Introduction – Why Ohio?

Whether you want to expand your business or are thinking of moving your business to Ohio then the location does matter. Ohio is often considered one of the top states for starting a company as the local laws are pro-business. The overall business climate is conducive, and the state provides different types of resources to enable your company to sustain itself in a competitive environment. You have to consider the logistic aspect of moving and also ask yourself if Ohio allows domestication. The state provides numerous advantages like location and infrastructure. Let us try and identify the primary benefits of moving your company to this state.

Business-friendly taxes

Taxes play a crucial role, especially if you are considering entity domestication in Ohio. Irrespective of the type of business you may have, there will be certain forms of taxes applicable. In fact, each and every state in the USA has business taxes and it’s the rate that is different. Some states also don’t levy certain taxes. If you plan on relocating a business to Ohio, then here is the ground reality –

• The state of Ohio does not have a corporate income tax
• Ohio does not have an estate tax or even any inheritance tax
• There is no business personal property tax in Ohio
• The graduated state individual income tax rate ranges from 2.750 percent to 3.500 percent and is one of the lowest
• The total range of sales & use tax rates in Ohio is lower than in several top states like California and Illinois
• The gross receipts tax in Ohio is as low as 0.26%

Diverse and growing economy

The state of Ohio has a growing economy, and its real gross domestic product (GDP) was $698.22 billion U.S. dollars in 2023. Moving your business to Ohio is beneficial because it has a diverse industry base. This will ensure your return on investment initially and in the long term is quite good. Industries like automotive, manufacturing, energy and chemicals, food processing, and logistics and distribution represent the state’s historic strength.

Global market access

Ohio, situated in the Midwestern region of the USA, shares its borders with Pennsylvania, West Virginia, Kentucky, Indiana, and Michigan. Relocating a business to Ohio means getting access to the international markets for increasing trade. You can benefit from the robust transportation infrastructure that the state has, which includes the fourth largest interstate highway system in the nation. If your area of specialization is import and export, then you can transfer LLC to Ohio Foreign Trade Zone (FTZ). FTZs have been created to provide opportunities to help you lower your costs while boosting profits through various duty savings benefits. One of the key industries in the state is logistics and distribution, and is currently ranked among the top 10 freight destination states.

Driven workforce

One of the important factors driving business success is committed employees. If you are thinking of moving a corporation to Ohio, then you may require a talented local workforce. The state is known to have a massive workforce ecosystem. Ohio is also home to several Innovation Districts that enable businesses, ideas, and people to grow together. The STEM (Science, Technology, Engineering, and Mathematics) network in the state has also witnessed positive growth.

Affordable living

Why is affordable living important, especially if you are moving your business to Ohio? It has often been seen that places with higher costs of living lead to reduced consumer spending and higher energy costs. Both are not good for business growth. Thankfully, the average cost of living in Ohio is 8% lower, while utilities are 3% lower than the national average.

Steps to Move Corporation to Ohio

If you are thinking of relocating a business to Ohio, the state offers several benefits, from small business incentive programs to special industrial zones and districts. While moving your business, you may have several questions, like whether Ohio allows domestication and the applicable relocation processes. There are primarily three options for moving your corporation to this state. Let us look at these options in detail.

Register as a foreign corporation

One of the first options for moving a corporation to Ohio is registering it as a foreign company. This is a good option for you if you want to operate your existing company in the home state (state of incorporation) as well as Ohio. There is a process for relocating a corporation and is governed by the 2022 Ohio Revised Code, Title 17 – Corporations-Partnerships, Chapter 1703 – Foreign Corporations. The process for foreign qualification is as follows:

• Designate a registered agent in Ohio for handling service of process pursuant to OH Rev Code § 1703.041 (2022)
• Conduct a name availability search and register the name of the corporation pursuant to OH Rev Code § 1703.31 (2022).
• File the Foreign For-Profit Corporation Application for License pursuant to OH Rev Code § 1703.04 (2022)
• You must also submit a Certificate of Good Standing issued by the home state or state of incorporation.

Do you want to start a foreign corporation in Ohio?

Convert a Foreign Corporation to an Ohio entity

The second option facilitates entity domestication in Ohio through the process of entity conversion. You can use this option if you want to change the status of a foreign entity to domestic. You will be required to file a Certificate of Conversion pursuant to Ohio Revised Code §§1701.811, 1706.722, 1776.72, and 1782.4310. When you convert your existing company into a domestic corporation, you will have to file the necessary organizational documents as well. You will need to specify the converting entity type in the application. The certificate of conversion will be filed along with a fee of $99 and an affidavit of personal property. This process makes moving your business to Ohio easier and more efficient.

Dissolve the home Corporation and establish a new Corporation in Ohio

The third option for moving a corporation to Ohio is through dissolution. You will need to dissolve your existing company in the home state (state of incorporation) and then apply for incorporation in Ohio. This process of relocating business to Ohio will require you to follow the laws and process of dissolution of the home state. Although the process of dissolution varies according to the state here are some general procedures:

• Approval of dissolution of a corporation by incorporators, directors, or shareholders
• Filing Articles of Dissolution in the home state
• File any federal, state, and local taxes and claims outstanding
• Publication of notice of dissolution, if applicable
• Wind up all affairs in the home state, like canceling business licenses and permits

• Appoint a registered agent in Ohio for service of process pursuant to OH Rev Code § 1701.07 (2022)
• Identify and reserve a business name using the Name Reservation / Transfer / Cancellation Application
• File Articles of Incorporation pursuant to OH Rev Code § 1701.04 (2022) along with a fee of $99
• Prepare bylaws for your Ohio Corporation
• Apply for business licenses and permits

Incorporate in Ohio with ease!

