Comprehensive Guide to Forming a Limited Liability Company (LLC) in Ohio

1. Choose and Secure an LLC Name

Ohio Naming Rules

• Be unique and distinguishable from all other registered business entities in the state.
• Include the words “Limited Liability Company,” or an approved abbreviation (LLC, L.L.C., Limited, Ltd., ltd.).
• Not include words implying government affiliation (“FBI,” “Treasury”), profanity, or language that misleads about the business’s scope.
• Require special approval for certain terms: e.g., “bank,” “trust,” “insurance,” or professional designations like “engineer” or “attorney”.

Distinguishability:

Ohio’s Secretary of State employs strict criteria. Changing articles, conjunctions, punctuation, tenses, or merely the type of entity (“LLC” v. “Co.”) is NOT enough—you need a fresh, clearly distinct name.

Name Search

Use Ohio’s Business Entity Search before registering to confirm your name is available. This check is free and can be performed instantly online.

Name Reservation

If you aren’t ready to file immediately, you can reserve your chosen name for 180 days by submitting Form 534B with a $39 fee. Expedited service (from two days down to four hours) is available for additional fees ($100–$300).

Fictitious Names and DBAs

You may also register a fictitious name (DBA—“doing business as”). Note that fictitious names do not confer exclusivity or legal protection, and do not need to be distinguishable. However, all trade names must be distinguishable and comply with name rules.

2. Appoint a Registered (Statutory) Agent

Legal Requirement and Options

Ohio requires every LLC to maintain a registered (also known as “statutory” or “resident”) agent. The agent’s role is to accept legal documents and official correspondence. You have three options:

• Serve as your own agent (must be an Ohio resident);
• Designate a friend or family member (must be an Ohio resident over 18);
• Hire a registered agent service (recommended for privacy or nonresidents).

Requirements:

• Agent must have a physical address in Ohio (street address required; a PO Box may be used only if accompanied by a rural route).
• Must be available during regular business hours to receive service of process and state/court communications.
• Agent’s name and address become public record.

Pros and Cons: Professional Service vs. DIY

• Privacy: Using a registered agent service keeps your address private. If you serve as your own agent, your address becomes publicly searchable.
• Reliability: Professional services handle mail scanning, compliance reminders, and are less likely to miss critical legal papers, avoiding the risk of administrative dissolution.
• Cost: Services typically charge $100–$300/year (often with first-year specials), but acting as your own agent is free beyond formation filing.

3. File Articles of Organization (Form 610)

This is the document that officially creates your Ohio LLC.

Information Required

• Exact LLC name (including proper suffix)
• Effective date (optional; default is the date of state approval; can be up to 90 days delayed)
• Purpose (optional): Most LLCs leave this field blank, as the default allows any lawful business activity.
• Registered agent’s name and address
• Organizer(s) name and signature; at least one required
• Statement if the company will have one or more series (for Series LLCs, uncommon)
• Acceptance of statutory agent appointment (agent must sign).

Filing Options, Fees, and Processing Times

• Fee: $99 (standard, nonrefundable), payable to “Ohio Secretary of State”.
• Submission: Can be filed online (Ohio Business Central), by mail, or delivered in-person.
• Processing Times:
  • Regular: 3–7 business days (often faster for online filings; sometimes as little as 1 business day)
  • Expedited: $100 (2 days), $200 (1 day, in person), $300 (4 hours, in person by 1:00pm only).

4. Create an LLC Operating Agreement

Legal Requirement

Ohio does not require LLCs to create or file an operating agreement, but its use is highly recommended for all LLCs (both single- and multi-member). It is an internal document—do not file with the Secretary of State.

Purpose & Contents

• Specifies ownership shares, internal management structure (member or manager-managed), voting procedures, profit/loss allocation, meetings, dispute resolution, and dissolution procedures.
• Provides critical evidence (in court or with banks) that the company is operating as a legal separate entity, protecting the “corporate veil” for liability purposes.
• Banks, investors, and potential partners typically demand to see an operating agreement before extending loans or entering into significant agreements.

Templates & Legal Review

Free or low-cost templates for both single- and multi-member LLCs are widely available—use one as a starting point but consider a lawyer’s review for complex structures or high-value ventures. Must be kept with company records and updated as the LLC’s structure or ownership changes.

5. Obtain a Federal Employer Identification Number (EIN)

What is an EIN?

An EIN is a nine-digit tax ID, issued by the IRS, that identifies your business for federal taxation and allows LLCs to hire employees, open business bank accounts, and apply for certain licenses.

Who Needs an EIN?

• All multi-member LLCs
• Any LLC with employees, or that plans to file certain federal tax forms
• Single-member LLCs often apply for an EIN for privacy (to avoid using their SSN) and for banking or vendor registration

How to Apply

• Free and fast via IRS website (for U.S. residents with SSN/ITIN), typically takes minutes.
• Non-U.S. applicants: Apply by fax or mail using IRS Form SS-4; no SSN/ITIN required, but the process may take several days to weeks.
• Only apply for an EIN after your LLC is approved.

6. Register for State Taxes and Obtain Required Ohio Tax Licenses

Sales Tax/Vendor’s License

• If your LLC sells tangible goods or taxable services, you must collect sales tax and file regular returns.
• Obtain a vendor’s license ($25) through your county auditor or the Ohio Business Gateway.
• Different licenses exist for regular businesses and transient vendors (those without a fixed business location).

Employer Withholding and Unemployment Taxes

If your LLC has employees, register with the Ohio Department of Taxation for employer withholding tax and with the Ohio Department of Job & Family Services for unemployment insurance. Reporting new hires is required as well via the Ohio New Hire Reporting Center.

Commercial Activity Tax (CAT)

Applies if gross receipts in Ohio are above the annual threshold.

• 2024: $3 million annual gross receipts
• 2025: $6 million annual gross receipts

Businesses under these thresholds are exempt; if you exceed, you must register via the Ohio Business Gateway, file, and pay periodically.

Additional State Registrations

Certain industries or activities (e.g., restaurants, construction, health care, insurance) require specialized state-level permits or regulatory approvals. See the Ohio licenses & permits list to determine your obligations.

7. Obtain Local Permits, Zoning Clearance, and Licenses

Ohio does not require a general state business license, but many counties, townships, and cities do for local operations. Your municipal or county government may require:

• General or specific industry licenses
• Zoning clearance or special use permits
• Health permits (restaurants, childcare, salons, etc.)
• Home occupation permits (if running from residential property)
• Fire/safety inspections

8. Open a Business Bank Account

To maintain liability protection, you must keep personal finances and LLC finances completely separate.

• Most banks will require: Articles of Organization, EIN, Operating Agreement, and possibly a business license.
• Using a dedicated account also streamlines tax preparation and improves professional credibility.

9. Consider Additional Compliance Steps

Report Beneficial Ownership

Starting in 2024, many LLCs must report information about beneficial owners to FinCEN for anti-money laundering purposes. FinCEN’s BOI Reporting rules apply if your LLC is not exempt (e.g., most small, privately held businesses).

Workers’ Compensation, Insurance, and Other Filings

• Workers’ compensation insurance is required for Ohio employers (Bureau of Workers’ Compensation).
• Consider general liability or professional liability insurance, business interruption, and property insurance for risk mitigation.