Our content is reader-supported. We may earn a commission if you make a purchase through one of our links.
Last Updated on October 3, 2024 by Dr. Gabriel O’Neill, Esq.
Starting the journey to form an LLC in Ohio requires more than just a great idea—it’s important to grasp the costs involved. Though the expenses may seem overwhelming at first, don’t worry. This article breaks down the costs of forming an LLC in Ohio, offering tips to help you navigate the process while keeping your budget in check.
We’ll also highlight helpful tools like ZenBusiness, which provides affordable LLC services. Let’s dive into the financial side of turning your business dreams into reality in the Buckeye State.
>> Get Started With ZenBusiness >>
What Is the Cost of Forming an LLC in Ohio?
The primary cost to form an LLC in Ohio is the $99 charge, which covers the online submission of your LLC’s Articles of Organization through the Ohio Secretary of State’s platform.
Here’s the LLC Cost Guide for all US States:
Ohio Foreign LLC Formation Costs
Should you possess an existing LLC that’s registered in a different state and wish to extend your business operations to Ohio, it’s necessary to enroll your LLC as a foreign entity within Ohio.
The fee associated with the registration of a foreign LLC in Ohio amounts to $99. To achieve this, you can complete the process by submitting the online or mail-based “Registration of a Foreign Limited Liability Company” form (Form 617).
Annual Cost for LLCs in Ohio
When establishing and running a Limited Liability Company (LLC) in Ohio, it’s crucial to understand the continuous expenses associated with upholding the LLC’s legal standing and compliance. This awareness is essential for effective budgeting and ensuring the LLC’s financial health.
The main ongoing charges for an Ohio LLC encompass the Commercial Activity Tax (CAT), an annual tax linked to the LLC’s gross receipts, with the exact CAT amount contingent on commercial activity and receipts, having a minimum of $150. If the LLC employs a trade name, a $25 filing fee is requisite for its renewal every five years.
Ohio mandates an LLC to have a statutory agent responsible for accepting legal documents and official communication; the fees vary depending on the chosen agent’s identity (e.g., oneself, another individual, a registered agent service, etc.).
How Much Does It Cost to Start an LLC in Ohio With the Best LLC Service?
ZenBusiness LLC Formation Cost
The initial expense for filing an LLC in Ohio is $99, with potential variations based on additional services. Regarding processing times, the standard period is estimated at 2 to 3 weeks. Expedited processing options are also available, with a 4 to 6-day option for $50 or a more rapid 1 to 2-day option for $100.
ZenBusiness presents a range of three pricing tiers for their business formation services: Starter, Pro, and Premium.
- Starter package: This is suitable for fundamental business formation requirements and is priced at $0, alongside applicable state fees.
- Pro plan: The, priced at $199 in addition to state fees, encompasses supplementary features like expedited filing and registered agent service.
- Premium plan: The most comprehensive option, encompasses all Pro plan features along with unlimited Worry-Free Compliance, aiding businesses in adhering to state and federal regulations. This comprehensive plan is priced at $349 plus state fees.
Furthermore, any plan acquisition from ZenBusiness entitles customers to a complimentary year of Worry-Free Compliance.
>> Get Expert Assistance From ZenBusiness >>
Additional Costs When Starting an LLC in Ohio
Ohio LLC Name Costs
Selecting a name for your Limited Liability Company (LLC) does not incur any charges. The approval of your chosen Ohio LLC name is included without any additional fees when your Articles of Organization filing is sanctioned by the state.
Despite online information suggesting the necessity of LLC Name Reservations, this isn’t the case in the majority of states. A Name Reservation is typically not obligatory for LLC formation.
However, if desired, you can secure your chosen name for a span of 180 days before actual LLC formation. This can be achieved by submitting a Name Reservation / Transfer / Cancellation form (Form 534B) along with a payment of $39.
Ohio Registered Agent Costs
The Ohio registered agent Fee can either be $0 or $125 per year. Ohio’s regulations stipulate that designating a registered agent (also known as a Statutory Agent) is obligatory when establishing your LLC.
An Ohio registered agent, whether an individual or a company, assumes the responsibility of receiving legal documents and state notifications on behalf of your LLC. This agent must possess a physical address within the state and should generally be accessible during standard business hours.
No additional charges apply if you opt to serve as your own registered agent or if someone you are acquainted with fulfills the role of your LLC’s Statutory Agent.
Nonetheless, you have the alternative of employing a registered agent service, which typically comes at an annual cost ranging from $100 to $300. These Statutory Agent service providers often extend other beneficial business services and can also safeguard your confidentiality.
Engaging a registered agent service is advisable under the following circumstances:
- You lack an address within the state (Ohio regulations mandate a Statutory Agent to possess a physical address in the state)
- You wish to shield your address from public disclosure (depending on the chosen company, you might be able to utilize their address to maintain your privacy)
Ohio Operating Agreement Costs
The fee for the LLC Operating Agreement is waived ($0).
This agreement serves as a written contract among the LLC Members in Ohio, outlining ownership, management, and profit distribution details. Both Single-Member and Multi-Member LLCs are advised to create and retain this agreement, providing a copy to each Member. Other platforms charge between $50 and $200 for an equivalent Ohio LLC Operating Agreement.
Ohio EIN Cost
The fee for obtaining an LLC EIN Number is waived ($0).
