While forming an LLC offers enticing perks like limited liability protection, its registration process and obligations have certain expenses that even small businesses may find overwhelming in the long run. In this step-by-step guide, our business enthusiasts will give a detailed overview of all Ohio LLC annual fees to help you maintain good standing and avoid possible penalties. 

Formation Costs for an Ohio LLC

Business Name Reservation

Before you form an Ohio Limited Liability Company and file your articles of organization, one of the first tasks you must accomplish is picking a unique business name. You must ensure that your selected option isn’t similar to other LLCs legally operating in the area. 

Like other states, business name reservation isn’t part of the required state fees you must pay when you form an LLC. However, suppose you’re still in the middle of legal documents preparation, then you can opt to hold on to that chosen name 150 days prior to official LLC formation for a $39 reservation filing fee.

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Although it’s easier just to file your Ohio Articles of Organization to secure your desired label, we understand that there are many things company owners must pay attention to before diving into the actual LLC formation. Therefore, our team advises you to check the public records of the secretary of state first to see if no other Ohio LLCs have the same name as yours. 

Articles of Organization

Any business entity intending to register their company as a Limited Liability Company must accomplish formational documents like articles of organization and send them to the Ohio Secretary of State. This filing will serve as proof that the government recognizes your company as an active and legal business structure and will eventually earn you operation rights.

Similar to most states, there’s always an entailed cost to form an official business structure. Your articles of organization will be processed by the Ohio Secretary of State along with a $99 filing fee. 

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An Ohio LLC also has the option to file its articles of organization online or send it through the mail, and the expenses will remain the same regardless. If you’re in a bind with time, you can also pay for their expedited filing. For another $100, the secretary of state could process your documents within two days, $200 for a one-day interval, and $300 for a four-hour waiting time. 

Should you decide to let an LLC formation service handle the registration of your company, expect additional costs on top of the actual filing fees.

Operating Agreement

Unlike the articles of organization, creating an operating agreement isn’t a mandatory requirement imposed by the Ohio Secretary of State when you start an LLC. But, despite that, there’s no denying that this internal document guides LLC members in handling business decisions concerning structure, ownership, and finances [1]

person writing on paper

Typically, an LLC in Ohio can curate its own operating agreements or download free templates online with no need to pay additional costs. Considering the provisions an operating agreement contains, our business enthusiasts highly recommend seeking professional services to avoid legal lapses that could damage the LLC in the long run. 

EIN Registration

When you form an LLC in Ohio, there are business transactions and activities you’ll have to handle that’ll require an employer identification number (EIN) or most commonly known as Federal Tax ID Number. 

If you’re opening a business bank account or hiring employees, then there’s no reason to delay getting this nine-digit ID from the office of the Internal Revenue Service (IRS). Obtaining an EIN is also important for tax purposes and other financial documents required by the federal government.

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Like drafting an operating agreement, requesting for an EIN has no charges if you apply for it personally. An LLC in Ohio will only incur an EIN filing fee if the business decides to let a formation company handle its procedure.

Statutory Agent

Any business owner who wants to form an LLC in Ohio knows that electing a reliable statutory agent to receive tax demands and court orders is one of the most crucial business decisions you’ll have to face. 

As the state’s contact person, your Ohio statutory agent must be of legal age, has an official mailing or business address, and available during office hours. On top of that, all information about your statutory agent should be in your articles of organization upon submission. 

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While electing someone you know could cost you less money, if you choose to sign up for a statutory agent service, expect its expenses to add up in your Ohio LLC annual fees. Electing a commercial statutory agent also allows you to use their mailing address in public records instead of yours, thus maintaining your business privacy.

Foreign LLC Registration

If an existing business wants to expand in Ohio, it must officially register as a foreign LLC by filing Form 533b along with a $99 submission fee. Failure to accomplish this procedure while continuing to operate illegally could incur hefty penalties on your end. 

LLC Formation Services

Running a business already requires a lot of energy, so there are instances when owners decide to start an LLC through formation services. These providers not only take care of all the filings required by the Secretary of State, but they also offer to draft operating agreements, act as an LLC registered agent service provider and offer customer support to keep your business in good standing. 

men sitting on sofa

The cost to form an LLC through professional incorporation companies ranges from $0 – $300, depending on the features and services you’re willing to pay. While it may seem costly to add these expenses on top of state fees you’re obliged to pay, signing up with these business experts could offer convenience and efficiency in fulfilling your LLC obligations.

Other Taxes

As an LLC compliant with state law, you’re obliged to pay state taxes required by the government along with certain business permits and licenses. Although annual reports aren’t mandatory in the state of Ohio, there are specific levies you must accomplish to maintain your limited liability perks.

Typically, LLCs are treated as pass-through entities and don’t need to file a corporate tax return. Instead, all profits and losses are reported there the personal returns of LLC members. Your taxation conditions also vary if you filed to be taxed as a corporation or sole-proprietorship. 

tax documents, pencils, and phone

If an LLC has more than one member (single-member LLCs), then you could be taxed similar to the terms of sole-proprietorships. 

(To assist you with the entire formation process, you can also hire the services of highly rated online incorporation providers here)

Ohio LLC Annual State Fees

Business Commercial Activity Tax

Business Commercial Activity Tax is among the tax requirements an LLC must fulfill. If your business has gross receipts exceeding $150,000 annually, then you’re no exception to this state obligation. 

There are specific brackets an LLC must follow in terms of this requirement. For example, if you’re making more than $1 million gross receipts, then you must file returns on a quarterly basis. And if you exceed $1 million, but not more than $2 million gross receipts, you owe the state a minimum of $800 annual tax.

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An LLC may file its commercial activity taxes online through the Ohio business gateway website or via mail.

Sales Tax

As previously stated, imposed charges to your LLC will depend on your business activities. Hence, if your company transacts through selling merchandise, then you’ll be taxed by the state with a rate of 5.75 percent from your business income.

Other Taxes

On top of the LLC formation cost and fees mentioned above, LLCs who hire employees will also be taxed with payroll, unemployment insurance, and withholding levies. You can learn more about specific fees you must cover on the Department of Taxation website.

FAQ

Is there an annual fee for LLC in Ohio?

No, there’s no annual fee for an LLC in Ohio. Unlike the majority of the states, the government also doesn’t require any annual report fee. However, you are expected to pay taxes such as commercial activity tax, withholding tax if you’re paying employees, or sales and use tax if you’re selling products.

Do you have to renew your LLC Every year in Ohio?

No, you don’t need to renew your LLC every year in Ohio or file annual reports. Instead, you have to consistently maintain state obligations like registered agent requirements and business levies. Failure to pay or keep these obligations may result in penalties and possible administrative dissolution imposed by the government.

Conclusion

Thinking of ways to lessen all Ohio LLC annual fees isn’t exactly the best conclusion you should be thinking of right now. Instead, our team would like to encourage you to be consistent on your state obligations, as this would help lessen the chances of incurring penalties and non-compliance risks in the long run. After all, running a business is a long-term journey. 

If you want to know the LLC formation costs and annual fees in other states, you can also check out this list: 

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