Steps to Move an LLC to Ohio

Relocating a business to Ohio will require you to comply with state laws and follow different business processes. The state of Ohio has a strong business support system and provides numerous resources to help you form and operate your company with ease. Certain queries you may have regarding relocation, like whether Ohio allows domestication and the possible ways of moving an LLC to Ohio. There are three ways you can relocate. Let us look at each of the methods in detail.

Register as a foreign LLC

The first method that will facilitate the moving of your LLC to Ohio is to register it as a foreign LLC. This process is also known as foreign qualification. You can transfer LLC to Ohio using this method if you want to operate your existing company in the home state (state of registration). There will be different steps involved in moving your business to Ohio through foreign qualifications. The process is as follows:

• Hire and maintain a registered agent in Ohio for handling service of process pursuant to OH Rev Code § 1706.09 (2022)
• You can keep the existing name of your foreign LLC only if it is available. If the said name is unavailable, then you can choose a DBA or trade name by filing a Trade Name Registration application.
• File the Registration of a Foreign Limited Liability Company to transfer an LLC to NC through foreign qualification pursuant to OH Rev Code § 1706.511 (2022)
• Apply for necessary business licenses and permits

Apply for LLC foreign qualification in Ohio

Convert a Foreign LLC to an Ohio entity

The second option for moving your company to Ohio is through the process of entity conversion. This is also known as entity domestication in Ohio. You will be required to file a Certificate of Conversion pursuant to Ohio Revised Code §§1701.811, 1706.722, 1776.72, and 1782.4310. When you convert your existing company into a domestic limited liability company, you must file the necessary relevant organizational documents. You will also need to specify the converting entity type in the application. The certificate of conversion will be filed along with a fee of $99.

Dissolve the home LLC and form a new LLC in Ohio

The third option or method of relocating a business to Ohio is by dissolving your existing company and registering a new LLC in Ohio. You will be required to file a certificate or articles of dissolution, depending on the state. Different states have different laws, procedures, documents, and fees for dissolution. Some of the most common steps to follow during dissolution are:

• You need to get approval for the dissolution of your LLC through member consent
• You will need to file Articles or Certificate of dissolution in your home state
• File any outstanding claims as well as federal, state, and local taxes
• Publish a notice of dissolution if applicable
• Cancel business licenses and permits

• Appoint a registered agent in Ohio to handle service of process
• Conduct an LLC name availability search and reserve a business name pursuant to OH Rev Code § 1706.07 (2022)
• File Article of Organization pursuant to OH Rev Code § 1706.16 (2022) along with a fee of $99
• Prepare Ohio LLC operating agreement
• Open a business bank account
• Apply for relevant business licenses and permits

Register your LLC in Ohio Today!

Move Your Business to Ohio with IncParadise

IncParadise is one of the top registered agent services in Ohio. We provide a variety of services to fulfill different types of business requirements. We can help you with the process of moving your business to Ohio by facilitating dissolution paperwork in your home state, foreign qualification, as well as new business registration in Ohio.

Ohio Foreign Qualification

Every state offers distinct advantages, which is one of the drivers of foreign businesses moving or expanding to other states. When it comes to Ohio, the state provides plenty of reasons for you to apply for foreign qualifications in Ohio. You can benefit from overall lower taxes in this state. If you plan to incorporate a foreign entity, then there will be no state income tax. In fact, you will end up paying almost 5-10 percent less tax as compared to other states. Depending on the industry sector chosen, you can also find skilled STEM professionals and a talented workforce. They will help your company to achieve success eventually. Ohio foreign business registration means that you can also leverage the state business and transportation infrastructure. If this is not all, Ohio also offers numerous loan and grant programs as well as business incentive and tax credit programs.

What is Ohio’s foreign qualification?

Whether you are thinking of moving your existing company to Ohio or planning to expand operations, it is important to understand foreign qualifications in this state. The governing law for foreign entities in Ohio is the 2022 Ohio Revised Code, Title 17 – Corporations-Partnerships. According to state law, a foreign entity is any company that has been registered or incorporated in any other state. Such a company will have to undergo foreign qualification in Ohio in order to transact in this state. Let’s study this with an example:

Doing business in Ohio

If you are thinking of Ohio foreign corporation registration, then it is important to understand what doing business in Ohio refers to. Each state has its definitions and guidelines for transacting in the state. Some states consider having a new company branch as doing business, while others consider owning real estate.

• If your company is defending, maintaining, or settling any legal proceeding
• If you hold meetings of company partners in this state
• If your company maintains a single or multiple bank accounts in this state
• If you are selling your products or services through independent vendors or contractors
• If your company is foreclosing mortgages or collecting debts in Ohio
• If you are transacting business in interstate commerce

Ohio Foreign Qualification Process

If you have already registered an LLC, partnership, or a business corporation in another state but want to conduct business in Ohio then you will need to undergo foreign qualification in Ohio. It is important to note that all out-of-state businesses require an authority to conduct transactions in this state. If you operate your company without obtaining the required authority then your business will be considered to be breaking the Ohio Revised Code and can lead to potential penalties. Let us look at the process of Ohio foreign entity search and registration for LLCs and corporations.

