If you’re starting an LLC in Ohio, it is essential that you understand its requirements. This article covers everything from choosing a name and selecting an EIN provider, to hiring registered agents and getting EINs.
The Ohio LLC Code grants members contractual freedom to tailor contributions, rights and duties according to individual needs and is designed for perpetual existence of LLCs.
Articles of organization
The articles of organization are state-level documents that officially establish your LLC. They typically provide basic details about its name and purpose before becoming public records once filed with your state. The state also mandates filing an operating agreement that outlines how your company will run as well as how disputes between members will be addressed.
Ohio Business Central allows you to download articles of organization by signing in with your business account and signing your documents off as submitted. When your documents have been approved, an email from the Secretary of State with a link will be sent out with instructions for viewing them online or can be found under “Approved Filings” within your account.
Filing Articles of Organization in Ohio requires paying a filing fee that depends on what kind of business is being established – check with the Secretary of State’s office for more information on this matter. Furthermore, an Employer Identification Number will likely be necessary if your LLC will employ employees or open bank accounts.
Operating agreement
An LLC operating agreement details how an LLC will run and is a legal document which sets forth its members’ rights and responsibilities, financial matters management processes and company dissolution processes. While not mandatory by state law, an operating agreement can help minimize disputes while protecting individual’s assets from legal liabilities.
Chapter 1706 makes it clear that, with some exceptions, an LLC’s operating agreement should govern its internal affairs; otherwise, the Revised LLC Act serves as its default operating agreement – any provisions not addressed and overridden in an LLC’s operating agreement will automatically apply to it.
An operating agreement can also define management terms, such as who has authority to sue or be sued, enter into contracts, transfer assets into series, grant liens and security interests, manage operations of each series and manage its investment objectives. However, an operating agreement should not limit activities of any series nor restrict investment objectives.
Registered agent
An LLC is typically created to shield its members’ personal assets from debts and liabilities of their business, as well as provide tax advantages similar to corporations while remaining flexible enough for small enterprises. Furthermore, an LLC also provides personal liability protection that may not exist elsewhere.
Selecting a registered agent is one of the key components to creating an LLC in Ohio, where all business entities must maintain one with an address in state (no post office box) tasked with receiving legal mail and serving legal process on behalf of their entity. This person or company serves as its legal representative by receiving legal mail and service of process on its behalf.
Although business owners can act as their own registered agent, this is often not recommended due to potential security risks such as missing legal documents and court cases. Hiring a reliable commercial registered agent service such as Northwest Registered Agent is more secure and ensures that your documents will reach you when due.
Taxes
Tax obligations of Delaware LLCs depend on their type of business activity; generally speaking, standard LLCs pay an annual franchise tax of $300; other businesses may incur state and federal income tax liabilities as well. Furthermore, most municipalities require LLCs to acquire a local business license prior to operating legally in their community.
As part of any multi-member LLC, an operating agreement should be drawn up in order to clarify duties and responsibilities among its members. While not mandated by Ohio law, an operating agreement can help safeguard against liability by avoiding disputes among them.
Many companies choose Delaware due to its favorable tax laws, with foreign qualification requiring an application fee and Certificate of Good Standing from the Secretary of State. Furthermore, companies must designate an agent in Ohio who is capable of receiving service of process and other legal documents on behalf of their company.
