Most of the states are requiring every corporation & LLC registered in the state to file annual reports with the names of officers.

Ohio Annual Fees

Taxpayers generally must compute the tax on both the net worth base and the net income base and pay the tax on the base that produces the greater tax. The maximum net worth base tax liability is $150,000. However, different rules apply to financial institutions and qualifying holding companies.

Ohio Annual Reporting Requirements

Franchise Tax Report – a corporation organized for profit is subject to the corporation franchise tax for each calendar year (tax year) that on the first day of January of that calendar year the corporation:

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Ohio commonly referred to as the Industrial Capital of the United States presents just the right platform for businesses. Company incorporation in Ohio is beneficial as the state is ranked 3rd in the country for friendliest tax environment according to a report by the Quantitative Economics and Statistics Practices (QUEST). The total exports of the state amounted to 3.2% of total US exports and are home to 25 Fortune 500 companies. Some of the companies on this “crème de la crème” list include Cardinal Health Inc., Kroger Co., Procter & Gamble, Marathon Petroleum, Macy’s, Goodyear Tire & Rubber, Parker-Hannifin, and Fifth Third Bancorp among others.

Why Choose Ohio for Incorporation?

There has been a steady growth in incorporation in Ohio especially of small businesses thanks to the strong tax reforms. The unemployment rate is at 4.7% and gradually showing healthy signs as more and more people are getting jobs.

Now let’s take a look at some of the salient benefits that are responsible for fuelling growth of small businesses:

• Ohio Foreign Trade Zone: If you set up a company in Ohio under the Foreign Trade Zone (FTZ) program then you can benefit from lower costs, which in-turn will boost business profits through a variety of duty savings benefits. The program is overseen by the U.S. Department of Commerce. Information & Application
• Grants, Loans, and Tax Credits: There are a variety of business incentives made available to start-ups as well as existing business entities in the form of grants, loans, bonds, and tax credits. These incentives are classified under different programs implemented by the Ohio Development Services Agency. Some popular programs include:
  – State Small Business Credit Initiative (SSBCI)
  – Advanced Manufacturing Program (AMP)
  – Conversion Facilities Tax Exemption
  – Collateral Enhancement Program (CEP)
  – Innovation Ohio Loan Fund
  – Ohio Brownfield Fund

How do you incorporate in Ohio?

What is the process of setting up a company in Ohio? What type of documentation is required? Can the registration documents be filed online? If you are confronted with these questions then the following steps will help you understand how incorporation works in Ohio:

Type of Business

What type of business do you want to form? You can choose to form a domestic or a foreign Corporation or any other business like a domestic or foreign limited liability company, partnership, Limited Partnership (LP), Limited Liability Partnerships (LLP), and Professional Associations. The first step towards company incorporation in Ohio is choosing the type of business you want to form.

Business Entity Name

What is the next step towards company incorporation in Ohio? The next step is to identify and reserve a name and this can be done as follows:

• Naming Requirements: According to OH Rev Code § 1705.05 for LLC and OH Rev Code § 1701.05 for corporation, a business name should contain the words “corporation”, “incorporated”, “limited liability company” or abbreviations like “corp.”, “inc.”, “ltd.”, “L.L.C.”, ”Ltd., ” or similar abbreviation.
• Business name search: You need to search for a business name that is not in use currently. You can conduct a name availability search here.
• Name Reservation: Once you have identified a business entity name, you can reserve the name pursuant to Ohio Revised Code §§1701.05(E), 1702.05(E), 1703.06, 1705.05(E) and 1746.06(D). You will have to submit Form 534B with the Secretary of State for name reservation and it will be valid for a period of 180 days from the date of filing.
• Trade Name/Fictitious Name Registration: if you set up company in Ohio as a foreign corporation or LLC the you will have to register the trade name pursuant to Ohio Revised Code §1329.01(B)(4).

Choose a Registered Agent

Whether you form a corporation or an LLC business entity, in order to transact business in the state of Ohio, you will have to maintain a registered agent pursuant to OH Rev Code § 1705.06 for LLC and OH Rev Code § 1701.07 for Business Corporations.