Ohio Foreign Corporation Registration

If you are already operating a corporation in another state and want to explore opportunities in Ohio then you will need to apply for Ohio foreign corporation registration. This process is known as foreign qualification. It will be governed by the 2022 Ohio Revised Code, Title 17 – Corporations-Partnerships, Chapter 1703 – Foreign Corporations. You will have to obtain the authority necessary to transact business in this state. There are certain steps you need to follow, and they are:

1. Business Name

The first step towards Ohio foreign corporation registration is identifying a business name and registering it. The corporate name should comply with state laws and contain words like “corporation,” “incorporated,” or abbreviations like “Inc.,” “corp.,” and “co.” Once you have identified a name, it is important to conduct an Ohio foreign entity search, also known as a name availability search. This will ensure your chosen name is available for registration.

2. Registered Agent

Whether you are forming a new business or incorporating a foreign entity, your company needs to be compliant with certain state business laws. Ohio foreign business registration will be possible only if you continuously maintain a registered agent in the state for service of process. This is governed by OH Rev Code § 1703.19 (2022). We at IncParadise are one of the top Ohio registered agents and have helped several domestic and foreign entities incorporate into this state.

3. Foreign For-Profit Corporation Application for License

Once you have conducted an Ohio foreign entity search and registered your corporation’s name, the next step is to get the right authority. In most states, this is known as a certificate of authority, but in Ohio, it is known as the Application for License. This license is mandatory pursuant to OH Rev Code § 1703.03 (2022). You will not be able to transact business in this state without it.

Do you want to register a foreign Corporation in Ohio?

Ohio LLC registration

If you are already operating a limited liability company in another state then you will need to apply for an Ohio LLC foreign registration. This process will help you to expand your operations in this state. The foreign qualification is governed by the 2022 Ohio Revised Code, Title 17 – Corporations-Partnerships, Chapter 1706 – Ohio Revised Limited Liability Company Act, Section 1706.51 – Foreign Limited Liability Company Governing Law. The process for foreign qualification involves the following:

1. Business Name

A company cannot conduct its business without a proper name. Hence, it becomes important to register the name of your company if it’s an out-of-state entity. Registering the name will also ensure you are able to apply for Ohio LLC foreign registration. An Ohio foreign LLC name should contain words like “limited liability Company” or “limited company” or abbreviations like L.L.C or LLC. The chosen name should also be available, and this is possible by conducting an Ohio foreign entity search or business name search.

2. Registered Agent

One of the important aspects of any Ohio LLC foreign registration is the service of process. This is provided by a registered agent. The business laws have made it mandatory to hire and maintain a registered agent in the state pursuant to OH Rev Code § 1706.09 (2022). Registered agent services offered by IncParadise will not only help fulfill state requirements like service of process but also assist with other annual compliances. IncParadise is one of the top Ohio registered agents and has helped with several foreign business registrations in this state.

3. Registration of a Foreign Limited Liability Company

If you are planning to transact or conduct business operations in the state of Ohio, then you need to have proper authority to do so. If you transact business without proper Ohio foreign business registration, then there can be penalties. The process to register is by filing the Registration of a Foreign Limited Liability Company (Form-617) pursuant to OH Rev Code § 1706.511 (2022).

Want to form a foreign LLC in Ohio?

Need Any Assistance in Applying for Ohio Foreign Qualification?

Ohio offers a vibrant market, growing and diverse industries, a talented workforce, robust infrastructure, low taxes, and a low cost of living. The state provides support and resources to both domestic and foreign entities. As one of the leading registered agents in Ohio, IncParadise can assist you with the process of foreign qualification in Ohio for LLCs and corporations.

Doing Business in Ohio

There are over 900,000 small businesses operational in the state of Ohio and there are several reasons why entrepreneurs prefer this state. One of the top benefits is that your startup can leverage Ohio small business incentives implemented by the state and private organizations. You would be surprised to know that startups and small businesses in Ohio have been able to generate over $1.7 billion in terms of economic output, according to JumpStart’s latest economic impact report. Behind the success of small businesses is easy access to several funding opportunities, including Ohio small business loans and tax credit programs. Today, Ohio is home to several Fortune 500 companies, including Kroger, Cardinal Health, and Amazon, among others.

Why do businesses prefer doing business in Ohio?

As a first-time business owner doing business in Ohio for you can be quite beneficial. The state provides numerous benefits and advantages, especially to small businesses. To start with, the state has one of the lowest tax rates among all 50 states. The state has a thriving industry, diverse talent pool, robust transportation infrastructure, and enjoys high use of technology in most industrial and business environments to support innovation. You can even apply for Ohio small business grants, loans, and different forms of incentives. Let us take a look at some of the top advantages of conducting business in this state:

