Ohio is one of the many US states that allow business owners and small business owners to register a limited liability company (LLC).
If you are looking for a way to take your business to the next level, this may be a good option for you.
However, before registering, it is important that you understand what exactly an Ohio LLC entails and how much work has to go into setting up one.
We will discuss everything from start to finish so that your registration process can go smoothly.
Find a Name for Your Ohio LLC
One of the first steps in setting up your Ohio LLC is figuring out what to call it. You will need a name that is available, meets state requirements and doesn't infringe on any trademarks or copyright laws.
The best way to find an appropriate LLC name for your new business is to brainstorm keywords about your brand and then pick one that makes sense for your company.
Once you have your LLC name, you will need to ensure that it meets the state requirements. You can find these on the Secretary of State website, and they are as follows:
- Must end in "LLC," or one word which ends with 'L,' 'LC,' or 'LCC'
- Cannot contain misleading words, such as "corporation," "incorporated," or any other words which give the impression that it is a corporation
- Must contain at least one letter, number, symbol (-), punctuation mark (.), and cannot be blank
- Must not contain words like "bank" or "trust"
- Cannot be the same as another name reserved by an existing Ohio LLC or a similar sounding company registered with the state.
You can also reserve your company name by filing a reservation form with the Ohio Secretary of State. You can file it online at a $39 filing fee.
Appoint an Ohio Statutory Agent
After you have your name, the next step in registering for an Ohio LLC is appointing a statutory agent.
An LLC statutory agent is equivalent to a registered agent in other US states. A registered agent service is a company or a person who accepts legal documents on behalf of the LLC.
The State of Ohio has specific requirements and guidelines you need to follow when selecting one:
- Must be a person who is at least 18 years old with permanent residence or citizenship in the US
- Must not be a member of another Ohio LLC
- Cannot have been convicted of crimes involving moral turpitude or dishonesty, fraud, theft, embezzlement, forgery, and other related offenses.
When selecting your statutory agent, you should consider several things, such as whether they will act in person or by proxy.
Also, the statutory agent must be a resident of Ohio or has permanent US citizenship with at least one year residence in OH and cannot have resided outside of the state for more than six months continuously.
Some additional requirements are that the person appointed as your statutory agent should not act on behalf of any other company, which would create conflicts of interest.
File LLC Articles of Organization
LLC articles of organization is an important document that needs to be filed for the state of Ohio to recognize your limited liability company.
The document is created by an attorney or a professional who specializes in these types of documents and will include information about how you want the company run, members involved, names and titles, etc.
Filing Ohio LLC articles with the Secretary of State office can be done online or by mail at a $99 filing fee.
Here are some of the information that should go into your articles of organization:
- How you want to run your LLC (e.g., how many members will have an equal say in company decisions or if one person has a controlling interest)
- How much equity each member contributes, whether it is an equal share or some equity, is contributed by one member to the other
- How do you want shares distributed (e.g., if there are multiple members, how do they divide up membership interest)
- How decisions will be made and what happens in case of a disagreement between members.
Make an LLC Operating Agreement
An Ohio LLC operating agreement is a contract that sets out the basic terms and conditions of ownership in your LLC in Ohio.
It can also help you avoid disputes among LLC owners, keep things simple if one member leaves the company, dies, etc.
The document should include:
- How to run meetings (e.g., does majority vote rule or consensus)
- How to manage finances and decide on investment decisions. For example, should members be allowed to withdraw funds, or can the LLC make loans to them? Members may also want a say in how equity is distributed among shareholders
- How decisions will be made (e.g., majority vote rule or consensus)
- How to hire employees.
All members of the LLC should sign operating agreements for it to take effect.
Please note that an LLC operating agreement is an internal document that is not required by Ohio law, but it is a very good idea to have one, especially if the company has multiple members.
Obtain an EIN
An employer identification number (EIN) is a tax number assigned to a business entity.
It's an important thing to have for your company because it acts as proof of identification and gives the Ohio Secretary of State permission to use its Social Security Number (SSN).
You will need this information if you plan on filing any taxes in Ohio or want to open a business bank account.
To get an EIN, you must fill out the SS-4 form and submit it with your name, business address where services are performed or will be performed, location of the main office or home office if different from above, type of entity such as LLC partnership corporation, S corporation or C corporation, sole proprietorship, etc.
You can file your form by mail or fax it to the Internal Revenue Service (IRS) for free.
To get your EIN, you will need an SSN, a mailing address, and the name of your business.
Be sure to include your company's legal name on the form in order for it to be recognized by the IRS, as well as your EIN number if you have one.
You can apply online through the IRS website or apply by mail.
