Many Ohio entrepreneurs choose to form a limited liability company (LLC) because of the many benefits of this business entity type. An LLC provides liability protection, for instance, so your assets are not at risk if your business is sued or cannot pay debts.
An LLC is a “pass-through entity” for tax purposes, meaning that the LLC itself is not taxed. Instead, income passes through the business to the LLC owners or members, who report it on their tax returns. LLCs also offer flexibility in terms of management and taxation.
Creating an LLC is relatively straightforward, but ensuring it’s done correctly is crucial to getting your Ohio business on the right foot. The most critical step is filing articles of organization.
What are Articles of Organization for an LLC?
The articles of organization is a legal document filed with Ohio’s Secretary of State to form an LLC officially. It will include your business name, address, statutory agent information, and more, as detailed below.
First, Select a Statutory Agent for Your Ohio LLC
Ohio requires LLCs to appoint a statutory agent, a person or company authorized to accept and respond to official business correspondence, such as legal, tax, or financial documents.
The statutory agent ensures all required notices and documents are received. In Ohio, the statutory agent can be an LLC member, individual, or entity that meets state requirements. In Ohio, a statutory agent must:
- Be 18 years or older
- Have a physical address in the state
- Be available during regular business hours
- Be registered to operate in the state, if it’s a business
Many business owners hire a statutory agent service to ensure their LLC stays fully compliant and for convenience.
If you choose to be your statutory agent, you must be at your statutory agent’s address for all business hours. A statutory agent service allows you to be wherever you need to be to run and grow your business.
How to Submit Articles of Organization in Ohio
To start, visit the Secretary of State’s website to access the organization’s articles online. Next, click Submit a Business Filing and register to create an account.
In Ohio, the articles of organization require the following information:
- LLC name
- Effective date
- Business purpose
- Statutory agent information
Once your account has been created, click File a New Business or Register a Name from the dashboard. Then, choose limited liability company from the drop-down menu. You will also be prompted to select a processing time, with options ranging from regular to various levels of expedited processing.
You’ll then move through a series of screens where you can enter all of the required business information. Once you’ve completed each step, you’ll have a chance to review your entries and make any necessary changes before confirmation and payment.
The filing fee is $99. You should receive confirmation within minutes if you file online. You can also submit a paper form if you wish to file by mail. But turnaround time is up to seven days.
Some entrepreneurs hire an LLC formation service like ZenBusiness to handle this step, saving time and ensuring the process is done correctly.
Draft an Operating Agreement
Ohio does not require an operating agreement, but it’s a crucial document that defines members’ ownership percentages and profit allocations. Those are the two key elements, but it should also include the following:
- Each member’s rights and responsibilities
- Management structure and roles
- Voting rights of each member
- Rules for meetings and voting
- What happens when a member sells their interest, becomes disabled, or dies
You can find operating agreement templates online, but it’s best to have them drawn up or reviewed by an attorney. The language of an operating agreement is crucial and can often help determine how member disputes will be resolved. Here you can obtain a free operating agreement template for your Ohio LLC.
Contact Information for the Ohio Secretary of State
Ohio Secretary of State Website
Client Service Center
22 North Fourth Street
(Enter from Fourth Street ONLY)
Columbus, Ohio 43215
There’s only one way to create an LLC in Ohio: successfully filing articles of organization. If you make any mistakes, you’ll likely have to refile, so be sure to do it right the first time and set your business up for serious success!