To form a corporation in Ohio, you need to take the steps set forth below. To find out what's required to form a corporation in any other state, see Nolo's 50-State Guide to Forming a Corporation.
Your corporation's name must contain the word "Corporation," "Company," or "Incorporated," their abbreviations, or words or abbreviations of words meaning the same in another language.
Your corporation's name must be recognizably different from the names of other business entities already on file with the Ohio Secretary of State. Names may be checked for availability at the Ohio Secretary of State business name database.
You may reserve a name for 180 days by filing a Name Reservation with the Ohio Secretary of State. The application may be filed online or by mail.
Your corporation is legally created by filing Articles of Incorporation with the Ohio Secretary of State. The articles must include the corporate name and address of principal Ohio office; the effective date of articles if later than the filing date; if any; the name, address, and signature of incorporators. The articles must also list the number of shares the corporation is authorized to issue, whether they are common or preferred and if they have a par value (see "Issue Stock" below). The articles also provide the option of listing a stated capital amount. This should be left blank. Providing a stated capital amount confers no benefits and opens incorporators and directors to increased liability for corporate debts if the amount is not paid before the corporation begins.
The articles may be filed online or by mail. The filing fee is $99.
Every Ohio corporation must have an agent for service of process in the state. This is an individual or corporation that agrees to accept legal papers on the corporation's behalf if it is sued. A registered agent must be one of the following: (1) an Ohio resident; (2) an Ohio corporation; or (3) a foreign corporation licensed to do business in Ohio and authorized by its articles of incorporation to act as a statutory agent with a business address in Ohio. The registered agent must have a physical street address in Ohio. However, an individual agent may provide a P.O. Box as the agent address, but the agent must certify by checking the appropriate box in the registration that the individual is an Ohio resident.
Bylaws are an internal corporate document that set out the basic ground rules for operating your corporation. They are not filed with the state. Your corporation is not legally required to have corporate bylaws, but you should adopt them because they establish your corporation's operating rules, and help show banks, creditors, the IRS, and others that your corporation is legitimate. For corporate bylaw forms, see Nolo's website or Incorporate Your Business, by Anthony Mancuso (Nolo).
Keep your bylaws, meeting minutes, and other important corporate papers in a corporate records book. This can be a simple three ring binder or corporate records kit you order through a corporate kit supplier. Keep it at your corporation's principal office.
The incorporator—the person who signed the articles—must appoint the initial corporate directors who will serve on the board until the first annual meeting of shareholders (when the board members who will serve for the next term are elected by the shareholders). The incorporator must fill in an "Incorporator's Statement" showing the names and addresses of the initial directors. The incorporator must sign the statement and place a copy in the corporate records book. The statement need not be filed with the state. For a sample Incorporators Statement, see Incorporate Your Business, by Anthony Mancuso (Nolo).
The first meeting of the corporation's board of directors should be held at which the directors can appoint corporate officers, adopt bylaws, select a corporate bank, authorize issuance of shares of stock, set the corporation's fiscal year, and adopt an official stock certificate form and corporate seal. The directors' actions must be recorded in corporate minutes prepared by the incorporator or any of the directors. Additionally, if the corporation will be an S corporation, the directors should approve the election of S corporation status. For corporate meeting minute forms, see Nolo's website or refer to Incorporate Your Business, by Anthony Mancuso (Nolo).
Issue stock to each shareholder in return for their capital contributions of cash, property, services, or all three. Small corporations usually issue paper stock certificates. Enter each shareholder's name and contact information in the corporation's stock transfer ledger.
Ohio gives corporations the option of establishing a par value for their stock or issuing no par value shares. Par value is a set amount below which the stock cannot be sold--it has nothing to do with the stock's actual value. See Nolo's article "What is Par Value Stock."
Ohio exempts from registration unadvertised intrastate sales to no more than ten Ohio residents in any 12-month period provided the shares are purchased for investment, not resale. No state filings or fees are required for this exemption. Alternatively, Ohio exempts sales that qualify for the federal private offering exemption. You must file Form 3-Q, Report of Sale of Securities, with the Ohio Department of Commerce, Division of Securities within 60 days of the sale along with a $100 fee. For more information, see An Introduction to Ohio's Securities Laws for Startups & Small Businesses at the Division of Securities.
Additional tax and regulatory requirements apply to your corporation. These include:
EIN: Your corporation must obtain a federal employer identification number (EIN). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Department of Taxation: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you'll need to register with the Ohio Department of Taxation (DOT). For most tax purposes, you can register online through the Ohio Business Gateway (OBG) or by mail using the correct form (check the OBG site for details). Ohio also has a Commercial Activity Tax that applies to most Ohio business entities with gross receipts over $150,000.