How to Start an LLC in Ohio
How to start an LLC in Ohio in 6 easy steps
Step 1. Naming Your Ohio LLC
One of the first things you need to do is find a suitable name for your business. This name must be distinct from other businesses in the state and follow a few LLC naming rules.
Legally Required Designation
Ohio LLC regulations require that the name of your business contain the phrase “limited liability company,” “limited,” or one of the following abbreviations:
- LLC
- L.C.
- ltd
You can read more about specific naming guidelines and what makes a business name distinguishable here.
Unique Name
As mentioned above, the name you choose for your LLC must be unique and distinct from all other businesses in Ohio. You can ensure that your desired name is available by running a search on the Ohio Secretary of State’s business name database.
If you find a name is available, you can reserve it ahead of time. This is done by submitting a Name Reservation form online or by mailing it to the address printed on the document. There is a $39 filing fee associated with this form, and it will hold your chosen LLC name for 180 days before establishing your business. It takes between 3 and 7 business days to process, but you may choose to pay an additional $100 expedited fee for guaranteed 2 business day processing.
Additionally, you may want to perform a search of available domain names. Regardless of when you want to set up a business website, it can be helpful to purchase a matching domain name to avoid any stress about finding one in the future.
Restricted Words
When choosing an LLC name, keep in mind that you cannot include any words that run the risk of confusing your business with a government entity. This includes “IRS,” “Treasury,” or “State Department.”
You should also be aware that using words such as “bank,” “attorney,” or “chiropractor” may require the presence of a properly licensed individual in your LLC and filing separate paperwork. Ohio does not allow the formation of professional LLCs, and only certain licensed professionals can form professional corporations. More information on these requirements can be found here.
Using an Assumed Name
Ohio allows LLCs to use an assumed or DBA (doing business as) name for their business. Having an assumed name means you continue using your legally registered LLC name on all official documents but a different registered name when interacting with the public. This can be a great choice for a business owner who wants to market their LLC a specific way or maintain an extra level of privacy.
To register your DBA name in Ohio, you need to file a Name Registration with the Ohio Secretary of State’s office. It can be filed online or mailed to one of the addresses on the form (there are separate addresses for regular or expedited filings). There is a $39 filing fee, and you can choose to pay an extra $100 for expedited filing.
Step 2. Choosing a Registered Agent
All LLCs in Ohio are required to appoint a registered agent — also called an agent for service of process. The registered agent for your LLC is responsible for receiving all legal documents, government communications, and tax documents, essentially acting as a contact point between your business and state or federal agencies. They are also the responsible party that is contacted in the event of a lawsuit against your LLC.
You can appoint any Ohio resident or a business authorized to conduct operations in the state as your registered agent. As long as your appointee has a valid Ohio street address and is available during regular business hours, they are eligible to be your registered agent. Your agent is required to certify that they are an Ohio resident when it comes time to file your Articles of Organization.
Step 3. File Your Articles of Organization
Once you have completed all the preliminary steps of setting up your LLC, you are ready to file your Articles of Organization with the Secretary of State’s office. This document will provide important information about your business that the state needs to keep on file. You can preview some of this information below.
- Your LLC’s name
- The effective date of your Articles – either immediately or at a future date
- Your LLC’s duration, if not perpetual
- Your LLC’s general business purpose
- Your LLC’s principal office address, email, and phone number
- Your registered agent’s name, address, and signature
- The signature of your LLC’s manager, member, or an authorized representative
You can file your Articles of Organization online or through the mail. There is a $99 filing fee associated with this form, and you can choose to pay expedited service fees that range from $100 to $300 depending on the speed. More details can be found on the Articles of Organization paper form.
Online
To file your Articles of Organization online, you need to visit the Ohio business filings portal. From there, select the option to create a new business filing and follow the instructions to create your online account. Once created, you can proceed through the online Articles form. Upon submittal, you will be prompted to pay the $99 filing fee and any expedited service fee that you have chosen.
By Mail
If you want to file your Articles of Organization through the mail, you must print out and complete the paper form. Once the form is completed, place it in a sealed envelope along with a check for the $99 filing fee made out to the Ohio Secretary of State.
To receive expedited service, check the appropriate box on the form and add the extra fee onto the original filing fee on your check. Send the sealed envelope to one of the addresses below (select the one that matches your filing type).
Regular Filing:
Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
Expedited Filing:
Ohio Secretary of State
P.O. Box 1390
Columbus, OH 43216
Step 4. Create an Operating Agreement
Ohio LLCs are not required to create or file an operating agreement with the state, but you may want to create one anyway. An effective operating agreement sets clear guidelines for how your LLC is managed, the rights that members or managers have, and what to do if your LLC dissolves or experiences a lawsuit.
If you choose not to create an LLC operating agreement, Ohio LLC law will dictate how your LLC is to be managed in the event of dissolution, conflict, or lawsuit. This may not be in your best interests, so creating an operating agreement can protect yourself and your assets.
For help creating an operating agreement, you can check out a template online. Make sure to change all applicable areas to match what you decided for your business and stay within Ohio LLC legal requirements; you can always consult with a business advisor or attorney to make this process easier.
Step 5. Get an EIN/Tax ID Number
After your LLC is officially established in Ohio, you must apply for a Tax ID number, also known as an EIN (Employer Identification Number), through the IRS. Any LLC that has more than one member — or any single-member LLC that wants to hire employees or chooses to be taxed as a corporation — must apply for an EIN.
Your EIN is used to identify your business to the IRS on all tax documents and necessary government filings; the number acts as a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts, or apply for business funding, you need an EIN.