• State of Startups – The state of Ohio is considered one of the evolving startup ecosystems in the nation. Ohio companies have received over $1 billion in venture capital investment consecutively for the past 3 years. This is because the state has provided the platform and resources, including Ohio small business grants. The startup ecosystem will help you bolster cross-sector collaborations, like connecting your company to necessary expertise and talent. This will allow you to take your innovation-driven research and development to the next level. This will also ensure that doing business in Ohio has reduced challenges for your company.
• Cost of Living – One of the important factors that plays a key role when it comes to new business formation or moving a business to this state is the low cost of living. The cost of living takes into account several components like housing, utility bills, cost of food, healthcare etc. If you compare the cost of living in Ohio with the national average, then it is 8 percent lower. Similarly, the housing costs are 22 percent lower while the utility costs are 3% lower than the national average. Some of the cities with low cost of living and strong business infrastructure for your business include Columbus, Cleveland, and Cincinnati.
• Diverse Talent Pools – Companies prefer doing business in Ohio due to the availability of a diverse talent pool. The state believes that Science, technology, engineering, and math (STEM) will be the primary driver of its economic future. For example, the Ohio STEM Learning Network aims to deliver high-quality professional development and educational support to inspire the next generation of innovators in the state. Apart from this, it is home to several colleges, universities, and technical institutions that create and promote talent.

Small Business Incentive Programs and Grants in Ohio

When you start a new company in Ohio, you can leverage advantages, including benefiting from a wide variety of Ohio small business grant programs. These programs have been created to help new businesses or entrepreneurs move their companies from other states financially. These programs can be categorized into different segments. The segments are small business grants or Ohio small business loans, economic development grants, and state tax credits. Let’s study them in detail.

Small Business Grants in Ohio

Whether you form a small company or large enterprise, Ohio small business incentives will provide you with a distinct advantage. The availability of small-business grants can provide financial support in the initial stage of your business operations. A grant is a type of financial award with the objective of facilitating business goals or incentivizing performance. Grants are Ohio small business loans where you are not required to pay it back. Here is a list of the most popular grant programs in the state for you:

• The Kitty Fund – If you are a mom entrepreneur or mompreneur, then the Kitty Fund is one of the first Ohio small business grants to apply for. This is a national grant program. It is targeted at mother-owned businesses with at least 2 employees or more. You can apply for this micro-grant program here and receive an award of $1,000.
• Warrior Rising Grant – If you are a veteran planning to start your company in Ohio, the Warrior Rising Grant can be quite beneficial for you. It is considered amongst the top Ohio small business loans or grants. Warrior Rising is a non-profit organization whose objective is to empower veterans. As a veteran, you can apply for their grant program, and the grant amount awarded can be a maximum of $20,000.
• Fearless Strivers Grant – The Fearless Strivers Grant has been created specifically for black women-owned businesses. Each year, they conduct a skill-based contest, which you can participate in. The maximum grant amount of $20,000 will be divided among four participants or small businesses.
• Workplace Wellness Grant Program – This is a type of Ohio small business grants program that is targeted at businesses with 50 or fewer workers, especially those based in high-risk industries. You can participate in this program if your company has less than 50 workers. This program will also be applicable to you if your business operates in such an industry as construction, automotive repair and service, or manufacturing, among others. This program by the Bureau of Workers’ Compensation (BWC) will assist you in creating and implementing a workplace wellness program. As a part of this program, you can receive $300 per participating employee. This payment is made over a period of 4 years, and you can receive a maximum amount of $15,000 per employee policy.
• Food Supply Chain Guaranteed Loan Program – If you are seeking Ohio small business loans, then the Food Supply Chain Guaranteed Loan Program by USDA is a promising program. It is important to understand that you will have to qualify to be able to get the loan. Loans are guaranteed and can be up to a maximum of $40 million for companies or lenders who qualify. You will be able to qualify if you or your institution is planning to finance food systems projects. The list of eligible lenders includes credit unions, CDFIs, banks, Farm Credit institutions, loan funds, and others.
• Women-Owned Businesses Amber Grant – As the name suggests, Amber Grant started in 1998 and is targeted at women-owned businesses. If you have an idea and want to transform it into a company, then this may be the right grant for you. Ohio small business incentives and grant programs are currently playing a key role in supporting and promoting women’s entrepreneurship. You can apply for an Amber Grant after registering your business and can get an award amount of up to $10,000. You can even be eligible for a $25,000 grant or even the $35,000 grant normally given by the end of the current year.
• Restaurant Disaster Relief Fund – Natural calamities can happen just about anywhere. They are unpredictable. Imagine you have started a restaurant recently by taking Ohio small business loans, and then a natural disaster strikes. This could be in the form of an earthquake, fire, hurricane, or flood, among others. This is where the Restaurant Disaster Relief Fund can help you get back on your feet faster. If you or your business is eligible for this grant, then you can get a maximum of $10,000 for utilities, rent, maintenance, and other essential supplies.

Economic Development Grants

Each state offers in-house economic development grant programs. If you start a business in Ohio, you can benefit from the Economic Development Grant Program, which is overseen by the Department of Planning & Community Development (DPCD). If you have failed to obtain Ohio small business loans or funding, you can get first—and second-floor office spaces in prime locations through this program. As the name suggests, this is an Ohio small business grants program that promotes economic development, job creation, and business expansion.

Are you thinking of starting a New Business in Ohio?

