How to Form an Ohio LLC

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Ohio LLC Quick Facts

Ohio LLC Costs

Initial LLC Filing Fee- $99

 

Recurring State Fees – $0 (no annual report)

LLC Processing Time

By Mail: typically up to 1 week

Online: 2-3 days

 

Expedited processing is also available for an additional fee.

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Quick Reference

The Limited Liability Company (LLC) is a popular entity structure for businesses starting in Ohio.  The LLC provides personal liability protection and has the potential to save money on taxes. With our step-by-step guide, you can learn how to form an LLC in Ohio without an attorney.

Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting the business owner’s personal assets.

Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.

Related: How Does an LLC Protect You?

 

Cost to Form an Ohio LLC

To form a Limited Liability Company in Ohio, file the Articles of Organization with the Ohio Secretary of State.  The LLC filing fee is $99.

Approval for the LLC is typically around one week but can be faster if you pay to expedite the processing.  The expedited cost to register in 2 business days is an additional $100, 1 business day is an additional $200, and 4 business hours is an additional $300.

If you have questions, contact the Ohio Secretary of State at 877-767-6446 or busserv@OhioSecretaryofState.gov.

Guide to Forming an LLC in Ohio

The steps for filing online or by mail are largely the same.  The screenshots show how to file a domestic Limited Liability Company online.

Forming an LLC can be both affordable and is something most people can do themselves. Entity formation companies like IncFile or IncAuthority help guide you through the process and make sure there are no mistakes.

Related: Should you use a Formation Service, Hire an Attorney or Do it Yourself?

An out-of-state LLC wanting to do business in Ohio will have to register as a foreign LLC by filing the Registration of a Foreign Limited Liability Company (Form 533B) with the Ohio Secretary of State.

Step 1: Create a Profile

How to Form an LLC in Ohio

  • Create a user profile.
  • Then select “File a New Business or Register a Name”

Register a New Business in Ohio

  • Click on the drop-down menu “Forms available to file online” and select “Limited Liability Company (Ohio) $99”  There is an option for “Limited Liability Company (Non-Ohio), and this is for a foreign LLC, which means it is an LLC from out-of-state wanting to do business in Ohio.   Click “Continue” to proceed.

Register an LLC in Ohio

Step 2: Search Available Names

Enter the name you want for the LLC.  The LLC’s name also has to differ from other entity names registered with the Secretary of State.  If you aren’t ready to file yet, you can check on Ohio LLC name availability to ensure the one you want is available.  If the name you want to use is considered similar to another, you can file for a Consent for Use of a Similar Name form and add the form as an attachment on a later page.

The name of the LLC must include one of the following words or abbreviations at the end of the business name:

  • Limited Liability Company
  • Limited
  • L.L.C.
  • LLC
  • Ltd
  • Ltd.

A comma may be used after the business name and before the designator.  “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.

Even if the name you select is available, it isn’t final until the Secretary of State manually searches to see if anyone else is using it.

If the initial search comes back as available, click on “Continue” to proceed.  Before settling on a name, you may want to see if a domain name is also available to match your business name and website address.

If you plan to use a different name from the one that you register (perhaps you want to run multiple businesses under the LLC), you can use a trade name (sometimes referred to as a fictitious name, assumed name, DBA, or Doing Business As name).  To register a name the Trade Name Registration Application (Form 534A) along with the $39 filing fee should be sent to the Ohio Secretary of State.

If there is a name you want, but are not ready to register the LLC, you can file the Name Reservation form (Form 534B). The name reservation will hold a name for up to 180 days, at a cost of $39.

Register Ohio LLC Name

Step 3: Enter Company Information

Name of Company – Assuming it was available, enter the name from the previous screen.

Effective Date – If you want the LLC to start as soon as it is filed, choose the next available date.  If you want to LLC to start later, enter a date less than 90 days in the future to start.  The main reason for delaying the LLC start date is when the filing is being done close to the end of a calendar year, and the business isn’t going to have any activity until the start of the year.  By delaying until the following year, they will reduce the number of end-of-year filings.

Period of Existence – In this section, you can indicate how long it will remain in existence.  Most LLCs will choose a “Perpetual” duration as they plan to operate indefinitely; however, some businesses (usually investment-related) will have a specific closure date.

Purpose – Select whether your LLC is a non-profit or for-profit.

Purpose Clause – This is an optional section but would provide some basic information about what the business does.  If left blank, the default is “An LLC may be in existence for any and all lawful activity.”

Related: How to Answer the Business Purpose Statement.

Ohio LLC Company Information

Step 4: Assign a Statutory Agent

To have an LLC in Ohio, a Statutory Agent (sometimes referred to as a Registered Agent) must be identified.  The Statutory Agent can either be a resident of Ohio or a Statutory Agent service.  The agent must have a physical address in the state (PO Boxes are not allowed), be available during normal business hours, and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc. on behalf of the LLC.

