Forming a Limited Liability Company (LLC) in Indiana: An Exhaustive 2025 Guide

Table: Indiana LLC Formation – Key Steps and Typical Costs (2025)

In the sections that follow, each tabulated element is explored in greater depth, with practical explanations, legislative context, and best-practices suggestions for full compliance and operational readiness in Indiana.

Formation Steps

Business Name Requirements and Reservation

Naming your Indiana LLC is the first legal step and is regulated under Indiana’s Uniform Business Organizations Code and Title 23-18. Your business name must:

• Contain a Limited Liability Designator: The name must clearly denote the entity as a Limited Liability Company by including “LLC,” “L.L.C.,” or “Limited Liability Company.” For Series LLCs, “LLC-S” or “L.L.C.-S” is required. The preferred format is “LLC,” often placed at the end of the business name.
• Be Distinguishable: The name must not be the same as or deceptively similar to any other entity already on file with the Indiana Secretary of State, disregarding the entity designators for the purpose of uniqueness.
• Exclude Restricted/Prohibited Terms: Words implying association with a state/federal government (e.g., “Bureau,” “Agency”), or specialized terms like “Bank,” “University,” or “Attorney,” require additional regulatory approval and often a licensed person.
• Acceptable Characters: Indiana accepts most letters/numbers and some punctuation; however, IRS rules for EIN applications are stricter, and domain name availability should also be checked.
• Avoid Trademark Issues: Conduct a thorough search for federal trademarks and web domains before proceeding. Using a business name generator or intellectual property attorney is prudent for active businesses.

Registered Agent Requirements

A registered agent is required for all Indiana LLCs. This agent receives official legal correspondence and service of process on behalf of the company. Registered agent requirements are:

• Must Have Indiana Physical Address: The agent must be an Indiana resident or a business entity (with authorization in Indiana) providing a physical address. P.O. boxes are strictly prohibited.
• Available During Business Hours: Must generally be available to receive legal documents during normal business days/hours.
• Who Can Serve: The role can be filled by you, another member, an employee, an attorney, or a professional registered agent service. Many choose a service for privacy and continuity, with costs ranging $80–$300 per year.
• Legal Obligation: Omission or lapse of registered agent can result in administrative dissolution.
• Change of Agent: Requires a Statement of Change of Registered Agent, currently $20 filing fee to the SOS if you amend after initial formation.

Filing the Articles of Organization

This is the formative legal document creating your Indiana LLC. It must be filed with the Secretary of State, Business Services Division, either online (preferred, $95) or by mail ($100). The processing is typically same-day online or 3–5 business days by mail, with no expedited service available.

The Articles must include:

• LLC name (including appropriate designator)
• Principal office address
• Names and addresses of the registered agent
• Statement of LLC duration: “perpetual” or end date (if known)
• Management structure: Indicate if the LLC is “member-managed” or “manager-managed”
• Organizer(s) name, signature, and contact details
• Mailing address and business email for official correspondence

Online filing is accessed via INBiz; paper Form 49459 for mail submission is also available.

Foreign LLCs (formed in another state) must file a Foreign Registration Statement and provide:

• Certificate of Good Standing (from home state, dated within 60 days)
• Registered agent in Indiana
• $105 (online) or $125 (mail) fee.

The Operating Agreement

Indiana does not require an operating agreement to be filed with the state. However, it is strongly recommended for every LLC—especially for multi-member organizations. This agreement governs the relationships among members, profit-sharing, voting, decision-making, dispute resolution, and procedures for transfer of interest, buyouts, or dissolution.

• Customizable: A single-member LLC can have a simple agreement; multi-member LLCs should include capital contributions, voting rights (equal or by percentage), dispute resolution, and buy-sell provisions.
• Not public: Keep with LLC records; courts may request it in litigation.
• Templates: Available for free online, from attorney sources, or CPA services. Signatories (all members/managers) should retain signed copies.
• Statutory Default: Without an agreement, state LLC law dictates default rules, which may not suit your intentions.

Obtaining an Employer Identification Number (EIN)

Obtaining an EIN from the IRS is required for all multi-member LLCs, LLCs with employees, or any entity electing to be taxed as a corporation. Single-member LLCs with no employees may not be required to get an EIN by the IRS, but should do so for banking, licensing, and to minimize identity theft risk.