We are one of the respected registered agents in Ohio and will be responsible for initiating incorporation in Ohio through processing of your “Articles of Organization”, and “Articles of Incorporation” for domestic entities and “Application for Registration” and “Application for License” for foreign business entities.

Articles of Incorporation and Application for License

You will be required to file “Articles of Incorporation” pursuant to OH Rev Code § 1701.04, if your business is a domestic corporation. You will have to file a “Application for License” pursuant to Ohio Revised Code §1703.13, if it is a foreign business entity. In order to streamline the process of incorporation in Ohio, we can file documents on your behalf through the online process or through an expedited process.

Date Stamped Copies

As a part of the process of company incorporation in Ohio, we will ensure, you receive date-stamped and filed copies that verifies that the state has filed as well as formed your corporation.

Costs and Fees associated with Ohio Incorporation

What would it cost to set up a company in Ohio? Check Fees here!

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The Buckeye State of Ohio provides not only a positive business environment but also financial support and business incentives to help small and medium sized enterprises to grow and expand. You can register a start-up company in Ohio in the famed Columbus Region as it is home to global mega brands like Victoria’s Secret and Honda. Ohio has been ranked #3 in business climate and #9 as a logistic hotspot. Some of the key industries in the state include Advanced Energy & Environmental Technologies, Agriculture and Food Processing, Motor Vehicle and Parts Manufacturing, Distribution and Logistics, Aerospace and Aviation, and Bioscience and Bio-products.

What industry would you like to set up your business in?

Advantages of setting up an LLC or Corporation

One of the reasons why there are over 940,000 businesses registered in Ohio is the availability of dedicated and skilled work force, strong transportation infrastructure, and a variety of business incentives. The business climate drives the need to register a new business in Ohio and today, the private sector consists of more than 921,000 employers and they have hired almost 50.4% of the non-farm workforce.

Advantage#1: Salient benefits of Corporation or LLC

Corporation

• Tax incentives & Credits: If you register a new company in Ohio, you will benefit from:
  – No state corporate income tax
  – No inventory tax
  – No personal property tax
  Apart from this, you can leverage the various tax credits available including the Ohio Job Creation Tax Credit. As part of this program, you can derive refundable tax credit on creating a minimum of 10 new jobs within a span of 3 years
• Pass through taxation: If you register a new company in Ohio as an S corporation then the corporation or firm will not pay any income tax. Instead, the income or loss of the corporation will be passed on to the stockholders.
• Independent Life: One of the salient advantages of an S Corporation in Ohio is that it enjoys an independent life. The death or incapacitation of a stockholder will not disturb operations of the business.

LLC

• Loan Programs: If you register a limited liability company in the state of Ohio, you can benefit from different forms of financial assistance like loan programs. Some of the prominent loan programs that exist include:
  – Business and Industry Guaranteed Loans (USDA)
  – 166 Direct Loan (Development Services Agency)
  – Certified Development Company, a 504 loan program (SBA)
  – Basic 7(a) Loan Guarantee (Small Business Administration)
  – Rural Business Development and Opportunity Grants (USDA)
  – Community Connect Grants (USDA)
  – Community Development Program (Ohio Development Services Agency)
• Limited Liability: If you register a new business in Ohio as an LLC then you will be able to enjoy limited liability protection. This means claimants can sue the LLC and not the owner or investors.
• Flexible Profit Distribution: An LLC has the benefit of being able to select different ways of distribution of profits.

Advantage#2: Business Incentives

There is a variety of business incentive programs available for small and medium enterprises or start-up companies in Ohio. Let’s look at some of the top programs in Ohio.

• Ohio Enterprise Zone Program (OEZ): The Ohio Enterprise Zone Program is being administered by municipal as well as county governments. If you register a new company in Ohio EZ then you can leverage the real and personal property tax exemptions offered by the program. You can also benefit from the tax incentives especially on non-retail projects as well as corporate franchise tax benefits. You can choose from two types of Enterprise Zones, which are Distress Based (Full Authority Zones) and Non-Distress Based (Limited Authority Zones). More Information
• Ohio New Markets Tax Credit Program: The Ohio New Markets Tax Credit program provides tax incentives to businesses that are situated in low-income communities. A startup company Ohio can also receive below-market, flexible, or non-traditional loans for their projects. More Information

Are there any Disadvantages of Incorporating in Ohio?

