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.
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.
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.
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 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.
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.
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.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Ohio Secretary of State. You can conduct a name search for free on the Ohio SOS website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Ohio does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
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.
For most formation purposes, an Ohio single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Ohio are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Ohio and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain an Ohio state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a Ohio PLLC, see our article, How to Form a Professional LLC in Ohio.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take in How to Dissolve an LLC in Ohio.