Starting a new LLC (limited liability company) or navigating the rules for doing business in another state for your existing LLC can be challenging for business owners. If you plan to start an LLC in Oklahoma, we have you covered with this step-by-step guide.
The initial filing fees and requirements for incorporation are minimal. Plus, if you plan to operate a physical business out of this state, you’d love the low living costs, taxes, and employee hiring overheads.
Having said that, let’s see how to form an LLC in Oklahoma.
Table of contents
- Step 1: Choose a business name for your Oklahoma LLC
- Step 2: Designate a registered agent
- Step 3: File Oklahoma LLC articles of organization
- Step 4: Obtain an EIN (Employer Identification Number) from the IRS
- Step 5: Prepare an LLC operating agreement
- Step 6: Open an Oklahoma business bank account
- Taxes, costs, and fees in Oklahoma for LLC
- Business permits and licenses in Oklahoma
- Pros and cons of forming an LLC in Oklahoma
- Key takeaways
- Formation FAQs for an LLC in Oklahoma
Step 1: Choose a business name for your Oklahoma LLC
The name has to be substantially different from those registered by other companies. And meet several other requirements:
- Include the words Limited Liability Company or Limited Company, or an abbreviation indicating this type of business entity, such as LLC, LC, L.L.C, L.C., or Ltd.
- Be distinguishable from the company names of corporations that existed in Oklahoma within the past three years.
- Don’t include restricted words, such as ones pertaining to certain professions and those that may be confused with government agencies.
Once you’ve come up with a name, you can find out whether your chosen business name is available by using Oklahoma’s Secretary of State’s business entity name availability search tool.
Alternatively, you can call the Secretary of State office to ask about name availability by phone at 405-522-2520.
This option also gets the office to confirm that your choice is sufficiently different from other registered business entity names.
If you’re still preparing your company formation documents and sorting out some other operational deets, it’s worth having your selected LLC name reserved.
To get a name reservation in Oklahoma, submit a filing form and a $10 fee. Filings are accepted online and by mail.
Business name reservations are valid for 60 days.
If you plan to operate your business under a name different from your legal one (or have multiple brands under your LLC umbrella), it makes sense to file for a trade name with the state.
Filing for a Trade Name with Oklahoma serves a dual purpose:
- Keeps another business entity from using your LLC’s name similar to a state trademark registration.
- Ensures good standing and compliance with the Secretary of State and prevents trademark issues with other Oklahoma registered businesses.
Step 2: Designate a registered agent
All Oklahoma LLCs must have a registered agent to accept service of process of legal documents, such as in instances when the limited liability company is part of a lawsuit.
A registered agent must:
- Be an individual resident of OK, 18 years of age or older, or a qualifying business
- Have a street address in Oklahoma. P.O. boxes are not accepted
- Be available at the said physical address during regular business hours
You can be your own registered agent if you meet these requirements.
However, some LLC members choose to hire a registered agent service instead. It makes sense for out-of-state companies without a physical presence in OK.
It may also be preferable for single-member LLCs operating from home addresses and keeping that address private from public records.
The costs range from $39-$250 (approximately), depending on the service you choose and whether you want to add additional formation services or ongoing operating assistance as part of the service package.
Step 3: File Oklahoma LLC articles of organization
To form an LLC in Oklahoma, you must file articles of organization for your LLC, either online or by mail, to the Oklahoma Secretary of State’s Oklahoma City office and pay a $100 state fee.
This filing is the main requirement for company formation.
Oklahoma LLC articles of organization must contain certain information:
- Your LLC’s business name
- Street address of your LLC’s principal place of business (note that this cannot be a P.O. box address)
- An e-mail address for your LLC’s primary person of contact (which is where annual registration documents will be sent)
- Name and street address for the LLC’s registered agent
- Term of existence for your registered business
- Signature of at least one person — the LLC organizer
Registering a foreign LLC in Oklahoma
If your Limited Liability Company (LLC) is organized in another U.S. state but expects to do business in Oklahoma, it should register with the Secretary of State as a foreign LLC.
There’s a separate registration form for foreign LLCs. The filing fee is $300. The form requirements are similar to domestic LLC formation.
However, it also must include a Certificate of Good Standing from the Secretary of State’s office for the state that the LLC is organized. The certificate can’t be older than 60 days.
Step 4: Obtain an EIN (Employer Identification Number) from the IRS
Your Oklahoma LLC may require an employer identification number (EIN).
EIN is a unique number associated with your business structure. The Internal Revenue Service (IRS) uses it to identify your LLC on federal tax returns and other tax filings.
