This is the first and most important step in starting your LLC. Do some research to make sure the name you choose is suited to your business venture and is easily searchable by potential clients.
- Follow the naming guidelines: Your entity name must contain the words Limited Liability Company or the abbreviation L.L.C. or LLC. Restricted words require additional paperwork (e.g. Banc, Bank, Banque, etc) and/or licensed individuals (e.g. Doctor, Engineer, etc). to be part of the LLC. Prohibited words are those that would confuse the name of your LLC with a federal or state agency e.g. FBI, Secret Service, Treasury etc.
- Is the name available in Ohio? Make sure the name isn't already taken by doing a name search on the State of Ohio website.
- Is the URL available? Check to see if the name of your LLC is available so that you can reserve your domain name. Even if you don't plan to make a website today, you may want to buy the domain name in order to prevent others from acquiring it.
An email address is also something to consider when choosing a name. Get a professional email (@yourcompany.com) with Google apps. Also get access to the top business tools, cloud storage, and business-grade security. - Try it for free
You must nominate a Statutory Agent for your LLC in Ohio
What is a Statutory Agent? A statutory agent, also known as a registered agent, is a person or business nominated by your company to officially receive and send papers on your behalf including annual state filings.
Who can be a Statutory Agent? The statutory agent must be a resident of Ohio or a corporation authorized to transact business in Ohio. You may elect an individual within the company including yourself.
Click here to find out why you may want to use a statutory agent service.
Recommended: INCFILE.COM provides free registered agent service for the first year as part of their LLC Packages.
To register your LLC, you will need to file the Articles of Organization with the State of Ohio.
Important: If you're expanding your existing LLC to the State of Ohio you are forming a Foreign LLC. Learn how.
What is an Operating Agreement? An operating agreement is a legal document outlining the ownership and operating procedures of your LLC. This agreement allows you to form financial/working relationships with co-owners into an established system suitable to your business. An Operating Agreement is not required to form an LLC in Ohio, but is good practice to have one.
Recommended: We provide a free sample operating agreement however we recommend getting one professional drafted by a lawyer, especially if you are starting a multi-member LLC.
What is an EIN? The Employer Identification Number (EIN), or Federal Tax Identification Number, is used to identify a business entity. It is essentially a social security number for the company.
Why do I need an EIN? An EIN is required for the following:
- To open a business bank account for the company
- For Federal and State tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done by one of two ways:
* Important: An EIN is obtained after the LLC is formed. Obtaining an EIN registers the company for federal taxes.
Opening a business bank account is an important first step, as it:
- Separates your personal assets from your company's assets, which is necessary for personal asset protection.
- Makes accounting and tax filing easier.
Getting a business credit card allows you to:
- Separate personal and business expenses.
- Build your company's credit history, which can be useful to raise money for your company later.
* Recommended: Compare business credit card offers at CreditCards.com.
Even if you haven’t officially opened for business – it’s critical to get your books in order. A well managed accounting system will help you:
- Track your business finances, including bills, expenses and income.
- Simplify your annual tax filings.
The right software makes accounting easy. Look for software that:
- Syncs with your bank to automatically.
- Matches transactions to invoices, bills and purchase orders.
- Can be accessed from your phone.
*Recommended: Xero has the features that all small businesses need.
Try Xero FREE for 30 days and get 30% off your first 6-months.
Do I need to register for State taxes?
- If you have hired Employees in Ohio, you will need to register for Unemployment Compensation Tax and State income tax withholding on behalf of your Employees.
Register for Unemployment Compensation Tax through the Ohio Department of Job and Family Services.
Register for Employee Withholding using Ohio Business Gateway (create an an online account in order to register).
If you are selling a Product in Ohio, you will need to register for Ohio Sales Tax by obtaining a vendor’s license.
Find out how to apply for a Vendor’s license here.
In addition, Ohio imposes a Commercial Activity Tax on Ohio LLCs. Learn more about this tax here.
Do I need business licenses and permits?
To operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
Find out how to obtain necessary licenses and permits for your business:
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: Apply for or learn more about licenses, permits and registration with The State of Ohio's Business page under Licenses & Permits.
- Local: Contact your local Chamber of Commerce and ask about local licenses and permits.
- Alternatively, you can use a professional service to research all of your business licensing needs.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
What is Workers Compensation Insurance? This form of insurance is required for most businesses with employees, but varies by State. Click here to learn more.
What is General Liability Insurance? This is an important service, but is not required in most States. Click here to learn why.
How much will the right insurance cost you? Click here to find out.
Once a business decides to hire employees, certain legal obligations are required, such as:
- Ensuring that potential employees are eligible to work in the US
- Reporting employees as "new hires" to the State
- Providing workers compensation insurance for employees
- Withholding income taxes
- Printing compliance posters and place in a conspicuous location
- Ensuring payment of employees in specific increments as required by the state
Interested in more? Have a look at the Ohio State Website.
A great resource for posting jobs and finding qualified employees is Indeed.com
How to Start a Business
5 easy steps to starting a business in Ohio.
We have a far more detailed guide - How to Start a Business which will go over the points in more details.
- Identify a suitable business idea that works for you - Check out our Business Ideas Tool.
- Critically analyze your idea with our Lean Business Model Canvas Tool. You can then go on to create a full business plan with our Free Online Business Plan Tool.
- Formally organize your Business into a company. An LLC is the most popular way to structure your business. Learn how to Form your LLC in Ohio.
- Complete important key steps after formation such as acquiring business licences & permits, registering for state taxes, and opening a business bank account.
- Build your website and develop your brand. Learn more about marketing and brand establishment.
Ohio does not require an annual report to be filed. This makes it easy to maintain an LLC in the State of Ohio.
Commercial Activity Tax
In Ohio, LLCs with gross receipts in Ohio exceeding $150,000 per year are required to pay a “commercial activity” tax. LLCs with less than $150,000 in gross receipts are exempt from this tax.
Tax Calculation: Tiered based on taxable gross receipts. LLC's with between $150,000 and $1 million in gross recipes pay $150.Filing Information
Late filing penalty: $100 per month up to $1,000
LLCs are considered “pass-through” entities and do not ordinarily pay income tax directly. Nevertheless, some states require certain LLCs to report income for informational purposes. Ohio requires multi-member LLCs to report income and withhold income from members residing out of state.
More Information: Ohio Department of Taxation
If you have an existing LLC and want to register to do business in Ohio, you will need to form a foreign LLC.
File a Foreign LLC in the State of OhioDownload the PDF
Fee: $99 — Follow the instructions on the PDF.
Benefits of Forming a Foreign LLC
The major benefit of becoming a foreign corporation is that it allows your company to operate as one entity in many jurisdictions. For example, if you originally incorporate your LLC in the State of Delaware, you can file your existing domestic LLC as a foreign corporation in other states.