In the last few years, Ohio small businesses brought a net increase of 32,140 new jobs to the state, contributing to a local economy that continues to grow. If you plan to start a small business in Ohio, a limited liability company (LLC) is a smart choice. LLCs offer liability protection and flexible tax options, among other benefits for small businesses.
Thanks to the Ohio Secretary of State’s (SOS) straightforward online filing process and helpful resources, LLC formation in Ohio is more streamlined than ever. Just follow the steps below, and you'll be on your way to operating the newest LLC in The Buckeye State.
The Buckeye State business advantage: Why start an Ohio LLC?
The primary benefit of making your business an LLC is asset protection. If your business incurs debts or faces legal action, your personal assets are generally shielded from any settlements that arise.
An LLC is a separate legal entity from its members. It can sign contracts, buy property, and take out loans in its own name. This helps you separate your professional and personal life, both for legal reasons and to increase the credibility of your business.
Ohio is a business-friendly state, with favorable laws for small business owners. Here are some of the ways Ohio works to help businesses thrive.
- No annual reports. Unlike most states, Ohio doesn’t require businesses to file an annual report. In fact, the state has no ongoing state fee for most LLCs, which makes long-term compliance more affordable.
- No franchise tax. Ohio repealed its franchise tax in 2014. Instead, the state has a commercial activity tax (CAT) with a threshold of $6 million in annual gross receipts, giving small businesses a chance to grow.
- Tax flexibility. Ohio allows pass-through entities—such as an LLC or S corp—to elect to pay state income taxes at the entity level rather than pass those taxes to the individual owners. This helps owners choose the best tax method for their business.
- Operational flexibility. Lastly, Ohio only requires LLCs to have at least one member and appoint a statutory agent before filing articles or organization. As long as you maintain compliance, how you operate your LLC is up to you.
Before you file: Essential Ohio LLC requirements
It’s important to know the requirements for an LLC in Ohio before you start your articles of organization. This helps ensure your forms are error-free and that the Ohio SOS will accept them with no delays.
Follow Ohio LLC name rules
The Ohio Secretary of State won’t allow you to register a business if its name doesn’t comply with state requirements. Your business name must:
- Include the words or abbreviations “limited liability company,” “LLC,” “L.L.C.,” “limited,” or “ltd.” You can always file a doing business as (DBA) name if you want to operate under a name without these words, but the formal entity name must include one of them.
- Be unique—that is, different from existing business names registered with the Ohio SOS and distinguishable enough that it can’t easily be confused. You can conduct a name search on the SOS website to determine if your desired business name is available.
- Avoid words used to name a government agency (i.e., State Department, CIA, FBI, Treasury, etc.)
- Stay away from restricted words implying unauthorized association with regulated industries, including words like bank, lawyer, attorney, credit union, or insurance. Terms related to these industries may require additional documentation and proof of licensure paperwork.
See Ohio Revised Code Section 1706.07 for a complete listing of the state's naming rules.
Identify a statutory agent
Ohio law (Section 1706.09) requires you to appoint a statutory agent for your LLC (also called a registered agent in other states). A statutory agent is the person or entity that receives service of process and other formal legal notices on behalf of your LLC. This role is required because it ensures that you can be informed of formal legal notices about your business.
A statutory agent can be a person (including yourself or an employee of your LLC) or an entity that offers a statutory agent service. Your agent must:
- Be resident of Ohio (if an individual)
- Have a physical address in the state (if an entity)
- Maintain physical presence on-site during regular business hours
Obtain Ohio business licenses and permits
Although Ohio doesn’t have a general operating license, LLC owners may need a business license to operate in the state depending on the location and nature of their business.
For example, if your LLC sells tangible personal items or taxable services, the LLC must obtain a vendor's license from the Ohio Department of Taxation. This also means you’ll need to collect and pass on sales tax, which ranges from 6.5% to 8% across Ohio.
