Forming an LLC (Limited Liability Company) in Ohio is easy and affordable. The following are few procedural steps on how to start an LLC in Ohio. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Ohio, visit How to Start an LLC.
On this page, you’ll learn about the following:
- How to Start an Ohio LLC
- After Starting your Ohio LLC
- Why an LLC in Ohio
- Large Scale Businesses in Ohio
- Ohio LLC Formation Review
How to Start an Ohio LLC
Suppose you’re planning to invest in some profitable business or maybe about to set up your business in Ohio. In that case, forming an LLC in Ohio is the simplest form of business for you. As LLCs reduce the owner’s personal liability for company or business debt, it is wise to have an Ohio LLC.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Ohio.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in Ohio, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Ohio business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Ohio LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Ohio Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in Ohio
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in Ohio. Choosing an Ohio-registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of Ohio with a physical street address. It could also be a business with a permanent agent address. Here are the recommended agents and employees for you:
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These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Ohio. Compare them to check the best yet cheapest option for you. Besides, these professional service providers can guarantee you filing services along with processing services to potential customers because they have been in the business for years.
Step 3: File Articles of Organization in Ohio
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Ohio Secretary of State, which costs $99. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Ohio, like if it is a member-managed or managers-managed. LLCs with employees need to check the guidelines to hire employees in the Ohio government portal.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Ohio LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.
How to File by Mail
If you prefer filing real-life forms for your Ohio LLC registration, then you can download the Ohio Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature.
Step 4: Create Your Ohio LLC Operating Agreement
A limited liability company operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting an LLC in Ohio does not require you to have a limited liability operating agreement, but it is ideal to have one that contains all your details of business operation. Hence, having a liability company agreement is recommended.
Step 5: Filing a Ohio LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your Ohio LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File Ohio business permits & licenses
- Get liability for business insurance with coverage for employees
- File an Ohio LLC annual report or biennial report
- Already existing LLCs that wish to operate in Ohio must register as a foreign Ohio LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember the upcoming filing deadline and filing fee, annual costs, or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Why an LLC in Ohio
The availability of a skilled workforce that is full of dedication and passion is one of the most significant advantages of incorporating an Ohio LLC. Apart from this, there are many other benefits like business funding options and reduction in tax liabilities one can consider when starting a business in Ohio, which are discussed in detail mentioned below.
Loan Programs in Ohio
Many loan programs are provided to the LLC in Ohio. The main reason behind offering these loans is to help the company grow and maintain a proper cash flow in the LLC so that the businessmen can focus on implementing their unique idea. Some of the assistance programs are discussed below –
- The first service is Business and Industry Guaranteed Loans, which USDA provides.
- Then there is a 166 Direct Loan, which is offered by the Development Services Agency.
- After that, there are loan schemes for a certified development company known as a 504 Loan program, and SBA handles it.
- After that, a loan is given to businesses that want to start an LLC in Ohio but rural areas. For them, there is Rural Business Development and Opportunity Grant, which USDA also controls. This loan is easy to get approved as the state is always looking forward to developing rural areas of the state.
- At last, there is a loan service provided by the Ohio Development Services Agency, which is for those LLCs who are working in a particular niche that works for the development of the community.
Ohio New Market Tax Credit
There are zones divided in the state of Ohio based on income zones. Those zones with less income are categorized as low-income community zones, and when an LLC decides to start their business in this area, they are given several tax benefits. These benefits will boost the company’s confidence to provide better services in the community and help them in their growth with personal business growth.
Ohio Enterprise Zone Program
The enterprise zones of Ohio state are decided by the municipal corporations, which are open for business establishments. When a business plans to incorporate to such a place, they start receiving these benefits as they save themselves from real estate and personal property taxes. There are two divisions in this zone, also named Full Authority zones and Limited Authority Zones, that differ in offerings and rebate percentages.
Large Scale Businesses in Ohio
Ohio is known for its favorable business climate and taxation policies. That is why many people are deciding to start an LLC in Ohio. Here’s the list of Top 4 businesses to look for.
Health care and Biosciences
There are around 1,000 biotechnology and medical research firms that are operating in Ohio that are generating employment for 100,000 people directly. Due to the investment that these firms have and their inventions, they are successful in generating a turnover of $140 billion, which is 15% of the state’s total GDP. Along with the biotech firm, 600 firms of medical device firms contribute hugely to the economy.
The USA’s best education system is available in Ohio, with around $37 billion to contribute to the GDP. Various state universities like Kent State University and Toledo State university give jobs to about 400,000 people in Ohio.
Iron and Steel
According to the statistics of the state, the iron produced here is around 14 million tons. There is a well-established electrometallurgy industry in Ohio that is giving jobs to more than 34,000 workers. The state is responsible for 15% of raw steel made every year and contributes to around $7.2 billion every year.
Motor vehicle Assembly
With the increase in the demand of the automobile sector, the manufacturers have chosen Ohio to manufacture their vehicles. The benefit here is that the tax rate is lower than in other states. The big companies that are present in the state are General Motors, Ford, and Honda.
The small businesses that are established in the state are:-
- Affiliate marketing
- Online courses
- Transcription businesses
Ohio LLC Formation Review
Time needed: 30 minutes.
Just to recap, here are the easy steps again when forming an LLC in Ohio. Click on the steps in this list to read the full detail.
- Name your Ohio LLC
The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In Ohio, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
International EIN applicants do not need an SSN to get an EIN.