Forming an LLC in Indiana is fairly cheap and straightforward. The process is simple and to the point, so there isn’t a significant hurdle to those who want to take their business idea to the next level. This quick guide is intended to provide pertinent information on how to set up your Indiana LLC.
An LLC is a legal business structure that protects your personal assets in case your business is sued. It provides liability protection, without going deep into the official encumbrance of other structures. While running a business is the common approach to LLCs, you can also use an LLC to hold assets like real estate, vehicles, etc.
Creating your Indiana LLC requires filing the Articles of Organization with the Indiana Secretary of State. Here are some steps to follow when starting your LLC.
1. Choose A Name For Your Indiana LLC
The first step is to choose a name for your Indiana LLC registration. The name you choose must be unique and distinguishable from previously existing entities in the state. So, as you think of the name for your LLC, it’s also important to check if it’s available.
You can use the Department of Business Services Database to search for desired names and see if they’re available. Once you have a name, consider searching the USPTO website to ensure there are no trademark issues.
Proper Designator For Your IN LLC
LLC names in Indiana should end with a proper designator. This is usually the words LLC, Limited Liability Company, and other accepted variations. These include:
- Limited Liability Company
Reserving A Name For Your LLC (Optional)
It is possible to reserve a name for your Indiana LLC without setting up a company. To do this, you’ll have to file a form using the InBiz system of the Business Services Division, of the Indiana Secretary of State.
Once approved, a name reservation request is valid for 120 days. The filing fee is $20.
2. A Registered Agent For Your LLC In Indiana
Maintaining a registered agent in Indiana is mandatory for all LLCs in the state. A registered agent is a person or entity who agrees to receive service of process on behalf of your LLC. Service of process includes legal documents like lawsuits, summons, subpoenas, etc. The agent may also receive conventional communication like tax reminders and notices.
As such, a registered agent must have a physical street address within the state. Additionally, they should be available during normal business hours to receive the service of process (if and when necessary).
Any adult who is a legal resident of the state, or a business entity permitted to do business in the state can function as the registered agent. They just need to have a physical street address as PO box addresses are not allowed.
So you, your friends or family, another business entity, or a commercial registered agent can fulfill that role. A lot of people choose a commercial registered agent simply for convenience.
You can reasonably expect the registered agent to be available through normal business hours on practically all working days. Meanwhile, individuals functioning as agents may need vacations or be otherwise away, thus creating the potential of missing important communication.
Another advantage comes in the form of privacy. The address of a registered agent is a matter of public record. By hiring a commercial agent, your address private (or that of your friends/family).
3. Filing Indiana Articles Of Organization
Filing Indiana Articles of Organization with the secretary of state is the biggest step in forming your LLC. Your LLC comes into existence once the state approves the articles of organization. Filing articles of organization is the same as Indiana LLC filing. This document can be submitted online or via mail.
Filing Indiana LLC Articles of Organization online will need the use of the state’s INBiz system. This system makes use of the Access Indiana sign-in portal. If you don’t already have an account, you’ll be prompted to create one. Registration for Access Indiana is free.
Online submission works pretty fast, and you can expect approval within 24 hours.
If filing via mail, you’ll have to use State Form 49459. This form is available on the Indiana Secretary of State website under the Limited Liability Companies section. After you’ve downloaded and completed the form, you can mail it along with the filing fee to:
Secretary of State
Business Services Division
302 West Washington Street
Indianapolis, IN 46204
Indiana LLC Cost
The Indiana LLC Cost or the Articles of Organization filing fee varies slightly depending on the mode of submission. The time taken for Indiana LLC registration too is dependent on the mode of filing.
If you choose to file online, the filing fee is $95. The documents are usually approved within 24 hours of submission.
Filing via mail requires a filing fee of $100, payable via check or money order. These should be made payable to the “Secretary of State”. The processing time for submissions via mail can be 5-7 business days.
