An Ohio LLC operating agreement is a contract between the members of a limited liability company (LLC) that establishes how the company will be run financially and operationally. The completed document will lay out the rules and regulations of the LLCs, how it will be taxed, when and how distribution payments will be made, voting rights, and the scheduling of annual meetings, as well as naming the members and their share of interest in the company. The agreement is an internal document, and is neither required by law or filed with the state.
Single-Member LLC Operating Agreement – If an LLC only has one (1) member, there will be significantly less terms required in the operating agreement because their is no division of interest in the company and this simplified contract can be used.
Multi-Member LLC Operating Agreement – Allows LLCs with two (2) or more members to enter into a binding agreement that relays the financial framework and procedures of the company, its business operations, and each member’s percentage of ownership and financial interest.
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- Chapter: Chapter 1706 (Ohio Revised Limited Liability Company Act)
- Definitions: § 1706.01
- Formation: § 1706.16
- Naming of LLCs: § 1706.07
- Step 1 – Select a Business Name
- Step 2 – File Documents with Secretary of State
- Step 3 – Execute an Operating Agreement
- Step 4 – Register Company for Taxation
All companies are required to register a unique name when they found an LLC. To ascertain whether or not a name is currently registered in the Ohio, enter it in the “Business Name” field of the Secretary of State Business Search webpage and click “Search” to see the results. If the same name is already in use, the process will be need to be repeated until a unique name is found.
Before an LLC can legally operate in the state, the company must complete and file Form 533A – Articles of Organization with the Secretary of State. If the company is already registered in another sate and is expanding its business into Ohio, a different form, Form 533B – Registration of a Foreign LLC, must be filed along with a proof of authenticity from their domestic state.
There are two (2) methods for filing the Articles of Organization with the Secretary of State:
The most efficient way to register an LLC is to file online through Secretary of State business portal. Users will need to navigate to the Ohio Online Business Central and click Submit a Business Filing. On the next page, the user will be asked to login or register a profile by clicking Click here to Create Profile. Once the user has successfully logged in, they will be able to complete and submit the necessary forms online. A credit card is required to pay the $99 filing fee.
File By Mail
To file by mail, the following form(s) must be obtained and completed:
- Articles of Organization (Form 533a) – PDF
- Registration of a Foreign LLC (Form 533b) – PDF
- Certificate of Existence (issued by state of origin)
A check or money order payable to “Ohio Secretary of State” for the amount of $99 must be made to pay the requisite filing fee. Mail the completed documents and payment to the address below.
Separate from the Articles of Organization, an operating agreement sets forth an LLC’s financial and operational framework and procedures. It is not technically required to create an operating agreement for an LLC. However, it should be considered a requirement for multi-member LLCs because it establishes each member’s ownership percentage, as well as their rights, and responsibilities in a contract that binds them to its terms.
- Single-Member LLC Operating Agreement
- Multi-Member LLC Operating Agreement
After an LLC’s foundation, it will need to be registered for state taxes. Registration can be completed through the Ohio Business Gateway portal. It is recommended that a CPA is hired to ensure that the business is properly registered to pay state taxes.
If the company has more than one (1) member, the LLC must also apply for an employer ID number (EIN) from the IRS. An EIN can be applied for online at no cost.