State Tax Credits

One of the factors that have an impact on business finances is that of taxes. Each state in the USA has its own tax structure and tax rates. When you start an Ohio company, it will be subjected to some form of taxes. This is where tax credits can provide much-needed relief. Basically, a tax credit refers to a certain amount of money that you, as the taxpayer, can subtract directly from the taxes owed by you or the company. This is an important type of Ohio small business incentives. The two important state tax credits that you can benefit from are:

• Ohio Job Creation Tax Credit – This type of tax credit can be quite beneficial to your company if you are going to hire employees. It is a refundable and performance-based tax credit. This tax credit is calculated as a percentage of the created payroll and is applied to your company’s commercial activity tax (CAT) liability. Every company or individual doing business in Ohio has to file commercial activity tax. Now, if you create at least 10 jobs within a period of three years with a specified minimum annual payroll, then your company will be eligible for this tax credit.
• DataCenter Tax Exemption – This is one of the top Ohio small business incentive programs. If you open an IT infrastructure company or a data center (physical facility) that houses servers, routers, storage systems, firewalls, and application-delivery controllers, then this tax exemption will be beneficial. This is also known as the Ohio Data Center Tax Abatement program. You will need to qualify for this exemption first. It will provide a sales-tax exemption rate as well as a term which may offer a partial or full sales-tax exemption on purchases related to eligible data center equipment. The approval for this tax exemption is provided by the Ohio Tax Credit Authority.

Ready to Start a Business in Ohio?

Whether you start a sole proprietorship or a limited liability company, every business needs some amount of financial assistance upfront or in the operational stages. Ohio small business grants can provide you with the required initial funding. There are a variety of incentive and funding programs implemented in the state that provide Ohio small business loans as well.

Ohio Business Tax

Most forms of businesses, like LLCs and corporations, may be required to file annual tax returns at the federal and state levels. When we talk of Ohio business tax, then it is important to understand that this does not refer to a single tax but several forms of taxes that are levied on various entities within this state. Business taxes, in general, are small charges that the state or federal governments place on the earnings, profits, or capital of a business. Some taxes will have a flat rate, while for some taxes, you may need to use the Ohio business tax calculator. There is no one tax for all business entities, but taxes may vary according to entity structure, activity, earnings, and even location.

What taxes do businesses pay in Ohio?

Entrepreneurs consider the state of Ohio to be one of the best states in which to start a new business. This is more so because of several factors, including strategic location, rich history, robust transportation infrastructure, talented workforce, and diverse culture. On top of this, businesses can benefit from tax credits and other forms of small business incentives, including the Ohio Opportunity Zones Tax Credit. One of the salient advantages of incorporating in this state is that there are corporate income tax or Ohio Corporation taxes.

Commercial Activity Tax (CAT)

The Ohio commercial activity tax (CAT) is the most important state tax that new and existing businesses are required to file. This is also known as an annual privilege tax that is measured based on taxable gross receipts emerging from most forms of business activities. This can be categorized as Ohio LLC Taxes or corporation taxes as it is levied for the privilege of doing business in the state of Ohio.

Sales and Use Tax

One of the important Ohio corporation taxes or LLC taxes is the sales tax as well as the use tax. According to the 2022 Ohio Revised Code, Title 57 – Taxation, OH Rev Code § 5739.01 (2022), essentially, sales tax will be levied on individuals and businesses that are involved in selling, buying, or using tangible personal property. It is also applicable to certain services like laundry and dry cleaning services, private investigation and security services, and telecommunications services, among others. The sales tax rate state-wide is 5.75 percent, although certain cities, counties, or even local or municipal authorities may choose to apply additional sales and use tax rates that vary from 0.75 to 2.25 percent.

Local Ohio taxes

Apart from the use tax, several different forms of local taxes may be applicable to businesses operating in this state. The local Ohio business tax will vary according to the business activity.

Are you thinking of forming a new company in Ohio?

How are Ohio Businesses taxed?

Whatever entity structure you prefer to operate in the state of Ohio, one of the foremost annual requirements will be that of filing Ohio business tax returns. There are different types of taxes that any new or existing company may be required to file, although the good news is that Ohio corporation taxes, like the corporate income tax, are nonexistent in this state. You may be required to file more than one form of tax return, depending on the business activity and location. Let us look at the various entities and their tax obligations in Ohio.

Taxes for an LLC

If you are planning to start a limited liability company in Ohio, it will be considered a pass-through entity for taxation purposes, and hence, Ohio LLC taxes or state taxes will not be applicable. This simply means that the income will pass through to the owners and other members, and they will have to file individual income tax returns. It is important to note that Ohio has a progressive income tax.

Taxes for a C Corporation

If you are considering establishing an Ohio C Corporation, your company will be subject to the Ohio Commercial Activity Tax (CAT). This is a type of annual privilege tax that applies only if the taxable gross receipts from most business activities are more than $150,000.

Taxes for S Corporation

If you elect S Corporation tax status in Ohio, although it will not be subjected to corporate income tax but is a pass-through entity, the owners or shareholders will be required to file personal income tax. An S Corporation will be subjected to Ohio commercial activity tax (CAT) as well. This is a type of mandatory tax, although applicable only if the gross receipts of the said company are more than $150,000 annually.

Taxes for a Sole Proprietorship

One of the easiest businesses that you can form and operate in Ohio is a sole proprietorship. A sole proprietorship is a single owner-run business and is, hence, considered to be a small business. As a sole trader, your business will be subjected to Ohio commercial activity tax, as this privilege tax applies to all types of entities formed in this state. Apart from this, you will also be required to file graduated individual income tax with the rate varying from 2.765 percent to 3.990 percent. The taxes for a sole proprietorship are quite similar to that of Ohio LLC taxes, and hence you may be required to file local taxes like the sales tax or the use tax.

