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Indiana depends on its thriving small business sector and the entrepreneurial mindset of its residents. In fact, as of 2019, small companies accounted for a staggering 99.4% of all businesses in the state, commonly referred to as the “Hoosier State.”
It comes as no surprise that Indiana continues to experience a steady influx of new enterprises each year. With many affordable communities throughout the region, aspiring business owners can confidently establish their ventures.
If you’re interested in forming an LLC in Indiana, look no further than our comprehensive guide. We provide clear and concise instructions on how to navigate the process step by step, ensuring that you successfully register your business entity and position yourself for long-term success.
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How to Start an LLC: Indiana 7–Step Guide
Gaining further knowledge about forming an LLC in Indiana can enhance the reputation of your small business and create opportunities for its future prosperity. Are you prepared to begin? Use this step-by-step guide consisting of seven key stages.
Step 1: Choose a Name For Your Indiana LLC
To establish your Indiana LLC, it’s crucial that the name you choose sets it apart from other businesses within the state. Before becoming too invested in a specific name, utilize the entity name search engine to ensure its uniqueness.
If you have already found the ideal name that meets all necessary criteria, you have the option of reserving it for 120 days by paying $10. This will allow you time to gather and file all additional required documentation before finalizing the process.
What Are the Name Requirements?
While you have the freedom to be creative with your LLC’s name, there are specific criteria to adhere to when selecting a name for your LLC in Indiana. These include:
- Your name must incorporate the term ‘Limited Liability Company,’ which can be represented by its abbreviations (LLC or L.L.C.).
- Avoid using words or acronyms that might suggest an affiliation with a government agency (e.g., FBI, NSA, State Department).
- If you wish to use the term ‘bank’ in your name, you need approval from the Indiana Department of Financial Institutions.
- Your chosen name must not duplicate any existing or reserved business names in Indiana.
What Else Can My LLC’s Name Be Used For?
Once you have verified the availability of your desired name for your LLC, check if the name is already being used as a web domain. While you may not currently require a business website, it’s worth considering the possibility of needing one in the future.
If your desired domain name is already taken, it might be wise to choose an alternative name. However, if the domain name is available, it would be prudent to secure and purchase it to prevent others from acquiring it.
Step 2: Choose a Registered Agent
Understanding how to start an LLC in Indiana is just the initial step. It’s equally important to determine who will assume the responsibility of handling LLC communications. A registered agent serves as the intermediary, responsible for relaying crucial financial and legal information to all members of the LLC. The registered agent must be an individual with readily available contact details to ensure prompt delivery of information.
Although the owner or a member of the LLC can take on this role, it’s not mandatory for them to be part of the company. As long as they meet certain criteria, being at least 18 years old and having a physical address, any trusted individual can be chosen and given consent for appointment as a registered agent.
Step 3: Decide Between a Multi-Member or Single-Member LLC
Regardless of whether your LLC is composed of multiple members or only one, the filing requirements remain unchanged. The sole distinction lies in the taxation procedure at the conclusion of the year. In a single-member LLC, net earnings are recorded on the individual member’s personal tax return as “self-employed” income.
Conversely, in a multi-member LLC, both the LLC itself and each member must file separate tax returns. Each member needs to submit a K-1 form along with their personal returns.
Step 4: File Your Articles of Organization
The articles of organization comprise essential details required to formally establish your LLC in Indiana, encompassing:
- The LLC’s name
- The physical address of the LLC’s registered office and the identity of the registered agent at that location
- The intended duration of the LLC’s existence, whether for a specific period, purpose, or perpetual, until dissolution by members
- Identification of designated managers, if applicable
- Any additional provisions outlined in the operating agreement as agreed upon by the members
The articles of organization form is available as a fillable PDF, which you can complete independently or seek assistance from an online service or legal counsel.
Where Do I File and How Much Does It Cost?
If you’re interested in learning the process of establishing an LLC in Indiana, it’s likely that you’re also curious about the associated expenses. Once you have completed the form comprehensively, there are two options for submission: either online for a fee of $95 or by mail, along with a check payable to the Secretary of State for a total amount of $100.
Mailing Address:
Secretary of State Business Services Division
302 West Washington Street
Room E018
Indianapolis, IN 46204
Step 5: Get an Indiana LLC EIN
You can obtain a free Employer Identification Number (EIN) from the IRS. This number serves to identify a business entity and facilitates its tax reporting, functioning much like a Social Security number (SSN) for the company.
Why is an EIN necessary? An EIN is essential for the following purposes:
- Establishing a business bank account for the company
- Meeting federal and state tax requirements
- Hiring employees for the company
Where can you acquire an EIN? Business owners can obtain an EIN from the IRS at no cost after the company’s formation. This process can be completed online or through mail submission.
FOR INTERNATIONAL APPLICANTS: An SSN isn’t required to obtain an EIN.
Step 6: File the Business Entity Report
LLCs in most states are obligated to submit an annual report. In Indiana, LLCs are required to file a biennial report called the Business Entity Report with the Indiana Secretary of State.
These Business Entity Reports must be submitted every other year during your LLC’s anniversary month (i.e., the month when you first registered your LLC). The filing fee amounts to $32 if filed online and $50 if mailed.
Step 7: Keep Your Company Compliant
Indiana LLC Licenses & Permits
LLC proprietors are obligated to adhere to regulations set by the federal, state, and local government entities. The fees and prerequisites for licenses and permits will differ based on the specific type of business license required.
