We know that when you’re starting a new business, the idea of forming an LLC can be overwhelming.
Fortunately, it can be surprisingly easy to start an LLC in Ohio once you know what to do. With the correct information, you'll be able to get your business started and well on its way in no time!
By the time you finish reading this article, you will learn:
- How to start a Limited Liability Company in Ohio
- Other tasks you should complete after starting your LLC
- The amount of money you can expect to spend
Let's dive into the steps of starting a new business today!
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Step 1: Name Your Ohio LLC
The first step to starting an LLC in Ohio is to name your business. Ohio law places restrictions on business names. There are some words your LLC name must include. Тhere are also some words that aren’t allowed.
It’s important that you follow the rules when naming your LLC. If you don’t, you won’t be able to register your business.
Words You Have to Use
Ohio Revised Code Section 1705.05 requires LLCs to identify themselves as LLCs in their names.
All Ohio LLC names must include one of the following words:
- “limited liability company”
Words You Can’t Use
Your new LLC’s name must also be “distinguishable,” or different, from other business names that have already been registered with the Ohio Secretary of State. This rule exists to make sure people don’t confuse one business with another.
Ohio Revised Code Section 1701.05 lays out several name guidelines. You can use these when deciding whether your new business name is different enough from other registered names.
The law says that:
- Using a different word or abbreviation to designate the legal entity type of a business does not make a name distinguishable.
- Using different articles, conjunctions, contractions, abbreviations, or punctuation does not make a name distinguishable.
- Using a different tense or number of the same word does not make a name distinguishable.
The business name “Sawyer and Sons, LLC” is not distinguishable from any of the following:
- “Sawyer and Sons, Ltd.”
- “Sawyer & Sons, LLC”
- “Sawyer and Sons LLC”
- “Sawyer and Son, LLC”
The Ohio Secretary of State also applies its own set of rules when deciding if a name is available. For more information, check out the Secretary of State’s Guide to Name Availability.
You will need to avoid including words or phrases in your name that imply that your business is a government entity, belongs to certain regulated industries or is a different type of business entity.
For example, you cannot use a name that implies that your LLC is:
- A bank
- A trust
- A legal firm
- An insurance company
- A cooperative
- A corporation
You should check Section 1701.05 to see if your name falls in a prohibited category.
The big rule is this: if you need a license to do your job, double-check with the Secretary of State to make sure your company name complies with the law.
Research the LLC Name You Want
Once you have decided what you want to name your new business, you can check if the name is available. The easiest way to do this is to use the Secretary of State’s Business Name Search tool. You can also call or email the Secretary of State to find out if your name is available.
If the name you want to use has already been registered by someone else, you can only use it if the other business agrees to let you. To prove that you have received approval, you will need to file a Consent for Use of Similar Name (PDF) form (Form 590) when you register your LLC.
If the name you chose is available, you can reserve it for up to 180 days. This will prevent someone else from registering your name during this period. You must submit a Name Reservation form (Form 534B) and a $39 processing fee to the Ohio Secretary of State to reserve a name.
For your reservation form to be processed as quickly as possible, you should submit it online using the Secretary of State’s website. However, you can also submit the form by mail.
Get a Matching Domain
Once you settle on an LLC name, we recommend you get a matching domain, even if you don’t have immediate plans for a website.
Competitors can buy your perfect domain and its variations to block you from using them.
Domain squatters sift through public records of newly registered LLCs and will buy their matching URLs, only to relist them with huge markups.
A domain name from GoDaddy.com or a similar registrar will cost you between $20 and $50 per year, with regular specials and sales where you can get large discounts.
It pays to check now.
Once you have your domain name, you can also create a branded email address through GoDaddy.
Ohio DBA: Using a Fictitious Business Name
When choosing a name for your LLC, remember that you don’t have to use your official legal name out in the real world. Instead, you can use a “doing business as” (DBA), known in Ohio as a “trade name” or a “fictitious name.”
A DBA is a name that you use when marketing and operating your business. By registering a DBA, you can operate your LLC using a name that is different from its legal name.
In Ohio, you will need to file a Name Registration (PDF) form (Form 534A) with the Ohio Secretary of State to register your DBA. You will also need to pay a $39 filing fee.
DBAs are very common among LLC owners. This is partly because you do not need to include the words “limited liability company” or one of the approved abbreviations in your DBA.
You can also use a DBA to change your business’s name as it grows without having to register a brand new LLC.
If your LLC’s legal name is “Caroline’s Cookies, LLC,” you could use a DBA of “Caroline’s Cookies.”
Now say that your business grows, and you start selling cakes, pies, and pastries as well as cookies. You could register a DBA of “Caroline’s Bakery” so that the name you are using to operate your business is more accurate.
Step 2: Appoint a Registered Agent for your LLC
A “registered agent” is an individual or business that accepts legal papers and other official documents for the business. In Ohio, a registered agent is known as a “statutory agent.”
Ohio Revised Code Section 1705.06 requires that all LLCs appoint a registered agent to receive service of process. Receiving service of process is a legal term that means accepting the court documents that are sent during a lawsuit. If your LLC is ever sued, your Ohio registered agent will be the one that gets the papers.