On approval of your Indiana LLC, you’ll receive an approval letter, a Certificate of Organization, and a stamped copy of the approved Articles of Organization.
4. Operating Agreement For Your LLC
An operating agreement is not a requirement but is highly advisable for your Indiana LLC. This agreement is a document that lays down the groundwork for the operation of your LLC. It provides an understanding between LLC members on the operation and functioning of the company.
You can include several details in this agreement. These include the listing of members, their roles and responsibilities (if any), what percentage of the company is owned by each member, and so on. Other relevant factors like approach to taxation, business, hiring, etc. too can form a part of this agreement.
While its relevance is immediately visible for multi-member LLCs, single-member LLCs should have a basic agreement as well.
Operating Agreements are internal documents of your LLC and don’t need to be filed with any government agency. However, you should keep it on file so that it’s available as and when needed.
5. Getting A Federal Tax ID (EIN)
Your LLC will need a federal tax ID or EIN (Employer Identification Number). This number can be obtained for free by registering with the IRS. Apply for the EIN only after your LLC has been approved. Not all LLCs need an EIN, but you should get one as you’ll need it for several aspects of the company.
The simplest way to get an EIN is by filing online. This process is quick and efficient. It’s worth noting that even for multi-member LLCs, the IRS will require information of only one member for filing. This person becomes the responsible party for communicating with the IRS.
In case you don’t have an SSN or if the LLC is owned by another business entity, online filing may not be possible. This will require filing Form SS-4 with the IRS. It’s not possible to submit Form SS-4 online; you’ll have to submit it via fax or postal mail.
Submissions via fax work faster, and you can receive your EIN within 4-7 business days. Applications sent via mail can take as long as 4-8 weeks to process.
Your Indiana LLC will need an EIN not just for taxation, but also for other aspects like opening a separate bank account, credit cards, and hiring employees (to name a few).
6. Filing Biennial Reports For Your IN LLC
All LLCs in Indiana must file a Business Entity Report every 2 years. You can file the report online or by mail. This is a biennial report and the due date is before the last day of your LLC’s anniversary month. The anniversary day/month is decided by the date of approval of the Articles of Organization for your LLC.
As an example, if your LLC was approved on March 13, 2019, the report will be due before March 31, 2021. The next report will be due in 2023, and so on, until the LLC stays in operation or if the state amends the rules. You can file the report up to a month in advance of the due date.
Failure to file the report will cause the LLC to lose its good standing with the state. If you fail to file the report, the state may choose to administratively dissolve your LLC.
Filing online requires the use of the INBiz system and a filing fee of $31. This method is quick and cheap, and approval often takes as little as one hour.
To file by mail, you’ll need Form 48725. This is available on the SOS website under the “Business Entity Reports” section. The filing fee is $50. You can pay it via check or money order payable to the “Secretary of State”. The mailing address is:
Secretary of State
302 W Washington Street
Indianapolis, IN 46204
Processing the business entity report usually takes 2-3 business days after the receipt of the form by mail.
7. Licenses, Permits, And Taxation
Your Indiana LLC may need various licenses and permits to operate its business. These requirements are specific to the location of your business as well as its industry. Indiana requires specific licenses and permits for businesses working in some specific industries or niches. Similarly, your local city/county too may have requirements for licenses and permits.
As for taxation, it’s usually a good idea to consider local, state, and federal requirements.
Local taxes are those imposed by the city/county where your LLC is based.
State taxes are imposed by Indiana. This can include things like sales tax, employee tax (withholding tax), food and beverage tax, and more.
On the federal level, LLCs get pass through taxation by default. This means that the income from your Indiana LLC can be included as part of your personal income tax returns. However, you may also choose to have your LLC taxed as a C-corp or S-corp. In such instances, the tax requirements will change.
Dealing with licenses, permits, and taxation can be tough and often requires extensive knowledge. While doing it yourself is certainly an option, it’s often worthwhile to consider hiring a professional to handle these things for your LLC.