To form an LLC in Ohio, here's everything you need to know.
A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Ohio. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
- Choose a name for your LLC.
- Appoint a registered agent.
- File Articles of Organization.
- Prepare an LLC operating agreement.
- Comply with other tax and regulatory requirements.
1. Choose a Name for Your LLC
Under Ohio law, an LLC name must include one of the following: “limited liability company,” “limited,” “LLC,” “L.L.C.,” “ltd.,” or “ltd."
Your LLC’s name must be distinguishable 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 (Form 534-B) with the Ohio Secretary of State. The application may be filed online or by mail. The filing fee is $39.
2. Appoint a Registered Agent
Every Ohio LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The registered agent may be a Ohio resident or a domestic or foreign corporation authorized to do business 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 articles of organization that the individual is an Ohio resident.
3. File Articles of Organization
An Ohio LLC is created by filing Articles of Organization for a Domestic Limited Liability Company (Form 533A) with the Ohio Secretary of State. The articles must include:
- the LLC's name
- effective date of Articles--upon filing or a later date
- term of LLC's if not perpetual
- LLC's purpose (optional)
- address, email, and phone number
- the name, address, and signature of the LLC’s registered agent, and
- signature of LLC member, manager, or authorized representative
The articles can be filed online or by postal mail. The filing fee is $99.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
4. Prepare an Operating Agreement
An LLC operating agreement is not required in Ohio but is highly advisable. The Operating Agreement is the primary document that establishes the rights, powers, duties, liabilities, and obligations of the members among themselves and to the LLC. The Operating Agreement is purely an internal document and is not filed with the Secretary of State. If an existing or newly created LLC does not adopt an operating agreement, its existing articles of organization, bylaws or operating agreement, and/or its member control or limited liability company agreement will collectively become its operating agreement.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo). If an operating agreement is created, it need not be filed with the Articles of Organization.
5. Comply With Other Tax and Regulatory Requirements
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website (www.irs.gov). There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, consult the checklist section in the Start a Business page at business.Ohio.gov. For more information, see Nolo's article How to Get a Small Business License in Ohio.
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 including SMLLCs. For more information on Ohio LLC tax registration, see Nolo's article Ohio LLC Annual Filing Requirements.
6. Foreign LLCs Doing Business in Ohio
To do business in Ohio, all LLCs organized outside of the state must register with the Ohio Secretary of State. Foreign LLCs must appoint a registered agent for service of process. The agent may be (1) an Ohio resident, (2) an Ohio corporation, or (3) a foreign corporation that has a place of business and is licensed to do business 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.
To register, file a Registration of a Foreign Limited Liability Company (Form 533B). The application may be filed online or by postal mail. The filing fee is $99.
The completed application must be accompanied by a certificate of legal existence or good standing from the foreign LLC’s home state, dated no more than 60 days prior to the filing of the certificate.
Before filing, make sure the LLC’s name is available in Ohio by checking the Ohio business name database. If the name is not available, the foreign LLC must adopt a trade name for use in Ohio. File a Trade Name Registration application (Form 534 A) with a $39 fee. The form may be filed by postal mail or online.