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What are the steps required to establish a Limited Liability Company (LLC) in Ohio, and what are the tax implications?

Picture of Chris Battis By   ·  1 minute read

The steps required to establish a Limited Liability Company (LLC) in Ohio are as follows:

  1. Choose a name for your LLC: The name you choose should not be the same as any other LLC or corporation registered in Ohio. You can check if the name is available by using the Ohio Secretary of State's business search feature.
  2. File Articles of Organization with the Ohio Secretary of State: You can file online or by mail. The Articles of Organization should include the name and address of the LLC, the name and address of the registered agent, and the names and addresses of the LLC's members.
  3. Obtain necessary licenses: Depending on the nature of your business, you may need to obtain additional licenses or permits from state or local agencies.
  4. Draft an operating agreement: Although not required by law, an operating agreement is a written document that outlines the rights and responsibilities of the LLC's members and managers. It's highly recommended to establish an operating agreement to establish the rules and regulations and the distribution of profits and losses.
  5. Obtain an Employer Identification Number (EIN): An EIN is a federal tax identification number issued by the Internal Revenue Service. It is used to identify your business for tax and banking purposes.

The tax implications of starting an LLC in Ohio includes the following:

  1. Income Taxes: Ohio LLCs are classified as pass-through entities for federal and state income tax purposes. The LLC itself does not pay income tax. Instead, the income is passed through to the LLC's members, who report their share of the income on their personal tax returns.
  2. Sales Tax: If the LLC sells goods or services that are subject to Ohio sales tax, it must register with the Ohio Department of Taxation and collect and remit sales tax on those sales.
  3. Unemployment Taxes: Ohio LLCs with employees must register with the Ohio Department of Job and Family Services and pay state unemployment taxes.

Overall, it is advisable to consult with a licensed attorney to ensure compliance with all necessary regulations and to ensure all legal measures are taken into consideration before establishing an LLC in Ohio.