Taxes for Partnerships

If you form a partnership company in the state of Ohio, then such a company will be required to file taxes similar to Ohio LLC taxes. Ohio treats partnerships as pass-through entities, and hence partners or owners will be required to file their individual tax returns based on the income earned by the said business. A partnership company will be required to file Ohio commercial activity tax if its gross receipts are over $150,000. They will also be subjected to withholding taxes if the company has employees. Locally, sales and use tax may also be applicable.

Ready to Incorporate your Ohio Company?

You can form different types of entities in Ohio, from a partnership company to a C Corporation. You can also elect for S Corporation status. The new business formation process can be exhaustive depending on the type of structure you choose. You will also need to file all applicable Ohio business taxes each year. IncParadise, one of the top incorporation service providers in the state, can provide you with meaningful assistance. We can help to register your LLC or corporation in Ohio.

Doing Business As or DBA in Ohio

Ohio is home to several small companies, startups, home-based businesses, and even medium-sized enterprises that have successfully sustained themselves and are earning profits. You can also choose from various structures like partnerships, LLCs, and sole proprietorships, among others. When you decide on the structure, the next step will be to choose a business name under which your company will operate. You can either choose to use the owner’s legal name, Sam Anderson LLC or LLP as the business name or proceed with filing a DBA in Ohio like Anderson’s Pizza. If you are wondering how to look up a DBA in Ohio, you must go through a specific process. The first step, though, is to identify the conditions under which you can use a DBA in this state.

What is DBA in Ohio?

Most first-time entrepreneurs often confuse between a DBA name and a traditional business name. Business owners may sometimes ask, why apply for Ohio DBA online instead of reserving a business name with the state? In reality, you can choose to go with either. DBA is the abbreviated form of ‘doing business as’ and is also known as a trade name, fictitious name, or assumed name. It is considered to be a registered name that is different from the legal name of the owner. Most single-ownership companies or partnerships prefer to file an Ohio DBA online application for a new business or start another company connected to the parent company. Let’s look at an example to understand a DBA name.

When do you need a DBA?

A business name is the identity of any company, and without it, no business can operate in the state of Ohio or the nation. Hence, it becomes important to file a trade name in Ohio after ensuring that the said name is compliant with all state laws. DBA is known as a trade name or a fictitious name in the state of Ohio and is governed by the 2023 Ohio Revised Code, Title 13 – Commercial Transactions, Chapter 1329 – Labels and Marks, Section 1329.01 – Registration of Trade Name Definitions – Registration of Trade Name or Report of Fictitious Name.

• Operating Multiple Businesses – Any company, like a corporation or a limited-liability company, may need to operate multiple businesses as a part of its expansion or diversification plan. In such a scenario, the only way to avoid creating separate legal entities for each type of business is by filing a DBA in Ohio. Essentially, the reason why businesses file a trade name in Ohio is to enjoy the benefit of being able to focus on the expansion of the business while minimizing costs and paperwork.

  For Example: Emily Watson set up a corporation or an LLC with a generic name like Emily Watson LLC. She now plans to open several restaurants or an e-commerce store. She will need to conduct an Ohio trade name search and file a trade name application for each restaurant or e-commerce store.

• Your Business Structure – The structure of a business plays a key role in defining the business name. If you establish a sole proprietorship or general partnership company, you can use your own name or legal name. If you don’t want to use your own name, filing an Ohio DBA online application becomes important. A trade name can also be used by other entity structures like limited-liability companies and C corporations.

Filing DBA in Ohio for LLC and Corporation

A DBA (doing business as) is known as a trade name in Ohio. If you want to start a sole proprietorship or a limited liability company and don’t want to use your legal name, then you will need to apply for Ohio DBA online. There is a specific process for filing a trade name, including a name availability search or an Ohio trade name search. The process and the fee may be different from that of the traditional business name reservation process.

Do Ohio Trade Name Search

If you are planning to register a trade name in Ohio, then the first step is to identify a proper name. This will be followed by conducting a DBA name search. If you are wondering how to look up a DBA in Ohio, then we will take you through it, as it is almost the same as conducting a name availability search for traditional business names. There are certain aspects that you need to consider, and they are:

• In order to file a trade name in Ohio, you need to follow the naming rules and regulations as prescribed by the office of the Secretary of State.
• In the state of Ohio, fictitious names are not required to be distinguishable on the records, so it is easier to conduct a name availability search.
• You can also conduct a search for trademarks or federally registered names using the trademark database also known as Trademark Electronic Search System (TESS).

Register your Ohio DBA

Once you have chosen a fictitious name for your company after conducting an Ohio trade name search, the next step is to apply for registration of the name. Registration of a trade name is an important process as it will help notify the general public regarding the existence of your company and also inform them that you are conducting your business under the said assumed name. The process for filing a DBA in Ohio is the same for both domestic and foreign entities.

• Regular Filing (non-expedited)
  P.O. Box 670
  Columbus, OH 43216
  Phone – 614.466.3910

Register your Ohio DBA with ease!

