Are you ready to set up your LLC in Ohio? The procedure is quite simple and easy to follow. There are certain steps you need to follow in order to come one step closer to your business dream!
TRUiC is here to help you all the way with your startup, providing all the proper information and tools for your business. Here is a list of how to form an LLC in Ohio:
Find the name
This step is crucial because the name of your LLC will follow you and it will definitely define your service. Most of the time, when there is a clever and catchy name, customers tend to remember it more easily. It should also be something that hasn’t been used by other companies or is not similar to them, for legal reasons. Don’t forget that the name should also follow the regulations of Ohio, so be sure that you know everything about the naming rules.
The basics are:
- Avoid names containing words like bank, banker, banking, trust, etc. If you do so you must have the approval of the Ohio superintendent of financial institutions.
- Make the name stand out from other LLCs in Ohio.
- It should contain words like limited liability company, limited company, or the abbreviation LLC or L.L.C.
What is the best way to find a proper name?
There isn’t a specific way to do so, but if you have a plan of what your services will offer this can be very helpful because you will be able to find keywords that reflect your business. The quicker you buy a domain name the better for your company because an internet site is a must if you want your business to be professional.
Appoint a registered agent
After you have filed your LLC Articles of Organization the next step is to find a registered agent in Ohio. This individual or corporation will be in charge of all the necessary documents, like tax papers. The agent should be either a resident in Ohio or work for an Ohio company. Among other responsibilities, these are some of the things that a registered agent has to do:
- Should have a fixed timetable, generally 9-5.
- Reach deadlines, know important dates, and file notices in time.
File your LLC Articles of Organization
With this step, you make your LLC legal. It can be done either by a lawyer, a professional LLC filing service, or even by you. If you choose the last option, then you will do it either online by using the Ohio Secretary State website or by completing a specific form and mailing it to:
Ohio Secretary of State
P.O. Box 670
Columbus, OH 43216
Standard processing time is 24 hours if filing online and 5 to 10 days if filing by mail. For 2-day processing the fee is $100, 1-day processing is $200, and 4-hour processing is $300.
Ohio LLC Operating Agreement
This document will define each of the member’s roles and will outline the structure of your LLC and its management, according to Ohio business law. For example, it will state clearly how existing members can terminate or transfer their membership or how new members will be admitted.
Employer Identification Number (ΕΙΝ)
With this number, your business can be tracked by State and Federal Agencies. It is also known as a Federal Employer Identification Number (FEIN), or a Federal Tax Identification Number (FTIN).
You will need it especially when:
- You hire any employees.
- Open a business account.
- File federal and state taxes.
Protection of your LLC
When you finally form your LLC you will need to be sure that everything will be under control and with the least amount of risk. This is why you should have separate bank accounts: one for your personal issues, and another one for your business. All you need to do is visit the bank, create a business account, and get a business credit card. This will build your company’s credit history and, in the future, you’ll have the right to raise capital.
In order to ensure that your business is safe and in order to reduce its liability, here are the two basic insurance business types:
- General Liability Insurance: This is the most common type for small businesses. It protects them from lawsuits.
- Professional Liability Insurance: This type is ideal for professional service providers, for example consultants, and it covers claims of malpractice and other business errors.
Licenses and Permits
If you want your Ohio business to work properly you must follow all the rules according to federal, state, and local government regulations. Some permits vary from state to state, so you must be very cautious while setting up your LLC.
A well-organized accounting system will lead to success. A business has so many issues to take care of, including the many aspects relating to the finances of the business. This is why you should take into consideration how you will be able to maintain your accounting.
Here are two options that you can decide between:
- DIY accounting software, with the risk of making errors, if you have no experience.
- Professional accounting service which will provide you with all of the necessary advice to help with your bookkeeping, taxes or any other services such as a payroll.
Commercial Activity Tax
In the state of Ohio, LLCs with taxable gross receipts that exceed $150,000 per year must pay “commercial activity” tax. If they are less than $150,000, they are exempt from the tax.
Building your own LLC is a very simple process, but it needs careful planning and thinking. The steps for setting it up in Ohio are easy and all you need to do is take into consideration the above information. TRUiC will be here for you to assist you all the way, whatever the unique needs of your business.