Starting a Business in Ohio (Full LLC Guide)

You’ve probably been thinking of starting up your own small business for quite some time now, but you’re a little hesitant, maybe because you don’t know what to do or where to start. Starting a business might be a tiny bit overwhelming, especially if you’re not sure what steps to take. If you’re that person, don’t worry, we got you covered. 

How to start a business in Ohio

Ohio is one of the states that have the largest number of active small businesses. In fact, 99.6% of the total businesses in Ohio are small businesses. The state is exceptionally friendly to small business entrepreneurs and owners, for they provide them with readily available resources and information to help you and your business grow and prosper. Most importantly, the state doesn’t have a corporate income tax which is very beneficial, especially for small business owners. 

The LLC registration process in Ohio is fairly easy and quick. The process has been fully automated, making it accessible and efficient to start up your business ventures. All procedures can be made through one portal with only a $99 fee to register. 

Set-up your business

Decide on a business model

Before anything else, review all the business models that the state offers. Ohio has six business model types to offer. 

Corporation – a business model formed by owners that are also known as the shareholders. They are the ones in charge of the day-to-day executive business decisions. They also employ officers to handle most of the operations of the business. Corporations also sell shares of their business. The state requires all corporations to have their statutory agent.

Sole Proprietorship – In this business model, all the liabilities and debts are in the hands of a single owner. The owner is regarded as a single entity, so they will have to file a DBA or a “Doing Business As” form if they want to do business under a different name. Unless this form is filed, the state doesn’t require businesses with this model to file other documents. 

General Partnership – a business model with two partners that share profits and gains but also are equally responsible for debts and liabilities of the business. In this model, instead of paying a corporate tax, owners pay income tax which makes tax rates more manageable in the state. 

Limited Partnership – Unlike a general partnership, in this business model, one of the partners (also called the general partner) runs the business and is responsible for all liabilities and debt. The other partner (also known as the limited partner) is somebody who contributes to the overall capital and shares in profits but isn’t responsible for any debts of the business. 

Limited Liability Partnership – A partnership with limited liability and has no responsibilities for the debts. These partners only manage the business. 

Limited Liability Company (LLC) – As mentioned by LLCGuys.com - an LLC is a business model more flexible than a corporation and a more formal structured business than partnerships. The owners of such businesses are called members, and they are not responsible for any debts of the business. One of the limiting factors of this business model is that it cannot sell shares. Active LLC owners must pay a self-employment tax on profits. Finally, just like a corporation, the state requires an LLC to have a statutory agent. 

After reviewing all the business models available, select which one fits your business idea best, and then you can proceed to the other steps in starting up your business. 

Make a name for your business

If you’ve already thought of a potential name for your business, make sure to run it through the Ohio Business Name Database to check if the name is still available for you. It is also probably a good idea to check if the name has been trademarked in the USPTO trademark database. 

Apply for Federal Employer Identification Number

Most businesses have to register for federal taxes. This can be done by applying for an employer identification number.

Register your business

In Ohio, the secretary of state website has a portal available for all business filings. You can start by making an account, choose the type of business that you are going to run, and finally pay the $99 flat fee to register your business in the state. If you’ve done all of that, you’re almost halfway through the process. 

And if you don’t know exactly what to do and how to file for your new LLC - don’t worry, there are many reputable companies that can help you with that. One of those is ZenBusiness - click here to read their full review. 

Obtaining necessary licenses and permits

Every business in the state requires a business license. This license will be distributed once the process of registration for the business is complete. Additionally, there are also certain industry requirements, such as a professional license required for specific businesses. You will have to check Ohio’s government business portal to see further details about this matter.

Register your business for tax purposes

Register for use and sales taxes

Certain businesses such as; selling, leasing, and renting goods or some service providing businesses have to register for sales and use tax. This can be done through the Ohio Business Gateway.

Registration for commercial activity tax

This process is only applicable to businesses with a gross income of $150,000. This can be done through the Ohio business gateway by filing a CAT 1 form. 

Registration for employer withholding tax

If your business requires employees, you have to register for the employer withholding tax. Additionally, employers also must refuse school district income tax from their employees that live in a school district that enforces this specific tax. This process can again be done through the Ohio business gateway. 

Hiring and reporting employees to the state 

Completion of form I-9

To verify that all of your employees are eligible to work in the United States of America or legal citizens of the country. You must first accomplish the form I-9 for this information.

Ohio new hire reporting program

Any newly hired employees must be reported to the Ohio New Hire Reporting Program by completing a new hire reporting form. This form requires specific information about the newly hired employee. 

Get in touch with the Ohio Department of Commerce

For the final step in setting up your business, find out what posters your business must display. You can reach out to the Ohio Department of Commerce for more information about this matter.

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Starting a Business in Ohio (Full LLC Guide)

Starting a Business in Ohio (Full LLC Guide)

Starting a Business in Ohio (Full LLC Guide)

Starting a Business in Ohio (Full LLC Guide)

Starting a Business in Ohio (Full LLC Guide)