Managing Ohio DBA

Once you apply for Ohio DBA online or offline, it will help facilitate your company’s ability to transact within this state using the said trade name or fictitious name. Each state has its own laws and regulations pertaining to a trade name or DBA. These laws are also applicable for the renewal, changing, or canceling of an assumed name in a specific jurisdiction or state. Let’s look at the various processes applicable to managing Ohio DBA online applications.

How to renew Ohio DBA?

A trade name or DBA (Doing Business As) name is valid for a period of 5 years in the state of Ohio from the date of registration or report of such a name. Normally, the office of the Secretary of State shall notify the company or individuals who have registered reported fictitious names or trade names within the six months preceding the expiry date of the said trade name pursuant to OH Rev Code § 1329.04 (2023). You can file an Ohio DBA online application for renewal or download form 523a – Renewal of Trade Name or Fictitious Name Registration. The form should be accompanied by a Filing Form Cover Letter and a renewal fee of $25. The cost is the same for all entities.

How to change Ohio DBA?

Once you file a trade name in Ohio, it is registered for a period of 5 years. Now, within 1 year, if you want to change the existing DBA, is it possible? Actually, the state of Ohio only allows certain updates to be made to the trade name, such as changing the registrant of the said trade name. This is possible through using the Change of Registrant Name (form 558). If you want to change the DBA name, then you will need to cancel the existing DBA and go through the entire process of applying for a new trade name.

How to cancel Ohio DBA?

If you are asking yourself the question, how do I look up a DBA in Ohio for cancellation, then the answer lies with the office of the Secretary of State! According to the 2023 Ohio Revised Code, OH Rev Code § 1329.08 (2023), the secretary of state can cancel a DBA if they receive a voluntary request in writing for cancellation of the trade name registration from the registrant of record. The form generally used for cancellation is the Name Reservation / Transfer / Cancellation form (form 534b). The cancellation fee is $25.

Need Any Assistance in Filing Ohio DBA?

The process to apply for Ohio DBA online or offline requires you to provide precise information while ensuring full compliance with the 2023 Ohio Revised Code, Title 13, and federal trademark laws. The process of conducting an Ohio trade name search can be quite complex, and this is where IncParadise can assist you. We have expertise and knowledge regarding Ohio business regulations and can help you file an Ohio DBA quickly and efficiently.

Sole Proprietorship in Ohio

There are over 28 million non-farm sole proprietors in the USA today and this includes freelance professionals, independent contractors, and different types of self-employed individuals and economy workers. According to the Internal Revenue Service (IRS), there has been a 1.9 percent increase in this type of entity since 2018-2019. There are several reasons why more and more entrepreneurs prefer to form a sole proprietorship in Ohio, and one of the prime reasons is that of diverse industries. You can create and successfully operate this type of entity in any industry, from advanced manufacturing to aerospace, advanced mobility, logistics & distribution, cybersecurity, financial services, and technology, among others. There are certain other factors that also aid in the growth of a sole proprietorship, like the availability of a talented workforce, a robust startup ecosystem, low business costs, and access to state incentive programs.

What is a sole proprietorship in Ohio?

If you are wondering how to start a sole proprietorship in Ohio, then it’s important to gain some insight into the type of entity it is. A sole proprietorship is also known as an individual entrepreneurship or sole tradership business and has been on the rise as far as new businesses formed in the state of Ohio are concerned. This entity type can be established easily as opposed to other entity types like a limited-liability company or a C Corporation. If you want to start a sole proprietorship in Ohio, then this type of entity will be considered an unincorporated business. This simply means that the owner of such a company will be responsible for any liabilities and profits earned by the said entity. A sole trader business will also have a different type of tax structure and will not be required to file any corporate taxes.

Important features of sole proprietorship in Ohio

When you search for a sole proprietorship in Ohio, you will find that this type of company is always operated independently and managed by an individual. This is considered to be quite a favored structure as it has several promising features and characteristics. Some of the top key features are:

• As a sole proprietor, you will enjoy complete autonomy and full control over your entire business, from strategic to operational processes, including decision-making.
• A sole proprietorship in Ohio will enjoy a higher degree of privacy as such a business is not obligated to disclose confidential reports to state government agencies or authorities.
• When you form this type of entity, since you are the company’s owner, you will not have to share any profits earned by the company, unlike in a corporation or partnership.
• One of the salient features of a sole proprietorship is that it is required to fulfill minimal or basic administrative and filing obligations; thus, documentation in such entities is minimal.
• When you look for the advantages of a sole proprietorship in Ohio, you will find that this type of structure benefits small businesses, including home-based entities.
• The tax structure of a sole proprietorship is quite simple and hence different from that of other entity structures.
• The process of dissolution or closure of a sole proprietorship in Ohio is also quite simple.

Steps to Start Sole Proprietorship in Ohio

One of the most important questions that entrepreneurs are confronted with is how to start a sole proprietorship in Ohio. Although this type of entity is easy to form, certain state and business requirements must be fulfilled to ensure the smooth operation of the company in the long run. Let’s examine the important areas to focus on before starting a sole proprietorship in Ohio.