• No Filing Fee: Apply online (same-day issuance), by fax, or mail via IRS Form SS-4.
• Nonresident Owners: No SSN is required; phone verification may be used for non-U.S. owners.
• Use Cases: Federal and state tax filings; opening business bank accounts; payroll/employment setup.
• Notify IRS if business structure changes (e.g., single- to multi-member).

Initial Licensing and Permitting

Indiana does not require a general business license at the state level. Instead, you must check local city/county boards and industry-specific regulators for required licenses or permits:

• Retail Merchant Certificate (RRMC): Mandatory for any business selling goods or taxable services. Application through the Indiana Department of Revenue (INBiz), $25 per location; certificate must be displayed.
• Professional/Occupational Licenses: Some fields (contractors, medical, legal, childcare, etc.) require special state licensure via the Indiana Professional Licensing Agency or industry-specific regulator.
• Local Business Licenses/Zoning: Cities and counties may require additional permits, zoning board approval, or inspections. Fines/closure can result from noncompliance.

Required Documentation

Domestic LLC

Forming a domestic Indiana LLC requires:

1. Articles of Organization (INBiz online or Form 49459 by mail)
2. Consent from Registered Agent (included in articles or statement)
3. Operating Agreement (internal; not filed with state, but crucial)
4. EIN (IRS-issued)
5. Initial RRMC or sector-specific licenses/permits if applicable

Supporting documentation (proof of address/identity, lease/zoning approval, etc.) may be needed for certain business types or local filings.

Foreign LLC

A foreign LLC (formed outside Indiana) registering to do business in Indiana must provide:

1. Foreign Registration Statement (INBiz online or mail)
2. Certificate of Existence/Good Standing from home state, dated within 60 days
3. Appointment of Indiana registered agent
4. Filing fee ($105 online/$125 mail)
5. Any necessary name change/DBA filing if conflict with Indiana names

Fees and Associated Costs

Summary of Typical Startup & Ongoing Fees

Other costs may arise from local permits/licenses, legal/accounting services, optional formation service fees, domain registration, and trademarking.

Ongoing Compliance Requirements

Biennial (Business Entity) Reports

All Indiana LLCs, domestic and foreign, must file a Business Entity Report every two years with the Secretary of State. This report:

• Due: In the LLC's anniversary month of formation/registration
• Filing: Via INBiz ($32) or mail ($50)
• Content: Updates on principal office, registered agent, management structure, and governing persons
• Penalty: Failure to file triggers administrative dissolution/revocation after a grace period

Automatic reminders are sent via email if one is on file. Timely compliance is essential to maintain “good standing” (vital for contracts, loans, renewals, or legal actions).

Beneficial Ownership (BOI) Reporting

Starting January 1, 2024, under federal law, most LLCs (except exempted “large operating companies” and certain non-profits) must file Beneficial Ownership Information (BOI) with FinCEN. Deadlines:

• Pre-2024 companies: by Jan 1, 2025
• Formed in 2024: within 90 days
• Formed after Jan 1, 2025: within 30 days

Includes names, dates of birth, addresses, SSNs/ITINs, and LLC’s legal and “doing business as” names. Changes require an update within 30 calendar days.

Business Licensing, Permits, and Tax Accounts

• Retailers: RRMC must be valid/renewed if business model changes or if new locations are opened; failure to maintain leads to closure/fines.
• Professional Licenses: Many (health care, contractors, cosmetology, etc.) have annual/biannual renewal.
• Sales, Employment, and Excise Taxes: File appropriate returns/remittances via Indiana Department of Revenue and keep accounts in good standing.
• Property and Local Business Personal Property Tax: Annual filing with local assessor.
• Unemployment Insurance and Withholding: For employers, register with DWD; quarterly filings and remittances as required.

Tax Classification and Obligations

Default Classification:

• Single-member LLCs: Sole proprietorship (pass-through).
• Multi-member LLCs: Partnership (pass-through).

