A limited liability company, or LLC, is a popular business structure in Ohio. The process for forming an LLC is governed by state law, which requires certain filings with the Secretary of State. Although there is basically only one way to form an LLC, there are options you can take in organizing your business that can simplify the creation of the company. This includes using forms available through the SOS website and utilizing other online resources.
Choosing a Name
The first step to forming an LLC in Ohio is selecting a name for your business. State law requires that the name not be the same as or deceptively similar to that of another company operating in the state. The name must include the words "Limited Liability Company" or an abbreviation, such as "LLC" or "Ltd." The Ohio Secretary of State (SOS) offers a searchable database through its website, which allows you to look up potential names to see if they are currently in use. This feature can eliminate the need to contact the SOS by telephone or mail, making the process easy and time-efficient.
Articles of Organization
The next step is to draft and file Articles of Organization with the SOS and pay a filing fee. The articles act like a constitution for your business and must contain certain information, such as your business name and the name and address of your registered agent. Fill-in-the-blank forms are available from the SOS website, which simplifies the process and ensures that your articles contain all of the information required by law. Although you cannot submit the documents online, you may hand-deliver them to the SOS, or send them by overnight mail to help speed up the process.
After filing the articles, consider drafting an operating agreement. An operating agreement is a written contract between the members of an LLC regarding how the business is to function and how disputes are to be resolved. This step is not required by Ohio law, so you may decide to skip this step, or keep the agreement short and simple. An example might be just drafting the agreement to specify each member's percentage of ownership interest in the business. As an alternative, you might save time by obtaining an agreement from an online legal document provider. Additional issues that might be addressed in operating agreements include the rules for voting, the procedures for calling meetings, and the process for admitting or withdrawing members.
Licenses and Taxes
Although the process for setting up an LLC can be simplified in Ohio, certain state and local permits or licenses may need to be obtained before you begin operations. For example, Ohio requires all mortuaries to obtain a funeral home licence at least 60 days before conducting business. In addition, if you have any employees, you will need to register for Ohio employment taxes through the state's website, and request a federal Employer Identification Number (EIN) from the Internal Revenue Service. The ease of applying for permits and licenses will vary depending on the nature of your business.