An Ohio LLC operating agreement is a legal document that outlines an LLC’s operation rules and ownership details. This document can inform members on topics like capital contributions and member responsibilities.
All LLC company members must sign an LLC operating agreement for it to have validity. Instead of filing with an authoritative body, members can keep copies of an operating agreement in their personal records.
Is an LLC Operating Agreement Required in Ohio?
No, an operating agreement is not required in Ohio, but creating one can help you organize your business.
The Ohio Revised Limited Liability Company Act in Chapter 1706 of the Ohio Revised Code contains laws dictating LLCs’ operation.
If you choose to create an operating agreement, you can
- § 1706.08 (Limited liability company operating agreements)
- § 1706.081 (Enforcement of operating agreements)
- § 1706.082 (Operating agreement amendment, provision of rights, obligations)
Costs and Fees
Whether you’re forming a domestic or foreign LLC in Ohio, you’ll have to pay a $99 filing fee for the articles of organization. Other fees to expect include:
- A full force and erect certificate (a certificate of good standing): $5
- Register your business under a different name: $39
- Annual report fee: No annual report fee in Ohio
How to Form an LLC in Ohio
Here’s a list of steps to help you form an LLC in Ohio:
Step 1 – Choose Your Name
Choosing your name can be difficult. It needs to be unique enough from existing business names, and it also has to contain one of the following at the end:
- Limited Liability Company
You also can’t use words like “bank” or “trust” unless you have specific state permission, and you can’t use titles like attorney or doctor unless you (or another owner) hold those professional licenses.
When you decide on a name, check with the Secretary of State to see if it is taken already. You can use their online search tool to conduct research.
You can also reserve a name for up to 180 days while you prepare your articles of organization. To reserve it, fill out a name reservation form online or by mail and pay a $39 processing fee.
Step 2 – Appoint a Statutory Agent
A statutory agent (often called a registered agent in other states) is a company or individual who can accept official documents and legal mail on your behalf. They’re responsible for sharing these documents with you.
Every LLC registered in Ohio must have a statutory agent. Individuals must be at least 18 years old, be an Ohio resident, and be available to accept documents during normal business hours.
A company can act as your statutory agent if they have a business address in Ohio.
You can designate yourself or another owner as the statutory agent, but this might be problematic if you cannot accept legal or other official documents. A registered agent service is one way to simplify this process.
Step 3 – Determine if You Need a Business License
Certain types of companies require a business license to operate. For example, if you are selling tangible items, you’ll need a vendor’s license. Check with the Secretary of State to determine if you need a business license to operate your LLC.
Step 4 – File Your Articles of Organization
- The name of the LLC
- The effective date of the LLC (optional and cannot be more than 90 days after filing the articles of organization)
- Name and signature of the statutory agent
- Contact information for the statutory agent
- Name and signature of the person completing the articles of organization
Once you submit your articles of organization, it will take the state three to seven business days to process and file them. You can request expedited processing and filing for an additional fee.
After you receive approval, the state will send you a stamped copy of your articles of organization. Ensure to retain this copy for your records.
Step 5 – Create an LLC Operating Agreement
While you’re not required to create one of these documents in Ohio, you should consider it. This written contract will protect you, your partners, and your business.
The information in an operating agreement includes:
- The purpose of the LLC
- Names and contact information of all members of the LLC
- Ownership percentages of each member
- The process for admitting new members and for members who are exiting
- Dissolution procedures
- Operating procedures
Step 6 – Get an EIN
An employer identification number (EIN) may not be necessary. For example, you won’t need one if you don’t have any employees. If you have at least one employee, you’ll need to apply for an EIN with the IRS.
This identifier can also help you take out loans on behalf of your company.