How Much Does an LLC Cost in Ohio?

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If you’re thinking about establishing an Ohio LLC but are concerned that it may be difficult and expensive, you’re definitely not alone. A lot of people avoid following their dreams and starting up companies because they worry over the work involved. They may also not be clear on where to start, so they decide to focus their efforts on something else. It’s understandable, but it also doesn’t have to be that way.

Fortunately, it’s really not that difficult if you know what to do. It’s also easier if you use an LLC formation service, which takes a lot of the pressure off and lets you get your LLC formed quickly and efficiently, without any hassle. The cost of formation also varies a lot, depending on which state you’re in. Here, we’ll look at the costs in Ohio.

General Steps and Costs When Forming an Ohio LLC

costs forming an ohio llc

Before you start down the road of creating your Ohio LLC, make sure you’re clear on the steps you’ll need to take, and how much each one of those steps costs. That way, you can move from one step to the next, and make sure your finances are in order, too. It’s faster and easier that way, and you’ll enjoy more peace of mind.

Naming your Ohio LLC

The good news about the cost of naming your Ohio LLC is that the name search is completely free. But if you want to reserve a business name, that costs $39. Registering a DBA (Doing Business As) name also comes with a cos of $125. If you don’t need a DBA, and you’ll be operating only under the name you register with the state, you won’t have to worry about the DBA fee.

Filing articles of organization

You’ll need to file your articles of organization with the Ohio Secretary of State. The cost for that is $99. A Statement of information comes with an additional filing fee in many states. Ohio has no requirement for this, so you won’t have this extra expense when you form your LLC there.

Appointing a registered agent

If you’re going to have an LLC in Ohio, you need to appoint a registered agent to accept any official documents on behalf of your company. You can actually be your own registered agent, which won’t cost you anything. If you need to appoint someone else or use a service, that can cost from $199 to $400 per year.

Creating an operating agreement

This is an optional step, but it’s definitely recommended. With an operating agreement, you have more of the details and specifics of your LLC laid out in a document you and others can refer to. The cost for this could be $0 if you do it yourself, or up to around $1,000 if you hire an attorney or use our operating agreement service.

Other Annual and Additional Ohio LLC Costs

ohio llc costs

When you’re about to start up an LLC in Ohio, you can be so focused on getting it up and running with the basics that you might not realize there could be other costs. You may also have some annual costs, so you want to make sure you’re prepared for those when they come up.

Franchise tax

Ohio used to have a franchise tax, and it was phased out for the vast majority of taxpayers in 2010. Certain types of financial and securities companies are the only ones who still have a franchise tax, so unless your LLC falls into those categories you’ll pay $0. Expect to pay the franchise tax if you have a corporation that is one of the following:

In addition to being one of those types of companies, you also have to:

Most types of businesses, and even most corporations, won’t need to pay the franchise tax. But if you have a corporation, or are forming a corporation, in any of the sectors listed above, you’ll want to look into whether you’ll owe the tax.

Business licenses and permits

Most states have business licenses, and if the state itself doesn’t have one, sometimes specific counties or cities will. Ohio requires anyone doing business in the state under a name that is not their own to be licensed there. Additionally, the city where your business is located may also have business licensing or permitting requirements. Some types of businesses will have additional requirements, such as those in the financial, medical, and construction fields. The cost of licenses and permits varies based on the industry, location, and other factors.

Annual report

Annual reports are provided to the state every year, detailing business information and activities. Ohio doesn’t require an annual report, and there’s no filing fee.

LLC fee

State income tax is required on the money you pay yourself from your LLC. The amount you pay will be between 1.98% and 5%, depending on your income. You also have a state sales and use tax, which is 5.75%. You will also pay Commercial Activities Tax (CAT), depending on the amount of money your LLC makes.

Earnings

Tax Paid

Less than $1 million annually

Minimum tax of $150.00

More than $1 million but less than $2 million

Remit CAT quarterly and pay $800

Between $2 and $4 million annually

$2,100 in CAT

More than $4 million

$2,600 in CAT

What Expenses You Can Write Off

ohio llc write off

The good news about the expenses you’ll incur, is that you can write off a lot of them. Most of the LLC formation costs are tax-deductible for your federal return. These costs include:

Ohio LLC Costs – Summary

LLC Step

Cost

Filing Fee

$99

Business License

Varies by Location and Type (from $25 to $350)

Registered Agent (Optional)

$199 to $400

Reserve Business Name (Optional)

$39

Filing a DBA (Optional)

$125

Operating Agreement (Optional)

$0 – $1,000

Franchise Tax (Annual)

Only for Very Specific Types of Businesses

Annual Report (Not Required)

$0

Conclusion

It doesn’t have to be difficult to set up and file an LLC in Ohio. When you have help, though, it’s even easier. Using our LLC creation services take all the guesswork out of your company’s creation, so you can focus on growing your business for the future. Ohio is a business-friendly state and can be a great place to set up and operate your LLC with low fees and reasonable requirements. You can get started today.

This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.

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