How to create an Ohio LLC: Your step-by-step formation roadmap
Thanks to the Ohio SOS’s online filing option, registering your business in Ohio is relatively straightforward, although it does take careful planning. Check out the steps below for a picture of what the process looks like, and consider simplifying the process by launching your Ohio LLC through LegalZoom. Just pay the state’s $99 filing fee and get started immediately.
Or, follow these steps to prepare your application and register with the SOS online.
Step 1: Name your Ohio LLC
Before you file your articles, make sure your business name meets Ohio naming requirements as outlined above. If you aren't ready to register your LLC but are concerned your name might be taken by someone else, you can reserve it for a $39 fee. In Ohio, names may be reserved for up to 180 days. Simply pay the fee and submit Form 534B to the SOS.
Step 2: Choose your statutory agent
You can be your own statutory agent or use a professional registered agent service to handle the responsibility for you. A professional service allows you to bypass the requirement for maintaining regular office hours in a physical location. If you operate out of your home, it also prevents your home address from being associated with your business in the public record.
Step 3: Prepare and file articles of organization
Now you’re ready to prepare the articles of organization and file them with the Ohio SOS to officially register your LLC. It sounds like a big job, but primarily entails filling out and submitting a relatively simple online form. Or if you’d rather fill it out by hand, just complete Form 610 and mail it to the address provided on the second page.
Here’s what you’ll need:
- Your LLC name
- Effective date of the LLC (if different than the date of filing, up to 90 days in advance)
- Purpose of the LLC (optional)
- Name, address, and signature of the statutory agent
- The name and signature of a member, manager, or representative of the LLC
Once you file your articles, the SOS will review the filing and issue you a certificate that confirms the LLC formally exists, if approved. You’ll need this certificate to obtain an employer identification number (EIN), business licenses, and a business bank account.
Step 4: Create an operating agreement
An operating agreement is a document that outlines the way your LLC will conduct business. Ohio doesn’t require an operating agreement, but it’s an essential component of any business.
Among other benefits, a readily accessible, written operating agreement can help settle any disputes that may arise over financial agreements and other potential litigation.
These are a few common elements to include in your operating agreement:
- LLC's name and principal address
- Duration of the LLC (if it has a specific end date)
- Name and address of the statutory agent
- Copy of the articles of organization
- Purpose of the business
- Ownership structure
- Members and their contributions
- Outline of how profits and losses will be divided
- Procedures for incoming and outgoing members
- Voting rights and procedures
- Management structure
- Indemnification and liability clauses
Without an agreement in place, the courts settle disputes according to the basic guidelines set forth in state law, which may not reflect the best interest of the LLC and its members.
This is one of the main reasons to strongly consider creating one—whether you draft it yourself, use an LLC operating agreement template, hire a lawyer, or order an Ohio LLC operating agreement through a service like LegalZoom.
Building a business is enough work as it is. We'll help you start your LLC with confidence.
Step 5: Get an employer identification number (EIN) and open a business bank account
The Internal Revenue Service (IRS) assigns a unique nine-digit employer identification number (EIN) to identify businesses for tax purposes. Think of it as a Social Security number for your LLC. You can obtain your EIN by mail or online through the IRS.
An EIN allows you to do the following:
- Pay income tax at the state and federal levels
- Open a business bank account
- Hire employees
You can also have LegalZoom obtain an EIN for your Ohio LLC if you’d like assistance with the application. Once you have your EIN, apply for a business bank account to keep your personal and business finances separate. This is a helpful step to reinforce your limited liability status.
Step 6: Register for state taxes and comply with employer obligations
Next, make sure to register with the Ohio Department of Taxation (DOT) for applicable state taxes. This might include sales tax, employer withholding tax, or commercial vehicle taxes, among others.
You’ll also need to consider the following obligations if you hire employees or independent contractors:
- Report all new employee hires. Within 20 days of hiring or rehiring, LLCs must report new employees and contractors to the Ohio New Hire Reporting Center.
- Purchase workers' compensation insurance. LLCs must purchase workers' compensation insurance as soon as the first person is hired.
- Pay unemployment taxes. The LLC must establish an unemployment compensation tax account with the Ohio Department of Job and Family Services.
