Having an Ohio LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Ohio.
On this page, you’ll learn about the following:
- How to Start an LLC in Ohio
- After Starting your Ohio LLC
- Ohio Foreign LLC
- Why an LLC in Ohio
- Large Scale Businesses in Ohio
- Ohio LLC Formation Review
How to Start an LLC in Ohio
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. 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
Deciding on a business name is the first step to start an LLC. In Ohio, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Ohio business naming requirements. Once you pass through them, you can successfully name your business.
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.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Ohio. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Ohio. The cost of a name reservation is $39.
Important Quick Links:
P.O. Box 670
Columbus, OH 43216
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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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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Ohio. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service 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 Ohio 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. To know more about online filing, visit the Ohio Certificate of Formation.
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. You may also file in person by visiting the office on business days.
Mail To: Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
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.
When it comes to an LLC operating agreement Ohio does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Ohio LLC later.
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 and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need 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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Ohio LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
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 bank account
- File Ohio business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Ohio LLC annual report or biennial report
- Already existing LLCs that wish to operate in Ohio must register as Ohio foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Ohio Foreign LLC
To register an Ohio foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Ohio. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Ohio Foreign LLC to know more about having a foreign LLC.
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: 5 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 be unique, easy to find, and available in the state.
- 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.
If you are a resident of Ohio, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $99 (domestic LLC) and $99 (foreign LLC), LLC costs in Ohio include filing fees for Annual Reports every year. LLCs are liable to pay sales tax of 5.75% every year.
It takes 7 business days to get an Ohio LLC if you file it online or via mail.
Every year all the LLC have to submit an Annual Report to the Ohio Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
Having an LLC is easier than other forms of business. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. On the other side, the formation of LLCs requires less paperwork and fewer legal complexities. If you have any questions, leave a comment below.