Elections: S Corporation or C Corporation status may be elected via IRS (Form 2553/8832); offers potential tax advantages (e.g., “reasonable salary” to reduce self-employment tax under S Corp election). Corporate-style returns apply if elected (Form IT-20 for Indiana, federal Form 1120).

Taxes:

• Personal Income Tax: Indiana flat personal income tax (3.05% as of 2025) plus locality tax if applicable.
• Corporate Income Tax (if filing as C corp): Indiana’s corporate rate is 4.9%.
• Sales Tax: 7% standard on taxable goods/services, remitted with returns.
• Employer Taxes: Withholding, unemployment, FICA/FUTA.
• County/city-level taxes and specialty taxes (FAB, CIT, etc.) may apply depending on activities/industry.

Note: All multi-member LLCs and any LLC with employees, regardless of single/multi-status, must have an EIN for tax reporting, opening bank accounts, and payroll.

Single-Member vs Multi-Member LLCs

Single-Member LLCs:

• Default taxation as disregarded entity/sole proprietor (reported on owner’s personal return)
• May have special dissolution/transfer issues if member dies (see recent law update below)
• Must still maintain separation of business and personal funds/accounts
• Operating agreement highly recommended to evidence separate entity status

Multi-Member LLCs:

• Default taxation as partnership (IRS Form 1065 + K-1s to members)
• Additional protective/organizational value from well-drafted operating agreements (capital contributions, management, dispute and transfer rules)
• IRS and Indiana recognize as pass-through unless C/S corp status implemented

Adding or Removing Members: Governed by operating agreement or default rule (unanimous consent if unspecified); not reported in public formation records, but IRS/EIN and operating agreement must be updated.

Unique Indiana LLC Features and Comparisons

Unique Indiana Provisions

• No State General Business License: Streamlines entry but requires local diligence.
• Biennial (not annual) Reporting: Lower ongoing compliance cost/frequency than most states.
• Low Filing Fees: Indiana’s $95 (online) organics cost is one of the lowest in the Midwest/nation.
• Support for Series LLCs: Indiana law recognizes series LLCs with special designators (“LLC-S”) and statutory framework for asset partitioning.
• No State Franchise Tax or Annual LLC Tax: Unlike Delaware, California, Illinois, and others.
• Straightforward Dissolution/Reinstatement: Dissolution is quick via SOS (small fee) and entities can be reinstated for up to 5 years if dissolved for administrative noncompliance.

Indiana vs. Other States

• Compared to Illinois: Indiana has lower formation ($95 vs $150) and lower biennial ($31 vs $75 annual) fees, and a simpler reporting regime. Illinois has more taxes and filing complexity.
• Compared to Delaware: Delaware boasts business prestige and court reputation, plus privacy, but is much more expensive and requires annual franchise tax. Indiana is more cost-effective if you live/do business here.
• Compared to New York, California, Texas: Indiana offers substantially lower startup/annual costs and no newspaper publication requirement or high minimum tax.

Recent Legislative Updates (2024–2025)

Key Statutory Changes

2024–2025 Indiana Legislative Session Updates:

• Amendments Affecting Death of a Sole Member (SEA 18): The Business Flexibility Act now specifically addresses what happens when the sole member of an LLC dies, offering an automatic admission process for heirs and new procedures to avoid forced dissolution—a response to past ‘Whitfield’ problems (automatic termination where there’s no member). There is now greater clarity and more robust pathways for succession in single-member LLCs.
• Health Care Entity Mergers & Acquisition Notice Requirements: New notice and reporting standards regarding health sector LLC mergers/acquisitions.
• BOI Reporting (FinCEN): Federal BOI (beneficial owner) reporting rules now apply, with substantial penalties for noncompliance. Initial deadlines apply in 2024–2025 depending on when the LLC was formed.
• Fee Schedule Updates: State updated and streamlined fee schedules ($95 online, $100 mail for formation; $32 online, $50 mail for biennial reports; $30–$50 for dissolution).

For up-to-date changes, consult the IN Secretary of State site or the 2025 “Indiana Laws Governing Business Entities Annotated” (CSC/LexisNexis).

