Starting a business in Ohio offers numerous perks, from simple and manageable state regulations to low corporate and business taxes and widespread community support for local entrepreneurs. Whether you are creating a new business or are an established sole proprietor, forming a limited liability corporation (LLC) in Ohio can be an excellent way to limit personal liability for business-related debts and legal proceedings. Not only does an LLC reduce your personal liability in the event of business debt or lawsuits, but it also allows members to officially organize the ownership, management structure, and taxation of the business within a flexible framework.
Unlike sole proprietorships and partnerships, limited liability corporations are specifically designed to prevent the members from paying for mistakes or malpractice on the part of the business organization. While in a partnership or sole proprietorship, the owners could find themselves paying for damages out-of-pocket, even to the point of losing assets and property, an LLC draws a line between the organization's assets and those of the members. While there are various business structures available to the up-and-coming business owner, the LLC is the most common due to the high level of protection it offers members.
LLCs are permitted in every state throughout the US. However, every state has different requirements for registration, documentation, reporting, and taxation. Therefore, it is crucial to ensure that you have a thorough understanding of Ohio's LLC requirements for establishing an LLC.
What We'll Cover
- Starting an LLC in OH: What's Involved?
- Step 1: Forming Your LLC in Ohio
- Naming Your Ohio LLC
- Obtaining Ohio Registered Agent
- Articles of Organization
- IRS Employer Identification Number
- Timeline and Fees
- Cheapest Ohio LLC Registration Service Providers
- IncFile - "Most Affordable"
- Northwest Registered Agent - "Best Customer Service"
- ZenBusiness - "Most Inclusive"
- Step 2: Obtain an Ohio LLC Operating Agreement
- Ongoing Legal Requirements for an Ohio LLC
Starting an LLC in OH: What's Involved?
Before you begin the application process to register your LLC in Ohio, take the time to consider the purpose of your business and the way you intend to structure your organization. Your registration will require clarification of various business parameters, including:
- Number of people, or members, in the LLC
- Number of governing members of the LLC
- Intended purpose of the LLC
- Name of the LLC, consistent with Ohio SOS requirements
Not only does this information allow you to apply for your LLC in Ohio, but it also helps put your business plan in perspective so you can better frame your goals and intentions. More specifically, it allows you to consider whether an LLC is the right type of business for your organization. Although an LLC offers many benefits, it is not necessarily the best structure for every type of business. Do your due diligence and make sure you understand the parameters of an LLC before submitting an application. If you aren't sure whether an LLC is the best structure for your organization, it may be wise to consult with a registration service provider or attorney who has experience working with LLCs and other business entities in Ohio.
Step 1: Forming Your LLC in Ohio
Creating an LLC in Ohio can be an extremely complex process. From confirming that your LLC's name is consistent with Ohio filing requirements to finding a registered agent and filing Articles of Incorporation, every step must be completed thoroughly and accurately. To avoid complications and ensure that your application is accepted the first time, you will need to fulfill the following requirements:
Naming Your Ohio LLC
Choosing the name for an Ohio LLC is more than selecting a name that fits the business; it must meet specific parameters in order to be eligible for registration. All LLCs in Ohio must be registered with the words "Limited Liability Company", "Limited", or an abbreviation thereof, such as LLC, L.L.C, or Ltd. The name cannot be a duplicate of an already registered or reserved name, so be sure to search business names on the Ohio Secretary of State (SOS) website to ensure that your name is original.
If you are not yet ready to register your LLC, you can reserve your business name with the Ohio SOS by submitting a Name Reservation Form (534B) and a filing fee. Once your request has been approved, the SOS will send a written confirmation, and your name will be reserved for 180 days from the time of filing. It is important to note that submission of the request form does not guarantee that your reservation request will be approved, so be sure to watch for the written confirmation.
Obtaining Ohio Registered Agent
When setting up an LLC in Ohio, it is necessary to have a registered agent with a permanent Ohio address. This registered agent can be an individual or corporation, and can be a member of the organization being registered. If there are no members of your LLC with permanent residence in Ohio, you can hire a registered agent in Ohio to perform this service. Registered agents are responsible for accepting legal documents on behalf of the organization and keeping members informed of any legal correspondence or documentation.
Articles of Organization
Once you have verified the name of your LLC and established a registered agent, you must file your Articles of Organization with the Ohio Secretary of State and pay the registration fee. You will be required to provide:
- Name of the Corporation
- Location of the Principal Office in Ohio
- Date of the Start of the LLC
- Authorized Number and Value of Shares
- Initial Stated Capital
- Appointment and Acceptance of Ohio Registered Agent
- Any Additional Provisions not on Form
- Signature of Registered Agent, Incorporator, and/or Legal Representative
- Filing Fee, including Expedite Fee if applicable
You can submit your Articles of Organization online at www.OhioBusinessCentral.gov, by mail to P.O. Box 1390, Columbus, OH 43216, or in person to 22 North Fourth Street, Columbus, OH 43215.
