There are a number of different kinds of business entities, but one of the most popular types is a limited liability company (LLC). The LLC is a unique type of business form in that it combines aspects of both a corporation and a partnership.
You might decide to form an LLC to protect yourself or your assets from being taken if your company is sued, or to get tax benefits that are better than the ones for a corporation. Before creating an LLC for your business, you should know all the regulations in Ohio so that you are not making any mistakes when setting up your business.
In order to form an LLC in Ohio, you will need to appoint a statutory agent. This is the person or other business that can be served important papers or legal notices for the LLC. You will also need to create a business name that is not currently being used by another registered company in the state.
The name of the company must include one of the following terms or phrases: “LLC”, “L.L.C”, “ltd.”, “ltd”, “limited”, or “limited liability company.” Also, Ohio state law requires one person to fill out and sign the paperwork, so there must be at least one member or manager listed.
Ohio permits you to file the paperwork for registering your LLC online or via the mail. Domestic LLCs, are LLCs created in Ohio; for these, you will need to fill out Articles of Organization. You must include the name of the LLC, the name of the member(s), the name and address of the statutory agent, and all required signatures on this form. You also have the option to include the day when you want to start or end the LLC, as well as the purpose of the business.
Foreign LLCs, are LLCs that are created outside the state, and want to register with Ohio. For these, you will have to complete an Application for Registration, in which they will need to include their original name and any other name they may use in Ohio.
It also requires the company address, the name and address of the statutory agent, and all required signatures. The paperwork for an LLC can sometimes be complex; it may be necessary to work with a business attorney, who can help ensure that all items are properly completed and that they are submitted before the relevant deadlines.
Unlike the majority of states, Ohio does not require LLCs to file an annual report. Another benefit offered by Ohio state business laws is the ability to expedite your filing for an LLC for a fee. If you choose to pay the fee to have your filing expedited, it can be filed and processed in a little as 4 hours.
Besides these Ohio-specific benefits, LLCs are also associated with a number of general benefits not often found in other types of business structures. For instance, “limited liability” means that the LLC members are shielded from personal liability for any debts or violations of the company.
If the company goes into debt, creditors are not allowed to access the personal resources and finances of LLC members to satisfy the debt. However, the LLC members can still be held liable for issues caused by their own negligence or violations.
Also, LLCs may be associated with some of the tax benefits normally reserved for business partnerships. Thus, it can sometimes be simpler to manage taxes for an LLC compared to other business forms that are more complex.
Ohio does impose a Commercial Activity Tax that most LLCs have to pay either quarterly or annually. If the company’s gross receipts are between $150,000 to $1 million you have to pay at least $150. For businesses that made over $1 million, they have to pay a rate of .26% on the gross receipts.
Lastly, LLCs in general can sometimes have other disadvantages. For example, members of an LLC may often be less able to exercise control over the business. Their ability to participate in important decision-making process may be more restricted when compared to other business structures like a sole proprietorship. Thus, proper procedures should always be exercised in order to avoid legal liability or financial losses for the organization.
It is highly important that you contact an Ohio business lawyer if you need help setting up your LLC. When you are starting a business and want to do it in a formal way, such as an LLC, you should speak with an expert who has experience with forming LLCs in Ohio. Your attorney can assist you with the paperwork and can also represent you in a court of law if you a legal dispute or lawsuit arises.