How to start your LLC in Dayton, OH

How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.

The rules for naming your company in Dayton, OH are fairly simple according to Ohio Revised Code Section 1705.05.

Your Ohio LLC name must end with one of the following:

• “limited liability company”
• “limited”
• “LLC”
• “L.L.C.”
• “ltd.”
• “ltd”

Ohio Revised Code Section 1701.05 does not let you use only the words “limited” or “company” by themselves to identify an LLC.

Your LLC name must be unique and easily distinguishable from other Ohio businesses. You want to avoid confusing the public with a name similar to that of another Ohio business.

Let’s say you have your heart set on the name “Dayton Air Conditioner Repair, LLC,” but after a search, you find another Ohio corporation named “Dayton Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.

If you make a simple change to your name such as “Dayton Air Conditioner Service, LLC,” you should be okay.

Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.

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.

Section 1701.05 also bans the use of names that implies your business is:

• A bank
• A trust
• A legal firm
• An insurance company
• A cooperative
• A corporation

If your business name implies that you carry any form of professional license, at least one of your members must have that valid license issued by an appropriate government agency.

For example, if your business is named “Dayton Private Investigations, LLC,” you’ll need to hold a valid Ohio Private Investigator License.

Before filing your paperwork, check to see if your name is available in Ohio. You can perform a search for the name using the Ohio Secretary of State’s Business Name Search Tool.

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 this, 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.

You can submit this form by mail, but for faster processing, we recommend submitting it via the Secretary of State’s Business Portal.

After naming your company, it’s also legal in Ohio to apply to do business under an assumed name or “DBA,” but more on that later in this article.

What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf. In Ohio, registered agents are known as “statutory agents”.

Service of process is a legal term for business letters or legal papers. Your statutory agent is the gatekeeper between you, the state, and the public.

Ohio state law requires that you appoint a statutory agent and provide their details at the time of filing your Articles of Organization. Ohio’s rules for naming and changing statutory agents are found in Ohio Revised Code Section 1705.06.

Registered agents must meet the following requirements:

• Be at least 18 years old
• Have a physical address in the state of registration
• Be available to receive mail and sign official documents during normal business hours, Monday to Friday, 9 a.m. to 5 p.m.

A statutory agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.

Some business owners choose to designate themselves as registered agents because:

• It’s cheap: You’re not paying someone for something you can do yourself.
• It’s simple: 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, there are several downsides to this:

• No privacy: You’ll have to make your address available to the public on the Secretary of State’s websites.
• Junk mail/spam: Public-facing addresses are swarmed by junk mail in addition to a small amount of legitimate mail.
• No breaks: Registered agents must be open for service during all business hours. They don’t get time off.
• Business interruptions: If your agency address is the same as your business address, your business and clients may be interrupted by your duties as an agent. If you are getting served with a lawsuit in front of customers, that could be embarrassing or even hurt your business.
• It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.

For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.

If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.

What are Articles of Organization? These documents turn your business idea into an actual legal entity ready to sign contracts and do business. Ohio law states that filing the Articles of Organization makes it official.

To file, you’ll need the following basic information as listed in Ohio Revised Code Section 1706.16 of the Ohio Business Organizations Code:

• 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 file the articles of organization online or through the mail. We recommend using the online Ohio Business Portal to speed up the process.

The filing fee for your Articles of Organization is $99.

Average processing times are estimated to be between 3-7 business days.

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.

To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.

What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.

Your operating agreement should list each member of the company and how they’re expected to work. It can be as simple or detailed as you’d like to make it.

Although not required by Ohio LLC law, we strongly urge you to consider one. Without an operating agreement, state law acts as a fallback. Remember that state laws don’t always work in favor of the business owner and may not align with your intentions.

The benefits of having an operating agreement include:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and its members. The operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations. They should be signed by every member and kept somewhere safe.

The best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.

What is an EIN? Employer Identification Numbers are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of companies and other business entities that pay taxes.

Here are the most common cases in which your business will need an EIN:

• You have more than one member
• You have employees
• Your business is taxed as a C or S corporation

We highly recommend getting an EIN even if they’re not required. Most banks and online payment services require them in order to open a business bank account for your LLC.

Obtaining an EIN is easy and can be done in minutes on the IRS website. You can also file via mail or fax.

It’s free of charge and shouldn’t be paid for unless part of a larger LLC formation package.

Read More: How to get an Employer Identification Number in Ohio