Obtain Business Licenses
If you want to provide professional or personal services in Ohio, you must obtain a business license and register your professional limited liability company.
Many types of licenses depend on the type of service being offered, such as:
- A contractor's license for contractors and subcontractors who work with building trades like plumbers, electricians, carpenters, etc.
- An individual practitioner's certificate is required if you are a doctor or other health care professional and want to offer your services in the state of Ohio.
Licensing requirements vary from county to county, so be sure you research and understand the type of license your Ohio LLC needs before applying for it.
If you operate as an LLC that is ordering taxable items, you have to remember to apply for a sales tax license with the Ohio Department of Taxes online.
Ohio LLCs with gross receipts exceeding $150,000 are required to pay a commercial activity tax. Those in receipt of less than $150,000 are exempt from the tax requirement.
How Do I Start a Single-Member LLC in Ohio?
You can start a single-member LLC by filing the articles of organization with the Ohio Secretary of State.
To complete the article requirements, you will need to provide the official name of your new LLC, the statutory agent's information, and a few more basic details.
Even though a single-member LLC does not need to file an operating agreement with the state, we highly recommend it.
The LLC operating agreement is usually between the single member (business owner) and the business itself.
The agreement typically covers your rights, duties, and obligations as well as management structure.
What Are the Benefits of an LLC in Ohio?
The benefits of an LLC in Ohio include limited personal liability for business debts and lawsuits.
Additionally, LLCs in Ohio have fewer reporting and recordkeeping requirements than corporations, and most importantly, they don't have to pay an annual report or fee in Ohio.
How Do I Add an Owner to My LLC in Ohio?
To add a new owner to your LLC in Ohio, you will need to create a whole new operating agreement.
This voids the existing document that is currently on file with the Ohio Secretary of State and everyone associated with it.
You also need to file the "Domestic Limited Liability Company Certificate of Amendment or Restatement" as the Ohio Secretary of State requires.
The filing fee is $50 in accordance with current guidelines and should be filed 30 days after officially becoming a member of an LLC.
Obtain the required governmental notification. For example, Ohio law requires a limited liability company to notify the Ohio Department of Health when it is a healthcare facility or hospice care program.
How Do I Get a Tax ID Number in Ohio?
If your business is a sole proprietorship, you will use the same tax ID number that was used for your SSN when filing state taxes.
The tax identification number is the same as EIN, which stands for Employer Identification Number.
If your business is a corporation, you will use the same tax ID number that was used when filing federal and state taxes.
Also, you have to obtain an EIN from the IRS, which can be done by filling the form online or in person at any local office of the Internal Revenue Service.
The one exception is if you want to do business as a Limited Liability Company or LLC and not have taxes filed under an EIN; in that case, the tax ID number would be your company's Social Security Number.
How Long Does It Take for LLC Approval in Ohio?
Processing for an Ohio LLC typically takes around seven days but can be faster if you pay to expedite the process.
The expedited fee will cost an additional $100 and will deliver your LLC in 2 business days, or you can spend $200 more to get it approved in 1 day.
What Does LLC Non-ohio Mean?
LLC Non-Ohio means that the LLC is registered outside the state of Ohio. In other words, a non-Ohio LLC is the same as a foreign LLC.
Does a Foreign LLC Have to Register in Ohio?
Foreign LLC registration is required in Ohio.
Registering for an Ohio LLC is fast and simple. To do it, you can submit your application either online or by postal mail; the filing fee is $99.
To apply for a certificate of good standing in Ohio, you must provide a copy of the most recent certificate of legal existence or good standing from your home state.
Check the Ohio business name database for the LLC's business name before filing to make sure it is not in use.
This will ensure that you won't have any problems filing due to a business name conflict with an existing business.
Can a Minor Own an LLC in Ohio?
Yes, a minor can own an LLC in Ohio.
Ohio's Limited Liability Company is available to anyone who wants the liability protection that comes with being classified as a member or manager by law and doesn't want to go through all the paperwork and requirements of owning stock in a corporation. This includes both minors and adults.
How Often Do I Have to Renew My LLC in Ohio?
You don't have to renew your Ohio LLC once you have it registered. Unlike most states, you don't have to file annual reports after your LLC formation.
Is Ohio a Good State for LLCs?
Ohio is a great state for LLCs because it offers limited liability that other states don't.
Ohio also has fewer reporting, and recordkeeping requirements than corporations, plus their fees are much lower. You can also avoid double taxation and reap numerous tax benefits.
Ohio is a great state to register your LLC in because it has more benefits than other states, and you will be able to reap the many tax benefits that come with this.
Plus, Ohio doesn't have any annual reports or fees for an LLC which makes it much easier to go through the process of registering as one. These are great reasons to set up your LLC in Ohio.