It is free to apply for your EIN with the IRS, and you can file the application online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you must file for your EIN through the mail.
Online
The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your free EIN.
By Mail
You need to fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Step 6. Keeping Your LLC Running
There are specific tasks that you need to keep doing a running basis to ensure that your LLC’s operations stay smooth and uninterrupted.
No Annual Report Requirement
While most states require LLCs to file annual reports and pay a fee each year, Ohio does not have this requirement. Once your LLC is established and operating in the state, you will not need to file any additional reports with the Secretary of State’s office.
Separate Your Business Finances
There is no requirement to open a separate business bank account for your LLC, but the Ohio Secretary of State’s office strongly recommends that you do this once your LLC has been established. A business credit or debit account can keep your LLC’s finances separate from personal ones, officially establishing the LLC as an independently operating business. This can protect your assets in the case of a lawsuit against your business.
You most likely need to show your Articles of Organization, operating agreement, EIN, or other LLC documents to open a bank account for your LLC. Compare all your options before deciding which bank account to open, as banks will have varying minimum required balances or credit spending limits; you want to be sure that you select what is best for your LLC’s needs.
Keep Up With Federal and State Taxes
It is important to keep up with federal and state taxes while running your LLC to avoid major tax penalties or fines.
Federal Tax Requirements
There are several tax structures you can choose from to use in your LLC that may meet different company needs; each structure comes with its own unique type of federal taxation. This article can help you gain an in-depth understanding of the differences between each type and help you decide which is best for you.
In general, most LLCs are taxed as sole proprietorships or partnerships. This means you are expected to file Schedule C along with your individual income tax return to declare any income that you receive through your LLC. When using this tax structure, keep in mind that you most likely need to pay self-employment tax (at a rate of 15.3%) in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid IRS fines; the IRS website gives more details on this.
If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms are processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.
Ohio Business Taxes
Ohio does have a Commercial Activity Tax that LLCs and corporations are liable to pay in certain circumstances. If your LLC makes over a certain income amount per year, you are required to pay this tax. Any LLC that elects to be taxed as a sole proprietorship does not have to pay this tax. More information on this can be found here.
For LLCs taxed as either S or C corporations, Ohio may require your business to pay an additional financial institution tax. This tax replaced the state’s general corporation tax requirement in 2014. More information on eligibility to pay this tax can be found here.
If your LLC is taxed as a sole proprietorship or a partnership (these are pass-through entities), you are liable to pay individual state income tax on your business earnings. The Ohio Department of Taxation provides more information about taxes for pass-through entities here.
Sales and Use Taxes
LLCs that sell goods or services are likely liable to pay sales and use taxes in Ohio. The Ohio Department of Taxation is in charge of this tax, and you can find out more information about it, plus instructions on registering and filing for this tax, here.
State Employer Taxes
If your LLC is hiring employees, you need to pay withholding and unemployment insurance taxes in the state. Withholding taxes are handled through the Ohio Department of Taxation, while unemployment insurance taxes are registered for and paid through the Ohio Department of Job and Family Services.
Acquire Necessary Permits and Licenses
There is no general business license that your LLC is required to obtain in Ohio, but you may need to acquire permits or licenses on a local level, depending on your business. You should check with the County Clerk’s Office in the area that your LLC is located in for more information.
If you are offering professional services, you may need to meet state and national licensing requirements. You can find information on professional licensing here or by consulting the business checklist on the Ohio state government website here.
On a federal level, you may be required to obtain certain permits and licenses for your LLC, depending mostly on the type of business you run and the services you offer. For help determining if you need to meet additional federal licensure requirements, you can use the directory on the US Small Business Administration’s website.
Ohio LLC Resources
The below list of resources can guide you through each step of the LLC establishment process in Ohio.
- Available LLC name search
- Reserve an LLC name
- Available domain name search
- Register a DBA name
- Articles of Organization paper form
- Operating Agreement template
- Ohio Business Filings portal
- IRS EIN free application
- Commercial Activity Tax information
- Ohio Department of Taxation
- Ohio Department of Job and Family Services
- Ohio business checklists
- Professional licensing information
- U.S. Small Business Administration
Ohio LLC FAQs
Looking through these frequently asked questions may ease any lingering worries or fears about starting your LLC in Ohio.
In Ohio, it will cost $99 to file your Articles of Organization with the state, $39 to file an LLC name reservation and $39 to register a DBA name. You may also want to pay an additional $100 expedited service fee for a 2-day processing of these forms.
The cheapest way to start your LLC in Ohio is to file your Articles of Organization online or through the mail without first reserving an LLC name or registering a DBA name. Doing it this way will only cost $99 to get your business set up.
Filing Articles of Organization through the mail or online takes approximately 3 to 7 business days to fully process. If you want your LLC to be established faster, you can pay an extra $100 expedited service fee for 2 business day processing.
How much your LLC pays in taxes depends on the individual tax structure you set up for your business. You may also have to pay commercial activity tax in the state or other state taxes such as sales and use, withholding, and unemployment insurance tax. Make sure to consult with a professional accountant or financial advisor if you have concerns about your overall federal and state tax burden.
LLCs in Ohio are not required to file state reports or pay any kind of annual fee.
If you are finished conducting business under your LLC in Ohio, you need to file a Certificate of Dissolution with the Secretary of State’s office. There is a $50 filing fee for this form, and it can be mailed to the address printed on the document or filed online.
You also need to consult any operating agreements you have set up and ensure that you close your business according to the previously agreed-upon terms between those running your LLC.