Company formation laws in Ohio

Table of contents

LLC Formation in Ohio

One or more organizers can form a Limited Liability Company or LLC in Ohio. There are no restrictions on age or residence for formation of an Ohio LLC. The period of duration of an LLC is perpetual in Ohio, unless a limitation is placed on the company’s existence or it’s dissolved or terminated.

Steps for an Ohio LLC formation

Certain steps have to followed for setting up a Limited Liability Company in Ohio as indicated below:

  1. Choosing the business name:
  2. The business name should include the term limited liability company or its abbreviated forms like "LLC," "L.L.C.," "limited," "ltd.," or "ltd". Besides, a business name should be unique and not be similar to other names on the file of Ohio’s Secretary of State (SOS). The Secretary of State’s website lets you check the availability of the business names before you register.

  3. Filing articles of organization with the Secretary of State:
  4. The SOS website includes a simple form, which you can fill for preparing and filing the articles of the organization. Note that the filing must include the signature of company's registered agent for service of process in the Original Appointment of Agent section. The filing fee for a LLC is $125.

  5. Negotiating and executing an operating agreement:
  6. The state laws in Ohio doesn’t make it mandatory to make an operating agreement. But, it’s highly recommended to prepare an executing one. It typically includes the details of how the LLC will function, the allocation of profits and losses etc.

  7. Obtaining local license:
  8. The local or city governments may require you to have basic business license, or tax-registration certificate. For additional information regarding the same, you need to contact the local office of the concerned authority or the county or city clerk’s office.

  9. Determining the tax and other regulatory obligations:
  10. You’ll need an Employee Identification Number (EIN) initially, which you can acquire online, and without any filing fee.
    You’ll need to register for the Ohio Employment Taxes, if you have employee (s) in the state. Apart from that, you’ll need to get the worker’s compensation coverage, get in contact with the IRS for employee hiring or for filing other information returns.

  11. Opening a bank account:
  12. You’ll need to set up a separate bank account for maintaining the business finances. For that you’ll need the EIN, a copy of the articles of the organization, and a resolution identifying the authorized signers who’re not named in the articles.

  13. Other necessary requirements:
  14. There are some state specific requirements that an Ohio LLC may require. The documents are enlisted in Ohio Rev. Code § 1705.28.

Formation of Non-profit Corporation in Ohio

Most non-profit organizations are formed for religious, scientific, charitable, educational or literary purposes, and are 501(c)(3) tax-exempt organizations. To become eligible for the federal and state tax exemptions, initially you’ll need to set up an Ohio corporation and then apply for the tax-free status from the IRS and State of Ohio.

Steps for an Ohio Non-profit Corporation formation

The Ohio state requires you to follow certain steps when forming a nonprofit corporation.

  1. Choosing a name for the non-profit corporation:
  2. You must choose a name for your non-profit corporation, keeping in mind that it should not be similar to any other corporation names filed with the Secretary of the State. For that reason, you must check for the name availability.

  3. Forming the Board of Directors:
  4. Ohio requires that a non-profit corporation must have at least three directors. But, if the members of the organization are less than three, the number of directors can be same as the number of members. However, it’s not necessary that the directors have to reside in Ohio, or have to be of certain age.

  5. Incorporating the Nonprofit organization:
  6. Specific steps need to be followed for incorporating a nonprofit organization as outlined below:

  • Filing articles of incorporation with the SOS
  • Creating bylaws
  • Setting up an organizational meeting
  • Creating records book

  • Acquiring the EIN:
  • You’ll need to get an Employee Identification Number (EIN) from the IRS for hiring employees to work for your non-profit organization. Apart from that, you’ll also need to inform the State of Ohio for the same.

  • Registration with the State Offices:
  • You’ll also need to register with the Attorney General and the Department of Revenue in Ohio for additional formalities, depending on the activities you intend to engage in.

  • Applying for the tax exemptions:
  • After undergoing through the whole set-up and incorporating the nonprofit corporation, you’ll then need to apply for the tax exemptions from the federal, state and local authorities.

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