There’s no question that entrepreneurs are the protectors of the American dream. Almost half of the U.S. workforce is employed by small businesses, and SMEs make up 33 million businesses in the country.
Although Ohio has faced its own challenges with the economy and infrastructure, it ranks very highly in terms of opportunity. The U.S. News & World Report ranks Ohio 11th overall in the U.S. thanks to equality, affordability, and economic opportunity.
A limited liability company (LLC) is one of the best business structures to form in the state. The revised LLC Act that took effect in February 2022 also notes that LLCs no longer need an additional designation for their purpose, be it for profit or nonprofit. If you’re interested in joining the fray but don’t know how to start an LLC in Ohio, you’ll be glad to know that it’s a relatively straightforward process with many steps doable online. Although you can also streamline it using an LLC service, you can actually do much of the formation work yourself. There are a variety of requirements to consider but read on to see the key steps to forming one in the state.
1. Choose Your Name
If you’re going to start an LLC in Ohio, it’s not just about finding the right name for your industry. You will need to meet the state’s law on business names under this structure. For starters, the name you register under must contain “Limited Liability Company” or one of its abbreviations. You must also avoid any profane words, government and bank-related terms, and any words or language using or similar to “trust”. You may use a trade name for branding, but this will require you to register it before use for business purposes.
2. Register Your Statutory Agent
The United States requires every business to have a registered agent, though the specifics are different depending on the state. In Ohio, you must get a statutory agent to be legally eligible to run your business. You can usually do the paperwork for this along with your formation documents.
Take note that Ohio does not allow LLCs to serve as their own agents. That said, the business owner or an employee may be appointed as the statutory agent. This role is largely the same as a registered agent, so responsibilities cover service of process and receiving documents on behalf of the business.
3. File Articles of Organization
The Ohio Secretary of State requires LLCs to file Articles of Organization for a filing fee of $99. This can be done via mail or through the state’s online filing portal. The process is simplified to encourage more entrepreneurs to launch. The state even offers many programs like the Columbus Program to empower small businesses.
With these resources and the simple requirements, you can expect to get your documents processed within a few weeks. The wait can even be expedited if you use a commercial LLC forming service.
4. Get your EIN
It’s a promising time for businesses tapping into the Ohio workforce. Ohio and the Dayton region are experiencing some of the lowest unemployment rates in the state’s history in 2023.
If you’re going to have any employees, then you must first apply for your Employer Identification Number (EIN). This allows the Internal Revenue Service (IRS) to assign a federal tax ID to your business. Even if you opt for partnership or corporate taxation, you will still need to have an EIN. According to the IRS, most new single-member LLCs that are “classified as disregarded entities” also need to get an EIN.
5. Apply for your business account, licenses, and permits
The final major step for starting your Ohio LLC is to get all the proper licenses and permits relevant to your business model. The state doesn’t have a general business license for this type of business structure so the specifics will depend on the nature of your products or services. Make sure you check all required licenses for liquor, health, and other specialties that may apply to your company. It also matters what city you plan to conduct business in, as Ohio sees different permits depending on the local government.
You will also need to make a business account. In order to maximize the liability protection that comes with an LLC, you must create a dedicated account that will be for the sole use of the business. This way, any debts or obligations will be easily distinguishable, and you don’t risk mixing it with your personal assets.
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