When you register a new company in Ohio, one thing is for sure: the state offers one of the best business environments and a variety of funding and incentive programs. Are there any disadvantages? There are only a few! Disadvantages are mostly limited to the type of business entity you form like an LLC can get dissolved when a member dies or if it undergoes bankruptcy. Similarly, the process of incorporation may lead to higher overall taxes.

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Now that you have registered or are planning to register your business in the state of Ohio, what other documents might be required for the business to become operational? It is mandatory for each business in the state to register with the Federal Internal Revenue Service (IRS) as well as with the Ohio Department of Taxation. Apart from this, you will require a business license or permit to operate within the state.

It is important to know that there are certain licenses issued by the state of Ohio while for certain types of services, an Ohio company license may be issued by the city or county. Depending on the type of business, you may even require more than one license.

Ohio Business License Requirements

How do you obtain a business license in Ohio? What type of documentation is required? Who issues the license? These are some of the important questions that you might be confronted with. Hence, we have created a small guide to provide an insight into how to get a license or permit in the state. It is also important to note that you may require one or more licenses or permits depending on the type of business.

The following steps will guide you towards acquiring an Ohio company license.

Step#1: The Industry or Business Type

The type of industry or the activities of a business entity is an integral factor towards determining whether your business license will be issued by the state departments or the city or county.

In order to understand this, let us take a look at some examples:

• Public Accounting Firm – There are two types of public accounting firms and they are attest and non-attest (tax or consulting). Either type of public accounting firms require a business license in the state.
  Managed by: Accountancy Board of Ohio
• Gaming-Related Vendor – According to Ohio law (ORC 3772.01 (L) & OAC 3772-6), if your business is that of a “Gaming-Related Vendor” then you will need to apply for an Ohio company license. The license can only be applied for after suitability investigations carried out by the Division of Licensing and Investigations is approved.
  Managed by: Ohio Casino Control Commission
• Adult Education – A company or agency that is responsible for imparting adult education or offer Adult Education programs also known as Adult Basic Literacy Education or ABLE program. Such a business entity will require a permit.
  Managed by: Ohio Department of Education
• Child care centers, Family care homes – If you are planning to start a child care or day care center then the business license will be issued by the respective state department.
  Managed by: Ohio Department of Job and Family Services

Note: The fee for license or permit varies according to the type of business or industry.

Step#2: Licenses issued by City/County

If your business or industry type doesn’t fall under a statewide license project then you will have to check with the local city or county office. An Ohio company license can also be issued by local counties or cities in which the business is located. Let’s look at an example to understand how this works.

Place: Summit County, Ohio

If you are planning to establish a “Food Service Operation” or start a “Retail Food Establishment” in Summit County then you will have to apply to the Summit County Public Health (SCPH) for a business license. There are two types of retail food establishment that are issued licenses by county office and they are:

• Food Service Operation (FSO): This type of business includes restaurants, caterers, fast food operations, etc.
• Retail Food Establishment (RFE): This type of business includes grocery stores, carry outs, gas stations, pizza shops, micro-markets, etc.

The other types of businesses in the food establishment or service industry that will require a business license in Summit County include:

• Mobile Food Service Operation
• Temporary Food Operation
• Food Vending Machine

Fee

There is an initial plan review fee of $375.00 . This has to be paid to Summit County Combined General Health District.

Plan Review and Application

Step#3: Issuance of a Business License

How is a business license in Ohio issued? You have to identify the following to complete the process:

1. The type of business or industry
2. Do you need a license or a permit?
3. Do you need a single license or multiple licenses?
   For example: A retail food establishment that sells alcoholic beverages will require a license for food establishment and permit for alcoholic beverages. The latter would be issued by the Ohio Department of Commerce, Division of Liquor Control.
4. Will it be issued by the state or the city?

Once you have identified the above, all you need to do is either download the application online or contact the concerned state department or city clerk or county office. The validity of a business license is normally one year from the date of issue although different cities and counties have different dates.

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