If you can’t find the information you need through an Ohio government website, it’s best to consult an accountant or business attorney to understand your tax or employer obligations.
Step 7: Check if your LLC needs a business or vendor's license
You may need to obtain a business licence based on the nature of your business and where it's located. eLicense Ohio is a helpful resource that allows you to review licensing requirements across several state agencies. You can also use LegalZoom’s license and permit search service, and we’ll look into the requirements for your Ohio LLC.
Ohio tax obligations
Unlike many states, Ohio doesn’t require LLCs to file an annual report or pay an annual franchise tax. However, there are some tax obligations that Ohio LLC owners should be aware of.
Commercial Activity Tax
- Who files: Businesses with more than $6 million in gross receipts (as of 2025)
- How much: 0.26%
- When to file: By May 12, August 11, November 12, and February 10
- Where to file: Online through Ohio Business Gateway
Sales and use tax
- Who files: Businesses that sell, lease, or rent tangible (physical) goods and select services
- How much: 5.75% (Local sales tax may also apply. The average combined rate is 8%)
- When to file: By the 23rd day of each month for monthly returns, by July and January 23 for semi-monthly returns, or by April, July, October, and January 23 for quarterly returns depending on the amount of your withholdings
- Where to file: Online through Ohio Business Gateway
Employer withholding tax
- Who files: Businesses with employees
- How much: Varies depending on your employer withholding calculation
- When to file: By the last day of the month at the end of each quarter, within 15 days after the end of each month, or within three bank days after the end of each partial-week depending on your withholding amount
- Where to file: Online through Ohio Business Gateway
Elected pass-through entity income tax
- Who files: Businesses that elect to file state income taxes as an LLC rather than “pass” their gains and losses through to their owner’s individual income tax
- How much: 8.5%
- When to file: By April 15, or by the 15th day of the fourth month after the close of the LLC’s financial year
- Where to file: Online through Ohio Business Gateway
Federal taxes
By default, an LLC files federal income taxes as a pass-through entity. That means a single-member LLC files as a sole proprietorship and a multi-member LLC files as a partnership. However, your LLC can elect to file as a corporation instead by filing Form 8832.
License and permit compliance
Whether or not your LLC needs an Ohio business license or permit and which one(s) it needs depends on its purpose and location. Below are a few examples of commonly required licenses.
State licenses and permits
- Vendor's license. Businesses that sell tangible goods or certain services need to obtain a vendor's license through the Ohio Department of Taxation (DOT).
- Professional certifications. Ohio law requires regulated professionals—such as healthcare providers, attorneys, accountants, real estate agents, and contractors—to obtain licenses or certifications regulated to their field. You can search professional licenses through the state's eLicense system or the Ohio Business Gateway.
- Environmental registrations. If your business connects to a public water system, handles hazardous or nonhazardous waste, and/or emits air contaminants, check the Ohio Environmental Protection Agency's (EPA) for permit requirements.
Local licenses and permits
- Operational business licenses. Some counties, such as Kenton County, require all businesses to obtain a general license to operate within their city or cities.
- Health and safety permits. Businesses in many jurisdictions, including Norwood City, need to obtain permits related to health and safety hazards.
- Zoning permits. Most cities, such as Athens, require zoning permits for construction and land developments.
Check your local municipality’s website for their licensing requirements. Or, work with LegalZoom to learn which licenses your Ohio LLC needs.
Benefits and drawbacks of an Ohio LLC
Every state has its own pros and cons when it comes to not only starting a business, but also which business structure you choose. Here are some of the ways Ohio law impacts LLCs.
Advantages
- No annual report
- No franchise tax
- No corporate tax
- Non-resident tax credit
- Competitive formation fees
- Flexible tax options
- Simple online business/tax filing systems
- Business-friendly environment (strategic location, affordable, support for businesses)
- Limited liability (asset protection)
- Flexible management structure
Disadvantages
- Commercial activity tax for larger businesses
- Self-employment taxes
- State and local licensing requirements
- More filing complexity than a sole proprietorship
- Limited investment opportunities compared to a corporation
Considering another state for your LLC?
