- An LLC is a legal entity used in the United States to own, run, and protect businesses. Although they might be easier to manage, LLCs offer the same financial and legal protections as corporations.
- Members of an LLC automatically pay taxes as a portion of their personal income.
- Each state charges a fee to create an LLC. Submitting necessary documents by mail will cost you $100; filing online will cost you roughly $97.
- Pass-through taxation is the tax system used by most LLCs, which implies that members must declare their portions of corporate earnings and losses on their tax returns. Meeting with an accountant to discuss your circumstances and seek guidance on handling your taxes is a smart option.
- Make sure the LLC name you choose is available, and hire or establish a registered agent and a physical location. Send the Indiana Secretary of State your articles of organization once you are prepared. Remember to submit a business entity report every two years after registration.
What is an LLC?
The most crucial step the founders must take when launching a new firm is selecting the corporate entity. For most firms with several founding members, incorporating as an LLC is frequently the ideal choice for various reasons. The advantages of other popular company structures vary, such as corporations, general partnerships, and sole proprietorships. However, the LLC entity incorporates the benefits of all three.
The legal way to create a business is through a limited liability company (LLC), which combines the restricted liability of a corporation with the adaptability and lack of formality offered by a partnership or sole proprietorship. Anyone who runs a business and wants to reduce their exposure to debts and legal actions related to their company should consider establishing an LLC.
By officially establishing an LLC for your company, you'll get more authority and benefit from limited liability protection, as LLC owners are not individually accountable for the debts or the company's obligations. If your company is facing a lawsuit, this helps. Although creating an LLC may seem like much effort, it is one of the simpler company entities to create since only minimal documentation is required. Depending on the state you are registering in, the fees involved with incorporating an LLC will vary, although most states only charge a small fee.
The state of Indiana depends on its small companies and entrepreneurial spirit. In the "Hoosier State," small enterprises accounted for 99.4% of all establishments as of 2019. So, it is not shocking that Indiana continues to see new companies start every year, with affordable neighborhoods in the area allowing entrepreneurs to set up shop comfortably.
What Procedures Must Be Followed To Form An LLC In Indiana?
1. Decide On A Name For Your Indiana LLC
You must be careful when choosing a name since Indiana law mandates that it stand out from competing enterprises. A fantastic tool for ensuring the name you desire for your upcoming LLC is authorized for usage is the search engine to check name availability. When naming an LLC in the state of Indiana, keep the following two principles in mind:
- The name of an LLC must be distinct from that of other business entities currently registered with the Indiana Secretary of State.
- The words "Limited Liability Company," "LLC," or "L.L.C.," or one of its respective acronyms, must come after the name of an LLC.
To ensure that no other corporate organization uses the name before your LLC is formally created, you can reserve it with the Indiana Secretary of State after choosing a name for your LLC. But first, make sure the name you want is accessible by using the Indiana Secretary of State Business Search, the Secretary of State website, and submit a Reservation of Business Name there. The filing price is $20, and a name can be held for 120 days.
2. Choose A Registered Agent And Office
Your company must have a registered agent and registered office if you choose to form an LLC in Indiana. Necessary legal and tax paperwork must be delivered to the registered agent on your company's behalf. They must have a physical address within the state due to this requirement. You can employ your registered agent for a charge that usually varies between $50 and $300. If you reside in Indiana, you may serve as the LLC's registered agent, but the LLC does not serve as its agent.
3. File Articles of Organization With The Indiana Secretary of State Corporations Division
Articles of Organization must be submitted to the Corporations Division of the Indiana Secretary of State to establish an LLC there. The articles can be filed online or by mail for a $100 filing fee. Before sending out your Indiana LLC's Articles of Organization, make sure they contain the essential information:
- The name and address of your LLC
- The name and address of your registered agent
- A remark indicating whether the LLC is manager-managed or member-managed
- A declaration stating the expected term of the LLC
- The signatures of the LLC organizer
To conduct business in Indiana, foreign LLCs established in another state must register with the Indiana Secretary of State. To legally operate as a foreign LLC in Indiana, take the following steps:
- Check the Indiana Secretary of State Business Search to see whether the company name is available and to ensure it complies with Indiana LLC naming standards.
- Make arrangements to have a registered agent in Indiana handle the process for you.
- Contact the Indiana Secretary of State and submit a foreign registration statement electronically or by mail. There is a $125 filing fee.
