How Much Does an LLC Cost in Ohio? (Fees Revealed)
Starting an LLC in Ohio entails legal requirements, an established procedure, and corresponding expenses. The company has to shoulder initial mandatory costs, as well as, secondary expenses based on the needs and preferences of the LLC.
As a Mergers and Acquisitions specialist, I helped businesses and individuals form LLCs and joint organizations. After consulting business experts in the state, we'll share our insights on the expenses of forming an LLC in Ohio.
Quick Summary
- The cost to start an LLC in Ohio includes a minimum filing fee of $99 for filing the Articles of Organization and a $25 filing fee for annual reports.
- Additional expenses may include a registered agent service, licenses and permits, taxes, name reservation fees, and other necessary documents.
- There are over 258,000 active LLCs in Ohio, and around 40,000 new companies are formed annually, according to the Ohio Secretary of State's office.
- Through my experience, I learned that Ohio has a large growing economy, which makes it an ideal state to form a limited liability company.
Cost to Start an LLC in Ohio
There are mandatory and optional fees that have to be met when starting an LLC in Ohio.
1. LLC Formation Filing Fee ($99 - Mandatory)
To officially form an LLC in Ohio, you must file LLC Articles of Organization with the Secretary of State.
This document includes essential information about the LLC, including its name, address, registered agent, and members. The filing fee for the Articles of Organization in Ohio is $99, as stated in the Ohio Secretary of State's Form 610 [1].
For clients who want to start their businesses as soon as possible, the state offers accelerated processing. According to a recent report from the Department of State, nearly 40% of new business filings opted for this expedited service, underscoring its appeal to entrepreneurs looking to quickly enter the market.
I found the expedited service cost-effective and efficient since my application was approved within 1 business day for a $200 accelerated service fee.
"Registering your LLC in Ohio costs only $99, and without the requirement to file an annual report, starting a business in the Buckeye State is quite cost-effective."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
2. Registered Agent Service Fee ($80-$300 – Optional)
The Ohio Statutory Agent or registered agent fee is a fee charged by Ohio to cover the costs of registering your LLC with the state. This fee is paid annually, currently between $80 to $300, if you intend to employ the services of one.
The additional filling fee costs $25 [2].
3. Name Reservation Fee ($39 - Optional)
Before forming an Ohio LLC, I always remind clients to ensure that the desired business name is available and comply with state guidelines.
The Ohio Secretary of State's office charges a fee for checking the availability of a name and reserving it for 180 days. You’ll have to pay a $39 name reservation filing fee [3].
Expenses Following the Approval of Your LLC
Once the business is fully operational, other requirements and documentation may add to the overall cost.
1. Business License ($25 - $350 - Depending on the Nature of the Business)
The fees for Ohio business licenses and permits can vary widely depending on the type of business, location, and regulatory requirements involved. Typically, it starts from $25 to $350.
A colleague of mine was required to obtain a professional license and business permits to operate a law firm in the state.
It is advisable to research the specific licenses and permits relevant to your industry and consult with the appropriate state and local agencies to determine the associated costs.
2. Annual Report Fee ($0)
After forming an LLC in Ohio, you must file an annual report with the Secretary of State's office. Luckily, the annual report fee in Ohio is $0.
This report updates the state on the LLC's current information, such as its address, members, and Ohio registered agent. Failure to file the report on time may result in additional penalties.
3. Tax Implications And Associated Costs (Mandatory)
LLCs operating in Ohio and engaging in the sale of goods or certain services are obligated to collect and remit the state's sales tax, which is 5.75%.
In addition to this base rate, there are varying county and transit sales taxes to consider. Ohio's local jurisdictions and transit authorities can levy an extra sales tax ranging from 0.25% to 3%.
The Ohio Commercial Activity Tax is a complex tax that can be difficult to understand. It's important to consult an accountant to determine commercial activity tax liability.
4. Operating Agreement (Optional, but Recommended)
While Ohio does not legally require LLCs to have an operating agreement, I highly recommend clients to create one since it would act as a contract between members.
The Ohio LLC cost of creating an operating agreement can vary depending on whether you hire an attorney or use an online legal service. Online services could charge around $100 to $200.
5. Filing A DBA Cost ($25 - Optional)
When I had to file a DBA (Doing Business As) for a client, I was charged $25, which covers the paperwork and processing required to establish a fictitious business name within the state.
6. EIN ($0 - Optional, but Recommended)
An Employer Identification Number is necessary for paying taxes, opening a business bank account, applying for loans, and hiring employees.
You can apply for an EIN on the Internal Revenue Service website at no additional cost.
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FAQs
How Much Does it Cost to Set Up an Ohio Foreign LLC?
It costs $99 to set up an Ohio Foreign LLC. This fee covers the Registration of a Foreign Limited Liability Company in the state.
Is There A Penalty For Paying My Taxes Late In Ohio?
There’s a penalty for paying your taxes late in Ohio. The state imposes a 3% interest on delinquent taxes.
Ohio LLC Formation Cost
The required filing fee for submitting the Articles of Organization with the Ohio Secretary of State is approximately $99.
Additionally, additional charges might be if expedited processing or other services are requested.
It's important to note that legal and professional fees, such as those for attorney consultations, foreign LLC costs, or registered agent services, are not included in the total Ohio LLC cost. It's best to consider these before you even invest in a business bank account.
To get an accurate estimate, consulting with Ohio’s best LLC formation services is recommended. Proper guidance can ensure compliance with Ohio state regulations and help facilitate a smooth LLC formation process.
References:
- https://www.ohiosos.gov/globalassets/business/forms/610_web.pdf
- https://www.ohiosos.gov/businesses/filing-forms--fee-schedule/
- https://www.ohiosos.gov/globalassets/business/forms/534b.pdf
