Ohio LLC formation can be a confusing process, and many new entrepreneurs have questions regarding LLC costs. Here’s an overview of all the state fees and optional expenses you’ll need to know.
Ohio LLC formation cost: $99
All company formation documents for an LLC are filed via Ohio business gateway — an official e-portal for new businesses registration.
The articles of organization filing fees are the same for domestic Ohio LLCs (based in Ohio) and foreign LLCs (or out-of-state LLCs filing to do business in Ohio). Foreign LLCs need to submit a different form, however.
The processing time for both domestic Ohio LLCs and foreign LLCs is usually 3-7 business days.
Furthermore, expedited service is available for an extra fee, depending on how fast you want the turnaround time:
- $100 for document processing in 2 business days.
- $200 for 1-day processing. Only applicable to hand-in documents.
- $300 for 4-hour processing. Only applicable to hand-in documents submitted before 1 pm.
Extra Ohio LLC formation costs to account for
LLC costs will vary based on your business type and whether or not you make changes to the initial formation documents later on.
But you can generally expect to cover the operational bill for costs related to registered agents (or statutory agents), business name reservation, trademark or trade name applications, and business permits and licenses.
Note that these will not apply to every LLC. But they are the common costs your LLC should be aware of. There may also be other costs associated with forming an LLC beyond those discussed below.
For example, you may wish to retain professional services, such as legal counsel for drafting an LLC operating agreement template or assistance with other business filings. Plus, there are varying costs to open a business bank account.
Below you can find a further breakdown of the Ohio LLC formation costs.
Registered agent fees
There’s no initial charge for choosing a registered agent for your LLC. The fee is already bundled into the articles of organization cost.
However, if you decide to change your registered agent later on, there are state fees:
- To File Statutory Agent Update Online at Ohio Business Central — $25.
- To File Reinstatement & Appointment of Agent Online at Ohio Business Central — $25.
Initially, many small business owners choose to act as their own registered agents if they are Ohio residents with an Ohio address (not a P.O. box). However, handling the service of process documents can be mentally taxing. So many choose to hire a registered agent service instead. The cost for this is about $100-$300 per year.
In cases where your LLC has done a business name search and found that the chosen name is available but has not yet filed the formation documents, you can make a name reservation.
Filing for a name reservation allows an LLC to reserve a business name for up to 180 days. This filing is submitted to the Ohio Secretary of State with a $39 filing fee.
Fictitious name registration
Remember to do a name search before filing, as your assumed name (trade name) must be distinguishable from others in Ohio’s records. Otherwise, your submission will be rejected, and the fee is non-refundable.
To update, renew, or change the registered fictitious name, there are other filings that all have a fee of $25.
Trademark and service mark applications
It’s highly recommended that Ohio LLC owners register their trademarks and service marks.
If your LLC has a name that consumers or customers may recognize and associate with your LLC’s brand image, then you may want to consider extra intellectual property (IP) protection for it to prevent any brand equity dilution or damage.
Trademarks can be registered on both federal and state levels. If you want to obtain a trademark or service mark from the state of Ohio, it needs to submit a filing with the Ohio Secretary of State and a $125 filing fee.
Business permits and licenses
The Ohio Secretary of State doesn’t issue business licenses to any business entity. The Ohio Department of Commerce does in certain instances through the Ohio Business Gateway licensing website.
Not all LLCs will need a business permit or license, in which case the cost is $0. Based on your LLC’s industry, businesses will need to check with local, city, and state rules for whether permits are required.
To provide an idea of what a license fee may cost, there’s a vendor license that’s required for companies that make taxable sales per Ohio law. The cost for this state filing is $25.
Does Ohio have an annual LLC fee?
Ohio doesn’t require a limited liability company to submit an annual report, so there’s no fee. In 2014, the state removed minimal annual franchise taxes for LLCs and replaced this with progressive taxation.
However, you should mind other renewal fees, such as those for fictitious names, trademarks, service marks, and trade names. Renewal fees for these are $25.
What taxes do LLCs pay in Ohio?
Generally, LLCs report on federal tax with the IRS.
LLCs are treated pass-through taxable entities by default for income tax purposes, allowing business owners to avoid double taxation.
It means the company profits and losses pass through to the owners and are reported on the personal tax returns, similar to a sole proprietorship.
However, in some instances, your LLC may still need to pay state taxes in Ohio. The state taxes due in Ohio include the following.
Commercial Activity Tax (CAT)
Your LLC is liable for the commercial activity tax if your gross receipts exceed $150,000 per year. The tax rate is calculated on the gross receipts of your LLC using a marginal rates scale.
If you earn below $1 million, you pay a flat $150 rate. To pay CAT, you’ll need to obtain an Employer Identification Number (EID) from the IRS for convenience.
If your LLC makes taxable retail sales, you need to remit a sales tax to the Ohio Department of Taxation. As of 2021, the Ohio state sales tax rate is 5.75%. However, individual cities and counties may have different tax rates. You can use both EID or your social security number to pay sales taxes.
Corporate income tax
If your LLC elects to be taxed as an S-corporation or C-corporation, there’s no state corporate income tax due in Ohio. Instead, you’d be just paying the gross receipt tax rates at an applicable scale.
If no election is made, business owners rather pay taxes for business income on their personal income tax returns.
Conclusion: How much does an LLC cost in Ohio?
The costs to form and operate an LLC in Ohio start at $99.
That’s how much you’ll pay if you file the formation documents yourself, rather than use an LLC formation service, plus serve as your own registered agent. This cost also excludes any applications for business licenses.
But in reality, you may end up paying more for running your company in Ohio. Here’s an alternative cost breakdown:
- Filing fee of $99 for articles of organization.
- Reserve LLC name for $39.
- Use a registered agent service for $100 (annual fee).
- Register a trade name for $39.
Total cost (assuming no licenses are needed and before taxes (if required)): $277.
As you can see, not all costs will apply to your LLC. Consider the examples above as a guideline for your Ohio LLC’s total cost.