IRS Employer Identification Number
Starting an LLC in Ohio also requires setting up an Employer Identification Number with the IRS. If you are the sole member of your LLC, you do not need to obtain an EIN, but all LLCs with two or more members must procure an EIN from the IRS for tax purposes, regardless of the state in which they operate. You can easily apply for an EIN online here.
Timeline and Fees
The Ohio Secretary of State charges a filing fee that must be paid when submitting the Articles of Organization. This fee includes a processing time of three to seven days, depending on the complexity of the filing. For an additional expedite fee, the process can be expedited to as soon as four hours after submission.
Filing your LLC on your own can be the less expensive option, but completing the forms and filing them yourself can be complicated and time-consuming. While you can hire an attorney to assist you with the process, it can end up costing hundreds, if not thousands, of dollars to complete your registration. Fortunately, there are several registration service providers who can help you set up your Ohio LLC at a fraction of the cost of an attorney.
Cheapest Ohio LLC Registration Service Providers
To help you find a service provider that meets your needs and your budget, we have reviewed the top three affordable registrations companies for your Ohio LLC registration.
IncFile - "Most Affordable"
IncFile offers the lowest base rates, with a starting package at $0 plus the state filing fee. It is perfect for individuals who are looking for a simple, inexpensive LLC formation service. All of their packages include company name verification and preparation and filing of the Articles of Incorporation. In addition, they provide one year of registered agent service, next day processing, and online access to status tracking and incorporation documents. Their site offers a variety of services for entrepreneurs, including clear explanations of business structures and FAQs.
- Inexpensive starting package
- Next-day processing
- 1 free year registered agent service
- Useful online resources
- Excellent customer service reviews
- Add-ons and upsells can make the service more expensive
For a new business that is looking for basic Ohio LLC registration, IncFile is definitely the most affordable option.
Northwest Registered Agent - "Best Customer Service"
Northwest Registered Agent has been a mainstay of LLC registration services since 1998. They corner the market in customer service by providing full LLC formation services complete with lifetime service, one year of registered agent services, and a comprehensive library of forms and resources. Their services are more expensive than the other two service providers on our list, but they do not attempt to upsell any additional services.
- Streamlined full-service contract with no add-ons
- Superior lifetime customer support
- Excellent online forms and resources
- Much higher price than competitors
If you are willing to pay a greater amount up front, you will receive world-class customer service and a lifetime of superior customer support from Northwest Registered Agent.
ZenBusiness - "Most Inclusive"
As the middle-ground option, ZenBusiness provides excellent service at an affordable price that, while higher than IncFile, is far below Northwest Registered Agent. For a modest fee, they provide a starting package with all the basics you need to get your Ohio LLC up and running. Their package includes full LLC formation, along with 1 year registered agent service, online document access, and an operating agreement template. They also provide a free accounting consultation and comprehensive virtual business guide to help ensure that you're on the right track. A highly inclusive business, ZenBusiness works closely with Kiva.org to assist minorities and women with establishing viable businesses.
- Affordable price for the widest range of services
- Easy online access and resources
- Socially aware partnerships
- More expensive than IncFile
- Turnaround times can be fluid
With an inclusive standard plan at excellent value, ZenBusiness offers the most for your money.
Step 2: Obtain an Ohio LLC Operating Agreement
Although Ohio does not require that LLC registrants complete an operating agreement, it is strongly recommended that an operating agreement be created for LLCs with more than one member. The operating agreement of an LLC provides an outline for the power, responsibilities, and obligations of each member. It is used to create ground rules for the organization, and can help to protect your company from liability, as well as reducing the potential for operational misunderstandings. In Ohio, the operating agreement is considered a governing document, along with the Articles of Organization and any bylaws written for the LLC.
Creating an Ohio LLC operating agreement can seem daunting, but there are a variety of resources available to assist you. You can find a sample of an operating agreement here (insert link to sample OH LLC operating agreement) for your reference, if you are submitting your own LLC documentation. If you are using one of the above services, you have nothing to worry about! Each registration service company provides everything you need to register an LLC, including an operating agreement.
Ongoing Legal Requirements for an Ohio LLC
Once you have registered and established your Ohio LLC, your responsibilities to the state don't stop there. It is important to understand the ongoing legal requirements that come with owning an LLC, such as state and federal taxes, periodic reports, and trademark renewals. In Ohio, LLCs are not required to file annual reports, but they are liable for federal and state taxes. If your business has registered a trade name, fictitious name, or trademark, they will need to renew their registration annually.
Finally, should you choose to dissolve your LLC at any point, you must file a Certificate of Dissolution with the Ohio Secretary of State and pay the appropriate fee. You must also inform the appropriate state and federal tax authorities of the dissolution. Failure to do so may result in your being charged for business taxes on your dissolved business.
Although the process of starting an LLC in Ohio can be daunting, there are a variety of resources available to assist you with name selection, filing, and documentation. Whether you are just starting out or you're a seasoned entrepreneur, Ohio LLC registration service providers offer an affordable option for completing and filing your articles of organization, establishing an operating agreement, and keeping you on task when it comes to taxes and reporting deadlines.
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