How To Start an LLC in Ohio 2024: Step-by-step Guide

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• Ohio requires registered agents to be the service point for important company correspondence. 
• Business owners must file articles of organization to start an LLC in Ohio, paying the $99 filing fee.
• An operating agreement is not required but is highly recommended for an Ohio LLC, as it outlines processes for key areas of business.

How To Start an LLC in Ohio 2024: Step-by-step Guide

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How to Start an LLC in Ohio

Learning how to start an LLC in Ohio opens the door to new tax savings opportunities. Here’s how to start.

Step 1: Choose a Business Name

There is more to naming an Ohio company than just coming up with a catchy business name. Ohio law requires that the name be distinguishable from other registered businesses in the state. You can check and ensure you’re in compliance by searching for your chosen name on the Secretary of State’s business search website.

Here are a few state-specific rules to consider as you select your name:

• Using contractions and abbreviations in a name doesn’t make it distinguishable. 
• Identifying the company as an LLC at the end of its name does not distinguish it from other names. 
• You can misspell a word or use the same base word to make it distinguishable. 
• You can also phonetically spell a word to make it distinguishable from another company. 

Aside from being distinguishable, Ohio imposes other rules on naming a company. For example: Using a foreign language will not conflict with other companies named in the English translation. However, companies can not be named something deemed a slur to an ethnic group, religion or gender.

Additionally, companies may not use names that imply government agency affiliation. Using terms such as “bank” or “trust” requires approval from the superintendent of financial institutions before registering with the Secretary of State.

Lastly, if you file for an LLC, the name chosen must have the words “Limited Liability Company,” “Limited,” “LLC,” “L.L.C.,” “Ltd.,” or “Ltd” at the end of it.

Step 2: Assign a Statutory Agent 

A statutory agent (also known as a registered agent), is the person or business entity designated by the company to receive mailings and documents on behalf of the company—such as one might receive from legal proceedings or a government agency.

Rules around registered agents are typically state-specific. For example: The statutory agent for an Ohio business must be an Ohio resident with a physical address in the state, and be available during regular business hours to receive documents. So long as the proposed registered agent meets these requirements, the LLC can name a member or manager as the statutory agent or hire a third party to do so.

If the company hires a third-party entity, the entity must be legally registered within the state to transact business. Hiring a third-party statutory agent can cost around $49-$99+ per year, per our expert analysis of available third-party services.

Step 3: File Articles of Organization

In order to register an LLC in Ohio, you must complete Form 610, Articles of Organization for a Domestic Limited Liability Company. It costs $99 to file the form, with expedited services adding anywhere from $100 to $300 to the total filing cost.

This step in the filing process is one of the more simple parts of learning how to start an LLC in Ohio, as the information you’ll need is fairly basic. Before you file, our experts recommend that you come prepared with the following:

• Your company name
• The effective date with a delayed date optional for up to 90 days
• The purpose of the company
• The statutory agent’s name and address
• The statutory agent’s acceptance and signature
• Any relevant organizers’ signatures

Typically, the fastest way to file is via the state’s Ohio Business Filing portal. Filing it via a paper form typically takes longer to process. While regular filing can take anywhere from three to seven business days, expedited options can cut the time down to two business days.

If you are mailing the form for regular filing, you can send it to:

Ohio Secretary of State

P.O. Box 670

Columbus, OH 43216

Send expedited processing forms to:

Ohio Secretary of State

P.O. Box 1390

Columbus, OH 43126

If you want to hand deliver the paperwork, you can do so at:

Secretary of State

Client Service Center

180 Civic Center Drive

Columbus, OH 43215

All checks should be made payable to the “Secretary of State.”

Step 4: Write an Operating Agreement

An operating agreement is an optional document in the state of Ohio—however, it’s recommended that you have one, as it’s designed to ensure that the company remains compliant with its Articles of Organization.

Additionally, your operating agreement typically outlines how the company will operate and the roles of members and managers. Our experts do want to reiterate: Even though it is optional and not filed with the state, it is highly recommended because, without it, the company falls under the default laws of Ohio. This can lead to problems with how the company operates.

For example: If a member of an LLC dies, Ohio law dictates that the heir has the option under the law to exercise the rights of a current member. This may create conflict within the organization.

The operating agreement should outline the following:

• Percentages of ownership among members
• Members’ voting rights and responsibilities
• Duties of members and managers
• How profits and losses are distributed
• When meetings will be held
• How to transfer interest upon death 
• Buyout and buy-sell rules

Members should create a company binder with the Articles of Organization, the operating agreement and the EIN.

Step 5: Obtain an Employer Identification Number (EIN)

As you learn how to start an LLC in Ohio, it’s important to remember that every new LLC should obtain an EIN from the Internal Revenue Service (IRS) to separate personal assets from business assets.

The EIN is an identification number assigned by the IRS so that the company can get bank accounts, credit accounts and permits under the business name rather than using personal Social Security numbers. This helps ensure that the members retain the liability protection that they sought when creating the LLC.

An EIN is free to obtain. All you need to do is complete Form SS-4 with the IRS. When you complete the form through the online portal, you get a new EIN immediately. Completing a paper application can delay the process, taking up to four days to process a fax application and up to four weeks to process a mailed application.

The fax and mailing address for this form are:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: 855-641-6935

Step 6: Open a Business Bank Account

The last step in establishing a new LLC in Ohio is to get a business bank account. This final step helps ensure that business revenues and debts are not attributed to members’ personal accounts. As a result, this also ensures the liability protection desired from the LLC structure.

To open a business bank account, you will need the Articles of Organization and the EIN. The bank representative will look up the business in the Ohio Secretary of State’s registry to validate that it is properly registered. Then, it will use the EIN to establish the new account in the business’s name.

When opening a business bank account, our experts recommend asking the representative about minimum balances and caps on the monthly transactions you can perform. You want to make sure that you get an account that meets your business needs, especially those of a new business. This question can also help you avoid fees or other concerns over the course of your account ownership.

How Much Does It Cost to File an LLC in Ohio?

It costs $99 to file your articles of organization with the Ohio Secretary of State. Hiring a firm to do this may incur additional costs.

Our experts do want to note that Ohio business entities are not required to file an annual report or pay an annual fee. However, Ohio businesses must register with the Department of Taxation and are subject to the 5.75% sales tax. There may be additional taxes for local authorities and municipalities.

Frequently Asked Questions

Who Authorizes an LLC in Ohio?

The Ohio Secretary of State is the government agency responsible for registering and authorizing any LLC in the state of Ohio. There is a $99 filing fee to register the LLC.

Do LLCs File Annual Reports in Ohio?

Ohio does not require LLCs to file an annual report. Some states do and charge an annual filing fee to do so. The lack of this requirement makes Ohio an attractive place to own and maintain an LLC for many.

How Long Does It Take for an LLC to Be Approved in Ohio?

It can take between seven and 10 business days to process LLC paperwork. This timeframe can be reduced by paying for expedited services with the Secretary of State. Expedited services can cost anywhere from $100 to $300.

The post How To Start an LLC in Ohio 2024: Step-by-step Guide first appeared on Newsweek Vault.