4. Create An Operating Agreement
Drafting a thorough LLC operating agreement is highly advised for all upcoming limited liability firms, even if it is not a requirement for LLC formation in Indiana by law. These things should be covered under the operating agreement:
- Describe the corporate structure of the LLC.
- Establish each LLC member's specific duties and obligations.
- Describe the operational details of the LLC.
An LLC may experience substantial operational and legal challenges in the absence of an operating agreement that specifies the precise obligations of its members.
5. Acquire an Employer Identification Number (EIN) From the Internal Revenue Service
To operate in the country, any newly created LLCs must get an Employer Identification Number (EIN) from the Internal Revenue Service. Like a social security number for businesses, the nine-digit EIN is required to pay income taxes, submit tax reports, create corporate bank accounts, and carry out several other crucial tasks. You may apply for an EIN online at the IRS website without paying a filing fee.
Key Considerations After Registering An LLC In Indiana
After registering an LLC, its members are responsible for adhering to all applicable laws for the life of the business's operations. Once your LLC has been legally formed, work is still left to be done. While these tasks are not required, they are all essential for your company's long-term growth and profitability. If you're having trouble, you may get yourself off to a solid start by hiring a reliable LLC service.
1. Crosscheck and correct mistakes
Submitting Articles of Correction as soon as you discover any mistakes in your LLC filings is essential. Remember to write your check or money order to the Secretary of State since the procedure costs $30.
2. Report And Submit Your Biannual Business Report
Every two years, Indiana LLCs are required to file a business entity report, and this procedure can also be performed online in addition to in person. The Secretary of State's office will typically notify your registered agent when the paperwork is due, and you must submit it within a month of your LLC's formation. In addition, both domestic and international LLC organizations must complete the $50 registration process.
3. Gather Licenses And Permits Required For Your Company
Depending on their location and type of company, certain LLCs in Indiana might need to get one or more licenses, permits, or certificates given by the state or the local government. For comprehensive information on state business licenses, see the Business Owner's Guide offered by the Indiana Department of Business and Agriculture. Speak with a city clerk in the country or city where the headquarters of your LLC is located to learn more about local licensing regulations.
4. Register with the Indiana Department of Revenue.
The Indiana Department of Revenue (DOR) requires that many Indiana LLCs, especially those with workers who collect sales tax, register with them. This registration can be done online by mailing a completed paper application to the DOR or in person at the DOR office.
What Are the Best LLC Services in Indiana?
Northwest offers you the services, such as registered agent services and compliance files, that you require to establish your business legally (e.g., annual reports). Because you don't have to worry about completing everything yourself or running the danger of missing significant and expensive deadlines, it is easier for you to operate your firm.
The most incredible all-in-one premium package is provided by Tailor Brands, the fastest LLC formation firm in Indiana, and it includes everything you need from start to end.
Incfile has a fantastic resource collection that may assist new business owners in determining the type of company they should launch. As a next step, Incfile will assist with paperwork and filing procedures and explain concepts like "registered agent," "articles of organization," and "EIN."
ZenBusiness is ideal if you're seeking a quick and inexpensive approach to starting your business. It provides LLC creation solutions for as little as $49 a year (plus the Indiana filing fee). ZenBusiness' procedure is speedy and straightforward; by using the company's transparent, user-friendly web platform, you may create an LLC in a matter of minutes. Additionally, they provide many valuable tools, such as templates, legal counsel, and more.
A simple business form called an LLC gives business owners legal protection by isolating their assets from their company's debts. Additionally, LLCs frequently pay less tax than corporations do. The creation procedure, filing costs, and ongoing legal duties vary from state to state, so founding an LLC might become complicated depending on your location. Registering an LLC in Indiana involves several important actions you must take before and after your company entity's creation.
Although forming an LLC may appear complicated, it is relatively straightforward if you carefully study the laws and regulations and follow the stages. Since many people in business might need more time to manage all the steps necessary to set up an LLC, it is usually simpler to use an LLC service to prevent mistakes and rapidly form an LLC in any US state.
Your Indiana LLC will be allowed to run and prosper for a long time if you ensure that you have the proper documentation, pay the appropriate fees, and put up the work to maintain good standing. In addition, Indiana's procedure for forming an LLC is relatively simple compared to some other states, and entrepreneurs shouldn't encounter any significant difficulties while establishing their companies there.
Learn more with us
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At Levy, we help early-stage founders streamline and automate regulatory and legal ops, HR, and finance so you can focus on what matters most — your business.
We can provide sufficient information to guide you in starting a limited liability company in Indiana. In this way, you can avoid some common mistakes and errors that people usually face in the process.
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