Single-member LLCs, filing federal taxes as a sole proprietorship, can skip this step. But in some cases, having an EIN is mandatory:
- Any LLC or small business entity with employees must have a federal EIN.
- LLCs filing taxes as a corporation (C-corporation or S-corporation) or partner need an EIN.
- Also, companies in federally regulated industries need this number.
Step 5: Prepare an LLC operating agreement
For multi-member LLCs or manager-managed LLCs, a written operating agreement is recommended.
An operating agreement establishes the rights, obligations, liabilities, profit and loss share, officer roles, member roles, and other provisions laying out the LLC’s members’ rights and obligations to each other and the LLC as a business entity.
This document is not required to be filed with the Oklahoma Secretary of State. However, it should be kept on internal records.
Without an operating agreement, any possible disputes will be governed only by the articles of organization and Oklahoma laws.
It can complicate things, whereas having it all laid out in an operating agreement makes sure all members are on the same page. Not having an operating agreement may also increase the scope of your personal liability as your business owner.
To make an operating agreement, you can get a template online or seek help from an attorney or formation service.
Step 6: Open an Oklahoma business bank account
Opening a business bank account for your LLC is highly advised.
You can more easily keep track of your business income and expenses and separate them from personal ones. It helps with taxes, allocating profits, payroll, and determining business profitability.
Also, it lets you get business checks and credit cards. But most importantly, a separate business bank account prevents from commingling business and personal assets, which can lead to legal issues.
Some banks require that your LLC have an EIN to open a business bank account. Others don’t.
On average, monthly fees are $12-25, but some banks waive the fees if you keep a minimum balance.
Your business bank account doesn’t have to be a local bank. You can choose a national bank but will likely need to set up an account with a local branch.
Oklahoma LLC taxes, costs, and fees
Post-formation, the spending doesn’t stop. Oklahoma LLCs are subject to certain annual costs, taxes, and other fees.
Annual report cost
First, there’s an annual certificate requirement for both domestic LLCs and foreign LLCs doing business in the state of OK. It’s due on the anniversary date each year for when your LLC is registered.
The filing fee for the annual certificate is $25. Note that information for the annual certificate will be sent to the email address listed on your LLC’s articles of organization.
State LLC taxes
Your LLC may owe state taxes if some conditions apply. These include:
- Sales and use tax for selling tangible goods in the state
- Alcohol/mixed beverage tax for businesses selling alcohol
- Motor fuel tax for wholesalers selling such in the state
Additionally, LLCs with employees may owe additional state taxes for unemployment insurance, income tax, and payroll benefits.
Register your LLC with the Oklahoma Tax Commission to file state taxes.
If you’re unsure of your LLC’s tax obligations, you can call the Oklahoma Tax Commission and local government agencies for a consultation. Or you may want to talk to a tax expert.
Oklahoma business permits and licenses
Oklahoma doesn’t require any general business licenses.
However, some businesses and professional service providers may need to obtain occupation-specific licenses or permits. These may be required at the state and local levels.
Common types of businesses with license requirements include construction companies, pools, restaurants, bars, whole-sellers, retailers, transportation companies, and businesses providing consumer credit services.
Another common requirement is obtaining a sales tax permit from the Oklahoma Tax Commission (OTC). Retail businesses need to register their LLC with the OTC, collect sales taxes on goods sold, and remit taxes due to the OTC the following month.
Pros and cons of forming an LLC in Oklahoma
Forming an LLC in Oklahoma provides some great benefits, such as low filing costs and affordable maintenance fees.
Overall, the physical cost of doing business in the state is attractive too. Still, there are several downsides worth taking into account.
Oklahoma LLC pros
- Low business registration costs
- Cash incentives, tax credits, and other pro-business packages
- Low tax burden — ranked #2 in U.S. states for the lowest business tax burden
- Energy costs are 22% lower than the national average as of 2021
- Central location and good hiring prospects (with incentives and regulations that make the cost of hiring lower than in many other states)
Oklahoma LLC cons
- Not the best business climate and lack of strong business community
- Annual certificate filings and state fees apply
- Fundraising may be difficult, as investors tend to be more comfortable with business organized in some of the more popular states for incorporation
- Less guidance is available as compared to more popular states businesses choose for company formation
- Oklahoma offers low formation costs and tax incentives, making it a good place to form an LLC or register a foreign LLC.
- LLCs need to file articles of organization with the state and must provide in-state registered agent details.
- There may be additional requirements such as business licenses and permits and state tax requirements for some LLCs.
- Annual reports are required in Oklahoma, but the filing fee is just $25 annually.
Oklahoma LLC FAQs
Below are some of the most frequently asked questions (FAQs) about forming an LLC in Oklahoma.