Indiana LLC Tax Filing Requirements
Remaining informed about Indiana LLC taxes is crucial. Based on the type of business you have, it may be necessary to enroll for one or multiple tax obligations.
Sales Tax
If you’re selling a physical product, you’ll typically need to collect sales tax. You can register for a seller’s permit through the Indiana Department of Revenue website.
Indiana’s state sales tax is 7%, and there are no additional local sales taxes at either the county or city level.
Employer Taxes
When bringing new individuals into your workforce, complete the registration process for Unemployment Insurance Tax through the Indiana Department of Workforce Development. You must also register for Employee Withholding Tax with the Department of Revenue. These steps are crucial in ensuring compliance and meeting your obligations as an employer.
Income Tax
State:
Indiana imposes a uniform rate of 3.15% on individual income taxes, and taxpayers are required to file their state tax returns by April 18 annually. For further information regarding the state’s income tax, please refer to the website of the Indiana Department of Revenue.
Federal:
To fulfill your tax obligations at the federal level, you will be required to submit your income tax returns using either Form 1065 (for multi-member LLCs) or Form 1040 Schedule C (for single-member LLCs).
Hiring Employees in Indiana
To ensure compliance with the law when hiring employees, adhere to these steps:
- Confirm eligibility of new hires to work in the US
- Notify the state about new hires
- Arrange for workers’ compensation insurance coverage for employees
- Deduct employee taxes
- Display workplace compliance posters prominently within your workspace.
Access employer services through the Indiana Department of Workforce Development website.
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How to Start an LLC – Buyer’s Guide
What Is an LLC?
A Limited Liability Company combines the advantages of a partnership or sole proprietorship with the added protection against risk that comes with a corporate structure.
Similar to shareholders in a corporation, owners of an LLC, known as “members,” have limited liability. This means that their personal liability is limited to their investment in the company and doesn’t extend to cover any losses or debts incurred by the business.
By default, members of an LLC are taxed based on their personal income, just like owners of a sole proprietorship or general partnership. This type of taxation is commonly known as a “pass-through” tax structure.
However, if certain requirements are met, an LLC can also choose to be taxed as either a C corporation (C-corp) or an S corporation (S-corp). The simplicity and flexibility offered by LLCs make them popular among small business owners who value these qualities.
How Much Does It Cost to Set up an LLC in Indiana?
Forming an Indiana LLC incurs a cost of $100 for submission via mail, while online filing reduces the fee to approximately $97. Apart from these state fees, there may be additional expenses if you opt to reserve a name beforehand, enlist the services of an LLC service provider for document preparation and submission, or engage a professional registered agent.
Do I Need to Get a DBA or an Assumed Name for My Business?
In most cases, there’s no requirement for LLCs to obtain a DBA. The name of the LLC can function as both the company’s brand name and be used for accepting payments such as checks. There might be instances where you may want to register a DBA to operate under a different business name.
Ways to Create an Indiana LLC
Before diving into the process of formation, determine the most suitable approach for establishing your Indiana Limited Liability Company.
DIY
Entrepreneurs who are mindful of their budget may find that the DIY option is the most suitable for establishing their LLC. By using the extensive resources provided in this guide and on the Indiana Secretary of State website, individuals can successfully navigate through the process independently, especially when dealing with uncomplicated and straightforward LLC formations.
Using an LLC Formation Service
Specializing in the submission of necessary paperwork for LLC formation, online LLC services cater to Indiana entrepreneurs who are already occupied with managing their small businesses. Despite the associated cost, hiring an LLC service proves to be a worthwhile investment.
Typically, these services provide a range of features such as guaranteed approval by the state, assistance with EIN application, registered agent service, and support in drafting operating agreements.
There’s flexibility in customizing these services to meet specific needs. For those inclined towards exploring various options before making a decision, there are multiple choices available in the market.
When partnering with ZenBusiness, you can say goodbye to the hassle of dealing with paperwork. This reputable company provides an extensive range of LLC services, prioritizing the proper setup and submission of all necessary documents to your state government’s designated department.
While there’s a fee associated with their services, customers rave about the exceptional value they receive in return for their investment. ZenBusiness will ensure your business is on the right track from day one.
Entrepreneurs often find themselves overwhelmed with the extensive paperwork required to start a business. This can be particularly confusing for new business owners. To alleviate this burden, Northwest provides business services aimed at assisting entrepreneurs in locating, completing, and submitting the necessary documentation to the relevant government agency within the designated time frame.
Besides facilitating LLC establishment, Northwest offers an array of supplementary services that new owners will undoubtedly find valuable, including registered agent services.
Bizee provides a comprehensive collection of resources to assist novice entrepreneurs in identifying the most suitable business type for their needs. It offers support with the necessary paperwork and simplifies complex concepts such as registered agents, articles of organization, and EIN. The company’s outstanding reputation is further solidified by its positive online reviews.
Hiring an Attorney
Engaging the services of a lawyer may not be suitable for every startup. However, it can prove beneficial for certain businesses, particularly those with investors or intricate financial arrangements. It’s worth considering this option when navigating such complex situations.
Common Questions About Indiana LLCs
Bottom Line
To establish an LLC in Indiana, there are several essential procedures that need to be followed before and after creating your business entity. By ensuring that you possess the necessary paperwork, fulfill the appropriate payment obligations, and strive to maintain a favorable reputation, your Indiana LLC can function successfully and flourish over an extended period.
