Our quick guide on how to start an LLC in Ohio will take you through the necessary steps in setting up your business. A limited liability company has several uses. You can use your Ohio LLC to run a business or to hold assets like real estate, vehicles, and more.
Generally, an LLC is designed to provide legal protection to your personal assets by separating them from the business (LLC’s) assets.
Starting an LLC in Ohio is fairly easy and the state offers several convenient options to do so. At the basic level, the cost to create an LLC in Ohio is $99. However, other costs may be involved depending on how you set up your LLC and what options you need. Let’s take a look at the steps involved.
1. Choose A Name For Your Ohio LLC
The first step to go through is choosing a name for your Ohio LLC. This is the official and legal name of your company, so give it some thought. The name of your business is relevant not just legally, but also for marketing and advertising. A good and attractive name can make a world of a difference.
An LLC’s name should be unique and distinguishable. This means it shouldn’t be the same as, or very similar to, existing companies/entities in the state.
To check the availability of a name, use the Business Name Search function at the Secretary of State website. This will give you a good idea of existing business names, and whether your preferred name is available or not.
You could be lucky enough to have your top choice in names readily available. But it’s usually a good idea to think of 2-3 names that you can use. While you’re selecting a name, it’s a good idea to search the USPTO website to avoid possible trademark violations.
Allowed LLC Designators
Any Ohio LLC must end its name with a proper designator. The designator is usually “limited liability company” or its accepted variations. These include:
- LLC
- L.L.C.
- Ltd
- Ltd.
- Limited
- Limited Liability Company
Reserving A Name For Your Ohio LLC (Optional)
Reserving a name is a way to reserve a name for your LLC, without actually forming the company. You may have your reasons to do so, including completing business arrangements for your company. In any case, reserving a name can come in handy if you intend to start a business soon. Reserving a name requires filing Form 534B with the Secretary of State.
Ohio allows you to list three names in the form, in the order of desirability. This means if the first (preferred) name isn’t available, the state will reserve the next name (depending on availability). Note, that only one name will be reserved.
Once the form is approved, the chosen name is reserved for 180 days. It’s possible to file the form online or via mail. The filing fee is $39.
Doing Business Under A Fictitious Name (Optional)
This part is only relevant after your LLC is formed. Simply put, using a fictitious name provides an opportunity for your company to conduct business under an assumed name. It’s also called trade name, assumed name, fictitious name, or DBA (doing business as).
To use a fictitious name, you’ll have to register the name with the Ohio Secretary of State. This requires filing Form 534A. The filing fee is $39, and it’s possible to submit this online or through the mail.
2. Appoint An Ohio Statutory Agent
The Statutory Agent for your Ohio LLC is practically the same as the Registered Agent that many other states need. A statutory agent is needed for the ‘service of process’. That means the agent will receive legal documents and other information relevant to your Ohio LLC. This includes lawsuits, communication, summons, subpoenas, and more.
A person or entity can function as a statutory agent, but an LLC can’t be its own agent. For a company/entity to be a statutory agent, it must be registered to do business in Ohio. Similarly, only a person who is a legal resident of the state can register as a statutory agent.
The address of this agent must be located in Ohio. Interestingly, Ohio accepts PO Box addresses for registered agents. Most states require a street address. It’s possible to hire a commercial statutory agent, if necessary.
It is mandatory to maintain a statutory agent in the state. Failure to comply may lead to the state administratively dissolving the offending LLC.
3. Articles Of Organization For Your Ohio LLC
Filing the Articles of Organization is key to setting up your LLC in Ohio. Your LLC comes into existence with the state approving the Articles of Organization.
Ohio LLC cost or the filing fee for the Articles of Organization is $99.
This requires filing Form 533A with the Secretary of State. You can file the form online or via mail. If you choose to file via mail, the payment should be made via money order or check payable to “Ohio Secretary of State”. The mailing address for this form is:
Ohio Secretary of State,
Regular Filing,
PO Box 670,
Columbus, OH 43216
Filing online is usually faster and more convenient to pay for. The acceptable payment methods for online filing include various credit/debit cards.
Information needed on the Articles of Organization includes
- Name of the LLC
- Name and address of Statutory Agent
- Acceptance of appointment by Statutory Agent
- Name and signature of member, manager, or representative of the LLC
Depending on your requirements, you can include additional (optional) information like the purpose of the LLC, effective date, and period of existence.
How Long Does It Take For Ohio LLC Approval?
The time taken to register an LLC in Ohio depends on the submission method. Ohio offers expedite services if you need to get the approval faster.
- Online submissions are usually approved within 1-2 business days.
- Mail submissions can take 3-7 days for approval (after the form is received).
- Expedite service 1 reduces the approval time to two business days after reception of the form and requires an additional fee of $100.
- Expedite service 2 is only available to walk-in submission of the form. It offers approval within one business day and costs an additional $200.
- Expedite service 3 is available to walk-ins submitting the form before 1 pm. This one costs $300 and the approval is available within 4 hours.
Note that all expedite services costs don’t include the $99 filing fee for Articles of Organization.
Once your LLC is approved, you’ll receive an invoice, a stamped and approved copy of the Articles of Organization, and a Certificate of Organization with the state seal.
4. Prepare An Operating Agreement
An Operating Agreement is an internal document for your LLC. It doesn’t have to be filed with any government agency. This isn’t a mandatory requirement, but it is highly advisable for all LLCs to have an agreement in place. Even single-member LLCs should get an operating agreement.
Simply put, this is a document that defines various aspects of functioning of your company. This includes aspects like the distribution of profits/losses between LLC members, approach to taxation, hiring, regulations, ownership of the business, and other relevant information.
An operating agreement shows that the business is being run properly and has a good foundation. A detailed agreement works as a roadmap for the functioning of the business. If necessary, it may also provide a way for conflict-resolution between members.
5. Getting A Federal Tax ID (EIN)
A federal tax ID isn’t always necessary, but it is a good practice. It comes in handy for the proper functioning of the business and may help with the separation of assets.
The Federal Tax ID is also known as EIN (Employer Identification Number) and FEIN (Federal Employer Identification Number).
Getting this ID is simple and free. All you have to do is register online at the IRS website. In case it isn’t possible to file an online application, you can download and submit Form SS-4 with the IRS. This form can be submitted via mail or fax.
A federal tax ID is required for banking and issuance of credit/debit cards for your LLC. Using proper banking channels and credit cards may help build credit for your business. Besides, you’ll need the EIN for hiring employees.
Remember, apply for the federal tax ID only after your LLC has been approved by the state.
6. Annual Reports
Unlike most states, Ohio doesn’t require filing of annual reports or similar forms. One less thing to worry about!
7. Permits, Licenses, Taxation For Your Ohio LLC
Once your Ohio LLC is approved, you may need to seek additional licenses and permits. These depend on your company’s specific industry, location, and other factors. It’s best to consult with local and state authorities to know what specific licenses and/or permits you’ll need (if any).
All LLCs in the state must register with the Ohio Department of Taxation. For most tax purposes, you can use the Ohio Business website for online management of taxes, etc. It’s important to stay compliant if your business has to pay state taxes.
As for federal taxes, LLCs usually get “pass through” taxation. That means you can claim the profits/losses when filing your personal returns with the IRS. However, you may choose to have your LLC taxed as a corporation.
There are different ways to approach taxation and your Ohio LLC must stay compliant. It’s important to take steps to stay informed or to hire a professional in case you need help managing taxes.