary of State. You can check name availability by searching the Secretary of State’s database. If you file an Application for Exclusive Use of Corporate Name, you can reserve the name for 120 days. You can submit this application online or through the email and include the $20 filing fee.
File the Articles of Organization
When filing the Articles of Organization, don’t forget your LLC’s name and address, your registered agent’s name and address, the length of time your LLC has operated and will operate, and information on whether your LLC is managed by a manager or by members.
Comply With Other Tax and Regulatory Requirements
Your LLC may be subject to other local, state, and federal taxes that were not already mentioned. Confirm that you are complying with them by reviewing governmental regulations regarding LLC taxes.
Department of Revenue
Any LLC that plans to employee people or sell taxable goods and services must register with the Indiana Dept of Revenue (DOR). You can register your LLC on paper by filling out Form BT-1, Business Tax Application or by submitting an application online.
Foreign LLCs Doing Business in Indiana
If you register an LLC outside of the state of Indiana but plan to do any business in Indiana, you must register your LLC with the Secretary of State. You can find the Application for Certificate of Authority of Foreign Liability Company on the Secretary of State’s website and either fill out the form there or submit it in the mail. There is a $90 filing fee that must accompany this form.
Registration of an LLC Requires Filing of the Articles of Organization
To officially register your LLC in Indiana, you must file an Articles of Organization with the Secretary of State. You can do this by mailing the document to the Secretary of State or submitting the form online. In the Articles of Organization, you must include your LLC’s name and official address, your registered agent’s name and address, length of operation, management structure, the name of the organizer and the organizer’s address along with a dated signature. The filing fee for this is $90 when you mail the documents and $85 when you submit the documents online. Processing typically takes anywhere from three to five business days. At this point in the LLC registration process, you need to know if your LLC will be managed by a manager or managed by members.
An LLC Treated as a Limited Liability Partnership
If you LLC assume a Limited Liability Partnership structure, you are required to file Form 1065 (United States Return of Partnership Income). Go to the IRS website and download the Schedule K-1 form. On this form, you will list losses and credit along with equal distribution of profits.
An LLC Treated as a C Corporation for Federal Tax Purposes
A C Corporation is required to file Form 8832 (Entity Classification Election) along with Form 1120 (United States Corporation Income Tax Return). Both of these forms can be found and downloaded off of the official IRS website and must be filed with the IRS.
An LLC Treated as an S Corporation
An LLC that is treated as an S Corporation is required to report Schedule C (Form 1040, Profit or Loss from Business). On this form, the business profit and expenses on the owner(s’) personal income tax returns must be reported.
What is Included in Indiana LLC Formation Service?
For a small fee, many professional legal services will offer entrepreneurs LLC formation services. If you want an Indiana limited liability company service, it could cost you approximately $100. If you need an Indiana registered agent service to act as your company’s registered agent, you could expect to pay approximately $125. Generally these services would include filing the articles of organization for the company, state filing with the Secretary of State, the operating agreement for the LLC, help with state filing fees, and registered agent service.
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