Whether you are a young entrepreneur or a seasoned professional, Ohio’s thriving economy makes it a popular place to start your business. One of the easiest ways to take advantage of its accessible business environment is to create an LLC. In the Buckeye State, an LLC provides minimal compliance, fewer membership requirements and an attractive tax structure. Follow these 3 steps to form your Ohio LLC, today.
Choosing a name for your LLC is the first step toward officially launching your business. You must be certain that this name is notably different from any other business in the state of Ohio. You can check the availability of your business name through the Secretary of State’s business filing portal. You will want to secure this business name before you proceed with any proprietary purchases, such as a domain name or business cards. The state of Ohio does not allow you to reserve a business name without a fee.
Here are some additional restrictions and requirements for naming your new Ohio LLC:
What you can’t do: You may not form an Ohio LLC under a name that incorrectly implies that you are, or are affiliated, with a government agency (e.g. FBI, IRS).
What you must do: Your new Ohio LLC’s name must conclude with one of the following: Limited Liability Company; LLC; L.L.C.; Limited; Ltd. or Ltd. Additional steps may be required for businesses including banks, trusts, insurance agencies, dentists, cooperatives and legal professional associations, which can be found on the Secretary of State’s business name guide.
The next step toward forming an Ohio LLC is to create and file your articles of organization with the Ohio Secretary of State’s office. Incfile can complete and file your articles of organization on behalf of your LLC. The articles of organization must include:
Ohio LLCs are required to have a registered agent that resides within the state of Ohio who can receive both administrative and legal forms from the state on behalf of the LLC. If your registered agent is a business entity and not a natural resident of the state of Ohio, they must have a business address in the state of Ohio in order to receive important documents during normal business hours
If you are looking for an entity to fulfill your registered agent duties, Incfile can provide these services to your Ohio LLC.
Your LLC will not be considered a legal business until you deliver the original articles of organization, along with a certified copy, to the Business Services Division of the Ohio Secretary of State’s office, as well as the filing fee. Once this process is completed and the state has entered your LLC into its records, your Ohio LLC is fully formed and operational.
There is a $99 filing fee for creating an Ohio LLC. You may expedite the filing process for an extra fee, if you wish to receive faster service.
Following articles of organization, the next critical step is creating an operating agreement for your business. This agreement does not have to be set in stone and can be amended or repealed to reflect changes within the organization, as stated in the agreement or applicable law. While the operating agreement is not required by the state of Ohio, it is critical to spell out the operational structure of your Ohio LLC, and how it will be run. An operating agreement covers:
The operating agreement must be confirmed in writing by all members of the LLC, if there is more that one member at the time of formation.
Ohio LLCs are required to have one or more members, none of which can be business entities. Members are decided upon before the formation of the LLC based on the contributions of the individual(s).
These contributions can come in the form of a cash investment, equipment, proprietary information, etc. It is important to document these contributions in the articles of organization or operating agreement to have them on file for future considerations.
The operating agreement should also note the terms for membership resignation, retirement and in cases of dissolution or acquisition. This will help protect the LLC from losing a valuable member without warning, yet gives members the option of pursuing other professional endeavors as long as they follow the proper steps.
Ohio LLCs are required to perform additional tasks on a recurring basis to stay concurrent with the state. Ohio, unlike other states, does not require an annual report, which saves LLCs time and money. However, there are other steps to keep your business fully operational:
If you start your Ohio LLC with Incfile, we will send you reminder emails related to upcoming deadlines.
Expanding upon this ongoing responsibility for LLCs, filing taxes is an important part of business ownership. Luckily forming an LLC in Ohio provides a favorable tax environment for business owners when compared to corporations. Not only do LLC owners have the ability to take advantage of more tax deductions, but it may also operate as a “pass-through entity,” so that an LLC owner can choose to file the business’ gains and losses on his or her personal return, without having to file separately.
LLCs with multiple members will be categorized as partnerships, unless the members decide to be taxed as a corporation. Again, this means that the LLC does not have to file separate taxes, but rather that the members each pay taxes on the percentage of the profits in which they are owed on their personal returns.
The tax rates for Ohio LLCs varies depending on the business’s taxable net income.
An Ohio LLC is considered dissolved by the state when any of these events occur:
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