Limited liability companies (LLCs) are the easiest and least expensive businesses to start. They also offer owners limited personal liability protection so that a corporation does not. Limited liability companies were introduced in the mid-1990s in Ohio, and they have become increasingly popular since then.
The Ohio Limited Liability Company (LLC) is a popular business entity choice because it provides limited liability protection for its owners. Several different factors determine the cost of starting an LLC in Ohio.
The Ohio secretary of state's website notes that the fee for filing Articles of Organization is $99. There may also be additional costs associated with having an attorney help file the paperwork or getting a registered agent.
Bare Minimum Cost to Start an LLC in Ohio
The bare minimum cost to start an LLC in Ohio is $99. This fee covers the costs of filing your Articles of Organization with the Ohio secretary of state.
You'll also need to pay a $50 annual fee to maintain your LLC.
In addition to the filing and annual fees, you'll also need to pay a $500 Ohio franchise tax. This tax is paid annually, and it covers the costs of registering your LLC with the state of Ohio.
There are other LLC costs and paperwork you may need to file depending on the type of LLC you establish. For example, if you're forming a professional LLC, you'll need to file additional paperwork with the Ohio secretary of state.
Ohio Commercial Activity Tax
Businesses must pay federal and state taxes, and having a business bank account is an excellent way to keep track of these payments. The Ohio Commercial Activity Tax is a gross receipts tax levied on the privilege of doing business in Ohio.
It is enforced by the Ohio Department of Taxation and administered by county auditors. The rate for this tax varies depending on the county and type of industry, and it includes various kinds of exemptions and deductions.
Businesses are often exempt from paying corporate income taxes, but they are still liable for the Commercial Activity Tax share. It's important to note that this tax is imposed on the privilege of doing business in Ohio, not on the profits generated by that business.
The Ohio Commercial Activity Tax is a complex tax that can be difficult to understand. It's important to consult with an accountant to determine commercial activity tax liability.
Ohio Statutory Agent Service Fee
The Ohio Statutory Agent Fee is a fee charged by the state of Ohio to cover the costs of registering your LLC with the state. This fee is paid annually, and it is currently $500.
In addition to the Statutory Agent Fee, you will also need to pay a $50 annual fee to maintain your LLC. You will also need to file an annual report with the Ohio secretary of state, and this report is due by the anniversary of your LLC's formation.
There are other costs and paperwork you may need to file depending on the type of LLC you establish. For example, if you're forming a professional LLC, you'll need to file additional paperwork with the Ohio secretary of state.
Attorney fees
The answer to this question depends on a few factors.
The first factor is how much your LLC is "worth." If your LLC is worth $500,000 or more, an attorney may be required to draft the articles of the organization. The second factor is filing for a domestic or foreign LLC.
A domestic LLC must file with the Ohio Secretary of State while a foreign LLC files with the Ohio Secretary of State and the state in which it is doing business.
The third factor is how complex your LLC's articles of organization are. If they are more complex, an attorney is likely required.
The bottom line is that if you have any questions or concerns about whether you need an attorney to form your LLC, it is best to consult one to ensure that you are doing everything correctly and completely.
How do I start an LLC in Ohio?
To start a Limited Liability Company (LLC) in Ohio, you will need to file articles of organization with the Ohio secretary of state. You can find more information on the Ohio secretary of state's website.
In addition, you will need to create an Ohio LLC operating agreement. This document will outline the rules and procedures for running your Limited Liability Company. It will also outline the distribution of profits and losses for your Limited Liability Company.
A Limited Liability Company is a company that provides its members protection from being held personally liable for company debts or claims against the LLC.
State laws govern limited liability companies, so you must file with the Ohio secretary to form a Limited Liability Company in Ohio.
There are several steps involved in forming a Limited Liability Company, including filing organization articles with the Ohio secretary of state, creating a Limited Liability Company operating agreement, and obtaining any licenses or permits your business may require.
Alternatively, you can use an Ohio LLC formation service to speed up the process.
Does Ohio Require a Registered Agent?
Yes, Ohio requires all LLCs to have a registered agent. A registered agent is an individual or company that accepts legal notices and other communications on behalf of the LLC.
The registered agent must be located in Ohio and have a physical address in the state.
Ohio Registered agent services can help businesses stay compliant with state requirements and forward important legal documents to the business owner.
When choosing a registered agent service, it is important to consider the fee that the service charges, as the fee may vary from service to service.
Steps to Form an Ohio LLC
The steps to form an Ohio LLC are straightforward; here is a quick guide.
- Choose a business name. The name of your LLC must be unique and cannot include certain restricted words.
- File articles of organization with the Ohio Secretary of State. This document contains basic information about your LLC, such as its name and purpose.
- Create an operating agreement. This document outlines the rules and regulations that govern your LLC. It is not filed with the Secretary of State, but it does have to be created before you file your first tax return or receive an initial business license from a city/county/state agency.
- Determine whether a limited liability company (LLC) or a corporation is better for your type of business.
- Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is mandatory if your LLC employs people, even part-time employees.
- Register to do business in Ohio and obtain a state Business License or Certificate of Authority if required by law where you will be doing business.
- Comply with relevant Ohio Department of Taxation rules and regulations. This may include paying state income taxes, filing an annual report, and/or registering for a sales tax permit.
- Adhere to any city or county licensing requirements where your LLC is doing business. For example, you may need to apply for a zoning variance in some cities.
- Obtain any required federal, state, and local licenses necessary to operate your business. For example, many real estate businesses need a license from the Ohio Department of Development or the Ohio Bureau of Workers' Compensation.
- Apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is mandatory if your LLC employs people, even part-time employees.
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FAQs
Does an LLC expire in Ohio?
An LLC does not expire in Ohio, but it must file an annual report with the Ohio Taxation. This report is due by April 15th of each year and must include information about the LLC's members, income, and expenses.
Can an Ohio LLC Be Sued?
An Ohio LLC can be sued, but its owners are protected from personal liability for the debts and obligations of the LLC. This protection is known as limited liability.
Does an Ohio LLC Have to Pay Taxes?
All LLCs are "pass-through" entities, which means the LLC itself does not pay taxes. Instead, all profits or losses are passed along to its members.
How Long Does It Take To Get an LLC in Ohio?
The process of establishing an LLC in Ohio usually takes 2-3 days, but it still depends on the volume of filings at the time. Note that this is only an estimate; the turnaround time may be longer or shorter depending on various factors.