An EIN, or Employer Identification Number (also known as FEIN, Federal Employer Identification Number), serves various purposes, such as filing income taxes, setting up an LLC bank account, and hiring employees if needed. While numerous platforms impose service charges for acquiring an EIN for your LLC, you have the option to obtain it free of charge.
The process of online filing through the Internal Revenue Service (IRS) is quick and can be completed within minutes.
Ohio LLC Taxes
The range of annual costs for Ohio LLC owners varies due to the diverse types of taxes they need to cover. These taxes include:
Federal Income Taxes
The Internal Revenue Service (IRS) offers different tax treatment options for Limited Liability Companies (LLCs). For Single-Member LLCs, the default status designates them as Disregarded Entities, requiring the owner to file the federal income tax return and pay taxes.
The tax method depends on the owner’s identity: individual ownership results in taxation similar to a Sole Proprietorship, while corporate ownership subjects the LLC to branch/division taxation.
For Multi-Member LLCs, the default status treats them as Partnerships. The LLC files a 1065 Partnership Return and provides LLC owners with a Schedule K-1 detailing each owner’s share of profits. Owners then report this income on their personal tax returns (Form 1040).
Husband and Wife LLC Taxes
In certain states, a husband and wife LLC can choose to be taxed as a Single-Member LLC (Qualified Joint Venture) rather than a Multi-Member LLC. This option is available in community property states but not in others like Ohio.
Electing Corporate Taxation
LLCs can opt for corporate taxation, deviating from the default statuses. Corporate taxation includes two types: S-Corporation and C-Corporation.
An LLC can file Form 2553 to be taxed as an S-Corporation, providing potential tax benefits for established businesses. Alternatively, Form 8832 allows an LLC to be taxed as a C-Corporation, which is less common and primarily beneficial for larger employers.
Ohio State Income Tax
For Ohio LLCs, Single-Member LLCs typically have the owner include the LLC’s profits or losses in their personal state-level return. Multi-member LLCs might need to file a state-level Partnership return alongside individual state-level returns for owners.
Pass-through Entity Tax
Ohio offers the Pass-through Entity Tax (PTE) option, allowing LLCs to be taxed at the entity level. This choice can lead to tax savings in the State and Local Taxes (SALT) section of federal income taxes.
Local Income & Sales Tax
LLCs in Ohio may have local tax obligations to their municipalities. Hiring an accountant is recommended for accurate local income tax preparation.
Ohio Sales Tax
Ohio-based LLCs selling products to consumers may be required to collect sales tax and obtain a Seller’s Permit from the Ohio Department of Taxation. This permit enables the collection of sales tax on retail sales within the state.
Ohio LLC Payroll Taxes
If an Ohio LLC has employees, payroll taxes must be submitted, covering federal and state income tax withholding, Social Security tax, Medicare tax, federal and state unemployment taxes, as well as local and county deductions. Setting up payroll correctly is crucial to avoid penalties and fines, often prompting businesses to enlist payroll companies or seek accountant assistance.
>> Get Started With ZenBusiness >>
Ohio LLC Cost FAQs
How Much Does It Cost to Open an LLC in Ohio?
Initiating an Ohio LLC involves a fee of $99, which constitutes a singular payment for the LLC Articles of Organization filing. Depending on your LLC’s industry and geographical location, you might also require a business license in Ohio. The expense associated with local business permits varies accordingly.
How Much Does an LLC in Ohio Cost Per Year?
Engaging a Statutory Agent service, also known as a Commercial registered agent, entails an annual subscription fee of around $125. Depending on factors like industry and location, some Ohio-based LLCs might require a business license, with potential annual renewal fees determined by the municipality. Notably, Ohio doesn’t impose an annual fee (referred to as an “Annual Report”) on LLCs.
Should I Hire an LLC Formation Service?
You have the option to establish your Ohio LLC without the necessity of enlisting a professional service firm. It’s entirely permissible to take on the task of LLC formation independently.
Nevertheless, if your aim is to streamline the process and ensure the accurate submission of your LLC documents, we suggest considering ZenBusiness.
ZenBusiness boasts outstanding customer support and provides complimentary registered agent services for the initial year. Additionally, they present supplementary features such as assistance with an Operating Agreement and the handling of your Annual Report filing.
Conclusion
In summary, forming an LLC in Ohio involves more than just the basic registration costs. Beyond the filing fee, you’ll need to gather important documents, work with registered agents, and manage key details like operating agreements and securing an EIN.
Handling these financial aspects properly is crucial, and that’s where LLC services like ZenBusiness can be a great help. By understanding the full scope of these costs and leveraging ZenBusiness’s expertise, aspiring entrepreneurs can confidently start their LLC journey in Ohio, fully prepared for what lies ahead.
Related Articles
About the author
Dr. Gabriel O'Neill, Esq., a distinguished legal scholar with a business law degree and a Doctor of Juridical Science, is a leading expert in business registration and diverse business departments. Renowned for his academic excellence and practical insights, Dr. O'Neill guides businesses through legal complexities, offering invaluable expertise in compliance, corporate governance, and registration processes.
As an accomplished author, his forthcoming book is anticipated to be a comprehensive guide for navigating the dynamic intersection of law and business, providing clarity and practical wisdom for entrepreneurs and legal professionals alike. With a commitment to legal excellence, Dr. Gabriel O'Neill, Esq., is a trusted authority dedicated to empowering businesses within the ever-evolving legal landscape.