You are not required to pay for a Statutory Agent. Any individual meeting the requirements can be the agent; however, the agent’s name and address become public record, and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when doing business from home or still employed.  Hiring a registered agent service like Northwest Registered Agent to be the Statutory Agent will reduce unwanted phone calls and mailings.

The Statutory Agent must also provide consent they consent to be the agent for this LLC.

Ohio LLC Statutory Registered Agent

Step 5: Add Attachments

This is an optional section and not used by most LLCs.  Here you would include additional rules for the operation of the LLC.

Some reasons to add an attachment would be in the following situations:

  • The business name you have selected is already in use in Ohio.
  • The business information would not fit in the text fields provided on this system, and you need additional space to provide additional information.
  • 4 or more representatives are signing the Articles of Organization.

Step 6: Sign

Have a member(s), manager(s), or other organizers enter their name.  Anyone who signs certifies they have the authority to sign on behalf of the LLC.

Step 7: Review

Review that all the information is correct.

Step 8: Pay and File

Pay and file the Articles of Organization.

In approximately one week, if filing normally, the LLC will be approved.

If sending by mail, the address is:
​​​Ohio Secretary of State,
PO Box 670
Columbus, OH 43216

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Tasks After Forming Your LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare an Ohio LLC Operating Agreement

The operating agreement is a document that governs the framework of an LLC.  This document covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

  • The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
  • Member’s personal liability protection may be diminished.
  • Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Related: Ohio operating agreement template

Obtain an EIN

The EIN or Employer Identification Number (also called a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes. The EIN will be needed to hire employees, open a bank account, build business credit, register for business licenses and permits, file federal and state taxes, and more.

There is no cost for the EIN when registering through the IRS. The number is available immediately when applying through the IRS website; however, you can also register by phone, fax, or mailing IRS Form SS-4.

Related: How to Apply for an EIN

Elect the LLC’s Form of Federal Income Taxation

One of the significant benefits of the Limited Liability Company is the tax flexibility it provides.  When applying for the Employer Identification Number, you will choose how the entity will be taxed for federal income tax purposes. While there are some limitations, an LLC may be classified for federal income tax purposes as a:

  • Sole proprietorship
  • Partnership
  • C-corporation
  • S-corporation

While this may sound confusing, this refers to how the LLC is taxed, not the legal structure.

Related: How can an LLC be taxed?

By default, the taxation of an LLC is called pass-through taxation, which means the profits or losses of the LLC flow through to the members.

Single-member LLCs will, by default, be taxed as a sole proprietorship. The members can also elect to change the taxation to a C-corporation or an S-corporation.

Multi-member LLCs will, by default, be taxed as a partnership. The members can also elect to change the taxation to a C-corporation or an S-corporation.

In general, the difference between being taxed as a corporation and being taxed as a sole proprietorship or partnership the profits and losses are passed to the member’s federal income tax returns based on their percentage of ownership.  As a result, the owner will pay self-employment taxes on all business profits.  As an alternative, electing to be taxed as a corporation allows the members to take a reasonable salary and then pay payroll taxes.  Any remaining profits are distributed and aren’t subject to payroll taxes, resulting in potential tax savings.

Before electing how your LLC will be taxed, consider talking with an accountant to assess which one will be best for you. Some tax elections, such as the C corporation, may be detrimental for some people due to double taxation.

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

  • A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
  • Copies of the original formation paperwork from the state showing the creation of the LLC.
  • Driver’s licenses of the members.
  • Occasionally the bank will request an Ohio Certificate of Good Standing prove the LLC is active and in good standing with the state.

Related: How to Open a Business Bank Account for your LLC 

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:

  • Business License – Some cities require businesses to obtain licensing before they can start.
  • Professional License – Certain services such as barbershops, accountants, salons, and others must be licensed.
  • Vendor’s License – Businesses selling products and certain services, will need to register for a sales tax permit with the Ohio Department of Taxation will be necessary.
  • Commercial Activity Tax – All businesses that make over $150,000 will need to register and pay the CAT. The minimum tax is $150 and is paid to the Department of Taxation.

Related: What Business Licenses are Needed in Ohio?

Get Business Insurance

Even with the liability protection of the LLC, business insurance is important to protect the business. The most common types of insurance include:

General Liability Insurance – covers damages owed and medical expenses for accidents that happen at your place of business.
Business Property Insurance – replaces damaged, stolen, or lost business property. This includes your physical business location, equipment, supplies, and anything else you used to run your business.
Business Vehicle Insurance – covers company vehicles and may also include coverage for personal vehicles used for business-related activities. Many personal policies won’t cover your vehicle if there is an accident while being used for business purposes.
Workers Compensation Insurance – mandatory in most states if you have employees, this insurance covers medical expenses that occur because of an accident or injury that happens to one of your employees while they’re at work.

Related: 7 Types of Insurance Your Business May Need