If you’re considering starting a business in Ohio, the time has never been better. In 2021, Ohio broke the state record for new business filings, with over 181,000 new businesses created.
Small businesses are an extremely important part of Ohio’s economy. If you are ready to take the plunge and form your business, you’re in the right place. Read on to learn how to get an LLC in Ohio.
Is an LLC Operating Agreement Required in Ohio?
An operating agreement is not required in the state of Ohio, but it’s highly recommended that you create one when forming your LLC.
Ohio Operating Agreement Laws
Even though Ohio does not require an LLC to create an operating agreement, it is a smart business decision to do so anyway, especially if you are in partnership with others. An operating agreement can protect you in the event of a lawsuit or disagreement between partners. It also ensures that all members agree on the purpose and structure of the LLC.
Anything that is not specified in your operating agreement is governed by the laws in Chapter 1706.08, the Ohio Revised Limited Liability Company Act. While it is not specified what you must include in an operating agreement, the Act does specify that you can’t restrict the rights of members of the LLC.
How Much Does It Cost to Form an LLC in Ohio?
It will cost you $99 to form an LLC in Ohio. If you want to reserve your name for up to 180 days before filing your articles of organization, you can do so for a cost of $39.
How to Form an LLC in Ohio
Once you are ready to form your LLC, it is actually quite simple. Using our step-by-step guide and ready-to-go templates, you can be up and running in no time.
Step 1 – Choose Your Name
Choosing your name can be difficult. It needs to be unique enough to not be confused with an existing business name and it also has to contain one of the following at the end:
- Limited Liability Company
You also cannot 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 or call or email them.
You can also reserve the 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. As long as you file your articles of organization within 180 days, you are the owner of that name.
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 are responsible for sharing these documents with you.
Every LLC registered in Ohio must have a statutory agent. Individuals must be at least 18 years of age, 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 are unavailable to accept legal or other official documents. A registered agent service is one way to simplify this process. For an annual fee, companies will provide the services required of a statutory agent.
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 and your local government to determine if you need a business license to operate your LLC.
Step 4 – File Your Articles of Organization
To file your articles of organization, you’ll need to complete Form 533A if you are a domestic LLC and Form 533B if you are a foreign LLC. You can file online or via mail.
The information that must be included in your articles of organization is:
- 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 these are submitted, 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.
When they are filed, the state will send you a stamped copy of your articles of organization. Be sure to keep this.
Step 5 – Create an LLC Operating Agreement
While you are not required to create one of these by law 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 (including how profits and losses are divided)
- Process for admitting new members and for members who are exiting
- Dissolution procedures
All members of the LLC should review the operating agreement and sign it. You don’t have to file it with the state, but it should be kept with your business records.
Step 6 – Get an EIN
This may not be necessary. If you don’t have any employees, you do not need an employer identification number (EIN). If you have just one employee, though, you’ll need to apply for an EIN with the IRS.
Ohio LLC Operating Agreement Template
If the thought of figuring out an operating agreement seems overwhelming, you can fill in the template below to simplify the process:
LLC Operating Agreeement