The statutory agent can be a business or a person aged 18 or older. The agent must have a physical address in Ohio. They must also be able to receive papers during regular business hours.
Some small business owners choose to appoint themselves as their LLC’s registered agent. There are a few benefits to doing it yourself:
- It’s cheap: You’re not paying someone else to do it for you.
- It’s easy: The only address and contact information you have to keep current is your own.
- It’s reliable: You will receive all important documents personally.
However, we strongly recommend against serving as your Ohio LLC’s statutory agent for several reasons:
- No privacy: Your name and address will be published on the Secretary of State’s website. This means that anyone with an internet connection can find this personal information.
- Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
- No breaks: You also must be available at all times during regular business hours to receive documents. This means no vacations, sick days, or leaving the office for lunch.
- Business interruptions: Client meetings can be interrupted by people serving process. That could be embarrassing or hurt your reputation.
- It’s your fault if you miss something: You always have to make sure your address is correct and up to date. If you make a mistake or miss something, you are held responsible.
Appointing a third-party registered agent service is a much better option than taking on this task yourself. A registered agent service typically costs about $100 per year and will notify you of any documents received within minutes.
If you are looking for a professional registered agent service, take a look at our Best Registered Agent ranking for some of our recommendations.
Using a professional registered agent company is a good idea if you intend to do business in multiple states and will need to register as a foreign LLC. By using a professional service, you can let a single company handle these duties across several states.
Step 3: File Your Ohio LLC Articles of Organization
Articles of organization are the legal document that establishes the LLC. They include basic information about the business.
Once you have chosen your business name and registered agent, you will need to file articles of organization for your LLC with the Ohio Secretary of State.
If you would like to avoid the hassle of handling your LLC filing yourself, you can also use a professional LLC formation service. Check out our Best LLC formation services article for some of our suggestions.
What to include in my Ohio Articles of Organization?
To form an LLC in Ohio, you will need to file an Articles of Organization form (Form 533A).
Ohio Revised Code Section 1705.04 says that the articles of organization must include:
- The filer’s name and contact info
- The LLC’s name
- The statutory agent’s name, address, and signature
- An authorized representative’s signature
You can also choose to include an effective date, the period of the LLC’s existence, and the LLC's purpose in the articles of organization. However, this information is not required.
If you do not include an effective date, the articles of organization will go into effect on the day they are filed. If you do not include a period of existence, the LLC will exist until it is dissolved.
You can file the articles of organization online or through the mail. We recommend using online filing to speed up the process.
Ohio LLC Filing Fee
In Ohio, the filing fee for articles of organization is $99. You can pay through the online portal when you submit the articles.
Ohio LLC Processing Time
After you submit the articles of organization, the Secretary of State will process them in about three to seven business days. These processing times may vary depending on the office’s current workload.
For an additional fee, you can request expedited filing. Ohio offers three levels of expedited service:
- Two business days: $100 fee
- One business day: $200 fee
- Four hours: $300 fee; must be received by 1:00 p.m.
To receive one-day or four-hour service, you must hand-deliver the articles of organization to the Secretary of State’s Client Service Center.
Step 4: Draft your Ohio LLC Operating Agreement
An operating agreement is a legal contract. It explains the LLC’s structure and each member’s rights and obligations. In other words, your operating agreement will create the rules for your LLC.
Ohio Revised Code Section 1705.081 says that an operating agreement controls the relationships between the LLC’s members. Ohio law does not require you to create an operating agreement. You also do not have to file the contract with the Secretary of State.
However, we strongly suggest that you draft and sign one when starting an LLC. An operating agreement will ensure that each LLC member agrees on how the business will operate. This can help avoid future conflicts.
For example, say one of the members of your LLC wants to leave the business. Your operating agreement should cover the process for buying out a member’s interest in the LLC. It can also set up the plan for transferring their responsibilities to someone else.
Operating agreements can have rules covering a wide variety of topics:
- Who can sign contracts on behalf of the LLC
- How members can leave the LLC
- How new members can join
- How and when profits are paid to members
- How managers can be hired and fired
- Whether there are annual company meetings and how votes take place
- How the LLC should be treated by the IRS for tax purposes
- What happens when the business ends (dissolution)
Your operating agreement is an important element of your future business. You and your business partners should discuss and carefully review the operating agreement before signing it.
The state of Ohio does not require you to file your operating agreement with the Secretary of State or any other agency. While you don’t have to file it, it’s still important that you keep a copy of your agreement along with your company records.
Step 5: Get an EIN (Employer Identification Number) for Your Ohio LLC
An Employer Identification Number (EIN) is a federal nine-digit tax ID number that the IRS assigns to a business. It's essentially a social security number for your business. You will use it to file taxes and conduct other business-related transactions with the government.
Here are the most common times when you need an EIN:
- Does your LLC have more than one member?
- Does your LLC have any employees?
- Is your LLC taxed as a C corporation or S corporation?
If the answer to any of the above questions is yes, you will need an EIN.