If you plan to do business in Ohio, you will need to register your LLC there. But if you aren’t location-restricted, you can form an LLC in any state—and you can always file your foreign LLC qualification if you start doing business in-person in Ohio.
Here’s a quick look at how Ohio compares to other states for LLC formation.
When to consider a Delaware LLC
Delaware is one of the most popular states for startups. While a Delaware C corp is more typical than a Delaware LLC, there’re some business advantages that’re unique to LLCs in the state. For example, as a pass-through entity, LLCs can take advantage of Delaware’s lack of sales tax, personal property tax, investment income tax, and inheritance tax while avoiding the state’s high corporate income tax.
When to consider a Texas LLC
Texas is another favored state for entrepreneurs looking to scale their business. The Lone Star State boasts several big, business-friendly cities and a strong economy without the high cost of living that comes with states like New York or California. Despite the higher formation fees, Texas LLCs can save on operating costs and benefit from the lack of corporate and individual state income tax.
Other popular states for LLC Formation
In addition to Delaware and Texas, below are a few of the most popular states for business registration.
- Wyoming is known for its commitment to privacy and asset protection, low formation costs, and minimal compliance requirements.
- California boasts exceptional access to venture capital, a large talent pool in most major industries, and high consumer demand.
- New York offers access to an ecosystem of innovation, diverse industries, a strong economy, and strategic proximity to global markets.
Start an LLC in Any State
LegalZoom can help you file your state's formation paperwork for as little as $0 + state filing fees.
Why form an Ohio LLC with LegalZoom?
There’s a reason over 4 million businesses have trusted LegalZoom with their formation. Our LLC registration services offer a fast, easy, and affordable way to form your LLC. Here are some of the perks:
- Simplified process. LegalZoom combines technology and expertise to take the guesswork (and paperwork) out of business formation. Our online process can help you start your LLC in minutes.
- Expert support. We’re committed to the highest quality and accuracy. If your filing is rejected or incorrect due to our error, we’ll correct it with the government agency at no additional cost to you.
- A full suite of services. LegalZoom is a one-stop online shop for all your business filing needs. We provide year-round compliance services, bookkeeping tools, access to attorneys, registered agent services, and trademark registration.
FAQs about forming an LLC in Ohio
How much does it cost to start an LLC in Ohio?
The basic cost to form an LLC in Ohio starts at $99, which covers the state filing fee. However, depending on your needs and timeline, the total costs can increase closer to $500.
Here’s an overview of some of the common expenses.
- Filing fee: $99
- Name reservation: $39 (optional)
- Preclearance filing: $50 (optional, allows you to have your filing reviewed before submission)
- Expedited processing: $100 to $300 (four hours to two business days)
- Certified copies: $5
- Statutory agent services: $0 to $300
- Vendor’s license: $50
In addition, you might pay for business licenses, permits, and insurance, all of which have varying prices based on your industry and location.
How long does it take to form an Ohio LLC?
For an LLC. Ohio SOS’s standard processing time is 3 to 7 business days. Expedited processing times are two business days ($100), one business day ($200), or four hours ($300).
Do I need an operating agreement in Ohio?
No, Ohio law doesn’t require your business to have an operating agreement. However, all LLCs should have one. Operating agreements outline how your business will run, from management and voting rights to dispute resolution. In legal terms, a written agreement can inform how courts determine a lawsuit.
Do I have to file an annual report in Ohio?
No, Ohio doesn’t require LLCs to file an annual report, which also means no annual report fees.
What is a statutory agent?
A statutory agent is another word for a registered agent. It refers to a person or business entity that your business appoints to receive legal and official documents on behalf of your business. Professional statutory agents like LegalZoom often also provide additional services, such as compliance coverage and virtual mailboxes.
What is the Commercial Activity Tax (CAT)?
Ohio’s CAT is a 0.26% annual gross receipts tax for the privilege of doing business in the state. However, the tax only applies to companies with more than $6 million in total gross receipts.
Miles Almadrones and Rudri Bhatt Patel contributed to this article.
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