Foreign LLC Registration

If your LLC is formed in another state and will “transact business” in Indiana, you must register as a foreign entity:

Registration Process

• File a Foreign Registration Statement (online or mail with SOS, $105–$125)
• Appoint registered agent in Indiana
• Provide Certificate of Existence/Good Standing from your formation state (dated within 60 days)
• Ensure business name is available in Indiana; use alternate name/DBA if required
• Receive Certificate of Authority—cannot legally do business until this is issued.

Compliance Requirements

• Maintain an active registered agent and a principal office
• File Biennial Business Entity Report
• Pay state/local taxes, obtain any required licenses/permits
• Adhere to all employment, wage, and reporting laws as if a domestic company

Penalties: Up to $10,000 for conducting business without registering; may forfeit right to bring suit in Indiana courts during non-registration.

Licenses, Permits, and Tax Accounts

Licensing/Permitting:

• Mandatory Retail Merchant Certificate (RRMC): For all sales of tangible goods/service providers who collect sales tax.
• City/County Licenses: Local rules apply; research municipal licensing for your industry.
• Professional Licenses: Via state Professional Licensing Agency where applicable.

Tax Accounts:

• Register with Indiana Department of Revenue (DOR) via INBiz for:
  • Sales tax
  • Withholding tax
  • Food/beverage, innkeeper, and specialty taxes
• Unemployment Insurance registration via Dept of Workforce Development if you have employees.

Closing Accounts: Upon LLC dissolution, you must close all tax accounts, cancel RRMC, and obtain tax clearance from DOR.

Dissolution and Withdrawal Procedures

Voluntary Dissolution

Step-by-step:

1. Approve dissolution: Pursuant to operating agreement, or by majority vote if agreement is silent.
2. File Articles of Dissolution: With Secretary of State ($30 online, $50 mail); details must include name, authorization date, and confirmation debts/obligations handled.
3. Notify creditors and claimants: Direct notice and/or publication as needed.
4. Settle debts, liabilities, and taxes: Obtain tax clearance from DOR, file final returns at state/federal level.
5. Distribute remaining assets: According to operating agreement, or state law.
6. Close all business accounts, licenses, permits, and cancel EIN with IRS.
7. Maintain records: For at least three years post-dissolution.

Reinstatement: Possible within 5 years of administrative dissolution by filing with SOS and curing deficiencies.

Foreign LLC Withdrawal

To cease operations in Indiana without dissolving in your home state:

• File Certificate of Withdrawal with the Indiana SOS
• Settle all state taxes, cancel licenses/permits
• Pay any outstanding fees
• Notify creditors, close Indiana operations

Practical Considerations and FAQs

• Can I act as my own Registered Agent? Yes, if you are a resident and have a physical Indiana address.
• Are there nationality/residency restrictions on members? No. Members/managers can be any individual or legal entity, regardless of state or country, as long as they are legally able to contract.
• Do I have to publish a legal notice/newspaper ad? No, Indiana does not have a newspaper publication requirement for LLC formation.
• How do Indiana’s fees and requirements compare nationally? Indiana is among the lowest-cost, most streamlined states for LLCs—particularly favorable versus CA, NY, IL, or DE.

Conclusion: Indiana LLCs in 2025

Establishing an Indiana LLC is a streamlined and affordable process—with some of the lowest formation and biennial maintenance costs in the United States. The steps, while not complex, require thorough completion for compliance, especially in regulated industries or municipalities with specialized permitting. Indiana’s requirement for a registered agent, biennial reporting, and increasing federal transparency via BOI reporting underscore the state’s commitment to business accountability. Recent legislative updates reflect a growing sensitivity to succession in single-member LLCs and evolving economic realities from both a consumer and regulatory perspective.

Whether forming a single or multi-member LLC—or registering from out-of-state—prospective Indiana business owners will benefit from understanding both the advantages (low costs, minimal state-level licensing, no annual franchise tax) and the precise compliance demands (timely filings, business licensing, tax account management) unique to the state. Attending a “Starting a Business” workshop, consulting with an attorney or CPA, and using the state’s INBiz portal will further support a successful and compliant LLC formation and operation in Indiana. With the foundation and ongoing stewardship outlined above, Indiana LLCs can enjoy the robust protection, flexibility, and credibility essential for sustainable business growth.