Single-member LLCs are not required to use an EIN. Instead, you can use your SSN. However, getting an EIN can help you keep your business and personal finances separate and avoid identity theft. Many banks also require an EIN to open a business account.
You can apply for an EIN online through the IRS website, or you can submit an application by mail. We recommend applying online, as you will receive your EIN immediately.
The entire process only takes a few minutes, so you should never pay someone to get an EIN for you.
First Tasks After Registering your Ohio LLC
Registering your Ohio LLC is only the first part of starting a new business. After you register with the Ohio Secretary of State and the IRS, there are several essential tasks you need to handle to set your LLC up for success.
Open a Business Bank Account
Ohio law does not require you to open a business account for your LLC. However, a separate bank account for your LLC will help you to keep your records organized. It will also help maintain the personal asset protection offered by an LLC.
Here are a few reasons why you should consider opening a business bank account:
- Convenience: Keeping things separate makes your LLC’s bookkeeping much simpler.
- More business opportunities: Your LLC can only receive credit card payments through a business account. You can also do business with people who won't take personal payments.
- Personal asset protection: Mixing your personal and business funds could cause you to be held responsible for the LLC's debts.
The third point, avoiding liability, is critical.
One of the benefits of having an LLC for your business is that, if your business is sued, they can’t take your personal assets. The idea that you and your LLC are separate is known as the “corporate veil.”
Suppose you don’t maintain separation between your business and personal assets. In that case, the corporate veil can be “pierced.” If you treat the LLC’s assets like they are your own, the law won’t consider you and your LLC to be separate entities. This means that your business creditors can go after your personal assets if you’re sued.
Opening a business bank account will help keep the corporate veil intact, which will keep your personal assets protected.
Get Business Insurance For Your Ohio LLC
It’s common sense that you should have insurance to protect your assets if you own a business. Business owners must understand their risks and get the right insurance coverage after starting a new LLC.
The first step is to obtain any insurance types that are required by law.
If your LLC has at least one employee, you must have workers’ compensation insurance. This coverage must be purchased from the Bureau of Workers’ Compensation.
You can apply online by submitting an application (Form U-3). There is a minimum application fee of $120.
If you have employees, you must also register with the Department of Job and Family Services. This will tell you if your LLC needs unemployment insurance. You can register your business online through the Employer Resource Information Center.
You should also invest in liability insurance for your LLC. If you don't have liability coverage, you could lose a lot of money after an accident or mistake.
Here are some types of liability insurance you should consider for your LLC:
- General liability insurance: You’ll need this if there's an injury on your property. It pays for damages and a lawyer if you need one.
- Commercial automobile insurance: This works like your own car insurance. It covers drivers and vehicles for your business.
- Commercial property insurance: This protects your property in the event of damage. Keep in mind that flood insurance is often a separate policy.
- Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
- Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know exactly what kinds of losses will be covered.
Keep Your Ohio Company Compliant
Ohio LLCs need to comply with many legal requirements. Some examples include getting a permit or business license and paying taxes. Complying with the law is an important part of being a business owner. It’s essential that you stay on top of any changes in the law to stay compliant.
Ohio Business Permits and Licenses
You may need to get a business permit or license for your LLC to operate legally. It depends on the type of business you operate and where it is located.
To learn more about state licensing requirements, check out this guide to Starting Your Business in Ohio. For more info about local licenses, you can reach out to the county or city clerk.
Ohio Tax Requirements
While LLCs are generally not subject to a corporate income tax, they may have to pay a commercial activity tax if their gross sales exceed $150,000. In addition, LLCs with employees are also required to withhold payroll taxes from their employees and pay employer payroll taxes.
Federal LLC Tax Filing Requirements
Your single-member LLC or multi-member LLC is considered a pass-through entity for federal tax purposes. Profits or losses from your LLC should be on Schedule C of your personal tax return.
You must pay federal Social Security and Medicare taxes as an LLC owner. This is true even if you don't have employees. If you have employees, you must also withhold Social Security and Medicare taxes from their pay.
Annual Report and other Filing Requirements
Ohio LLC owners are not required to submit an annual report. They also do not have to pay annual fees.
Ohio Business Formation Quick Links
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
- Ohio Secretary of State Business Services
- Apply for an Employer Identification Number (EIN)
- Ohio Bureau of Workers’ Compensation
- Ohio Department of Job and Family Services
- Ohio Department of Taxation
- Starting Your Business in Ohio
Ohio LLC FAQs
How much does it cost to start an Ohio LLC?
Forming an Ohio LLC costs $99. You can pay this through the Ohio Secretary of State’s online portal.
What is the processing time to form my Ohio LLC?
LLC formations in Ohio take three to seven business days. For an additional state fee, you can request expedited filing. Ohio offers three levels of expedited service: an LLC can be formed in two business days ($100 fee), in one business day ($200 fee) or within four hours ($300 fee).
What are the benefits of an Ohio LLC?
An Ohio LLC protects your personal assets from business creditors. LLCs are also not required to pay income taxes.
Where do I check if my Ohio LLC name is available?
The easiest way to do this is to use the Secretary of State’s Business Name Search tool. You can also call or email the Secretary of State to find out if your name is available.