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What are the steps to forming a limited liability company (LLC) in Ohio, and what are the benefits of choosing this type of corporate structure?

Picture of Chris Battis By   ·  1 minute read

In Ohio, forming a limited liability company (LLC) involves a series of steps prescribed by the Ohio Revised Code.

  1. Choose a name for your LLC. Make sure that the name is available for use and complies with the naming requirements specified by the Ohio Secretary of State.
  2. File Articles of Organization with the Ohio Secretary of State. This document should include the LLC’s legal name, the name and address of the LLC’s statutory agent, and the purpose of the LLC, among other information.
  3. Draft an Operating Agreement. While not required, it is recommended that an LLC draft an operating agreement. This legal document outlines the internal workings of the LLC, including the structure of management, each member’s ownership percentage, and how profits and losses will be distributed.
  4. Obtain any required licenses or permits. Depending on the nature of your business, there may be certain state or local licenses or permits that you need to obtain before you can operate your LLC.
  5. Obtain an EIN (employee identification number) from the IRS. This will enable your LLC to open a bank account and pay taxes.

Choosing to form an LLC in Ohio provides numerous benefits, including:

  • Limited personal liability. The LLC structure provides a degree of protection for members’ personal assets, shielding them from business debts and lawsuits.
  • Simpler taxation. LLCs are taxed as pass-through entities, meaning that the LLC itself is not taxed, but rather each member reports their share of the LLC’s profits and losses on their personal tax returns.
  • Flexible management structure. LLCs allow for flexibility in the management structure, with members able to choose to manage the LLC themselves or delegate management to a manager or board of managers.
  • Attractive to investors. Given the limited liability protection, pass-through taxation, and flexibility in management structure, LLCs can be an attractive option for investors.

It is important to note that there may be certain limitations or exceptions to the advantages outlined above. Additionally, the specific details of each LLC will affect its operation and legal considerations, so it may be beneficial to consult with a licensed attorney to ensure compliance with relevant laws and regulations.