1. Prepare a business plan

Once you have decided to form a sole proprietorship in Ohio, it becomes extremely important to list every aspect of your business in order to create a clear blueprint. This process is integral to your query of how to start a sole proprietorship in Ohio and will help you identify state resources as well as the operational and financial aspects of the business. The plan will provide a brief overview of every aspect, from the business idea to products or services being offered, unique value propositions, target customers, and competition. The sole purpose of creating a business plan or a strategic plan is to ensure good decision-making and enable maximum resource allocation. Some of the most common aspects of a sole proprietorship business plan are:

• Executive Summary
• Business Concept
• Company Description
• Competition and Market Analysis
• SWOT analysis
• Marketing and Sales Strategy
• Product or Service Line
• Organization and Management
• Operational Plan
• Financial Projections

2. Choose an Ohio business name

If you are planning to start a sole proprietorship in Ohio then one of the first requirements will be reserving or registering a business name. A sole proprietorship company can use the name of the owner as the company name. Such a name will help create a brand image or identity, e.g., if you choose your company name as John Dixon PC Repairs, then your targeted audience will know the type of service you offer. This will help in creating a niche in the market. This will also ensure proper communication of business objectives and the nature of business activity to all present and future customers. It is also important to search sole proprietorship in Ohio for the availability of the chosen name. Here are some easy tips that you can follow while selecting a sole proprietorship name:

• Follow Ohio state’s naming guidelines
• The sole proprietorship name cannot be similar to that of any other company or competitor
• Try to avoid company names that are hard to pronounce or spell
• The chosen name should be easy to remember
• You should consider the products or services being offered when choosing a name
• When you think of a name, ensure it is appropriate and remains relevant as the business grows or evolves
• Always conduct a search for sole proprietorship in Ohio for availability as a domain name for a website
• You can use AI-powered business name generators like Namelix, BrandCrowd, Wix, Renderforest, etc., to create brandable business names

3. File a trade name

You can form a sole proprietorship in Ohio using the owner’s name (your name) as the name of the company. However, if a sole proprietorship company wishes to conduct its business under any other name that is different from that of the owner’s name, then such a company will be required to file an Ohio trade name with the Secretary of State’s office. This is also known as a “DBA” (doing business as) or fictitious name. There are certain aspects to consider while choosing a trade name and name registration. Let’s look at some of them:

• You will need to follow trade name or fictitious name rules and regulations
• Choosing a trade name or Ohio DBA name and filing the application will be governed by OH Rev Code § 1329.01 (2023)
• It is important to ensure that the chosen name is not similar to that of any other company in state database
• Conduct a trade name search or a business entity search
• If your chosen name is available, then file the Ohio trade name application

Do you want to start a sole proprietorship in Ohio?

4. Get EIN

If you start a sole proprietorship in Ohio, then you will have to file personal income tax along with other state taxes. Since a single individual runs a sole proprietorship company as the owner, hence filing of income taxes is done by using a Social Security Number (SSN). Alternatively, obtaining an Employer Identification Number (EIN) can also be quite beneficial. According to the Internal Revenue Service (IRS), there are certain criteria to be fulfilled by a sole proprietorship in order to apply for an EIN, and they are:

• When a sole proprietorship company hires employees
• The company plans to open a business bank account
• If you have a Keogh plan
• You have to file excise tax returns
• When you convert or change the entity structure from a sole proprietorship to a partnership or LLC
• If you file Chapter 7 (liquidation) or Chapter 11 (reorganization) bankruptcy

5. Obtain necessary licenses and permits

When you create a how-to-start a sole proprietorship in Ohio checklist, one of the important state processes to include is that of business licenses and permits. The importance of licensing lies in the fact that it ensures you are able to operate your company or conduct your business smoothly. Different states have different licensing requirements, and Ohio licensing can vary from the state level to the local or municipal level. When you file a sole proprietorship in Ohio, you may need to apply for and obtain the following types of licenses:

• Professional licenses
• Sales Permits
• Vendor’s license
• Local Zoning Permits

6. Open a bank account for your Ohio business

When you start a sole proprietorship in Ohio, one of the most important areas of your business will be financial transactions. More often than not, sole proprietors prefer to use their personal savings accounts to carry out business-related transactions, which can create complexity in the future, especially when it comes to filing taxes. Hence, if you apply for a business checking account, you can maintain a separate account for all company-related financial transactions. This will also ensure proper organization of all expenses, thus making the entire process of getting audited by the IRS easier. If you open a business bank account, it will increase your credibility amongst your clients and suppliers.

7. Report and pay taxes

Generally, the tax requirements would vary according to the business structure chosen and operated. If you form a sole proprietorship in Ohio, then the taxes of this type of entity may be different from those of a corporation. Since it is a single-owner entity, the profits generated will be taxed as personal income. You will be required to file graduated individual income tax, and the rate ranges from 2.765 percent to 3.990 percent. There are certain jurisdictions in the state where local income taxes have to be filed. In order to identify such areas, you will need to search sole proprietorship in Ohio for local taxes. If your business activity focuses on selling certain products or services, then you will have to file sales and use tax as well as Commercial Activity Tax (CAT). You may also be required to file self-employment tax at a rate of 15.3 percent.

Ready to Start a Sole Proprietorship Business in Ohio

If you have made a decision to start a sole proprietorship in Ohio, then it is definitely quite easy to form and operate. You will not be required to register this type of entity with the office of the Secretary of State, unlike other types of entity. It is important to remember, though, that there are several state requirements, including annual compliances, that a sole proprietorship in Ohio needs to fulfill in order to enjoy a good standing with the state.