Although it may seem intimidating, starting a business does not have to be complicated. If you want to start an LLC in Indiana, we will provide some of the information you need to get started. This article will guide you through the process of setting up your LLC and offer some helpful tips along the way. So let's get started!
What is an LLC?
An LLC, or limited liability company, is a business structure in the US that prevents its owners from being held accountable for their debts and liabilities. Limited liability companies are hybrid entities consisting of aspects of both corporations and partnerships/sole proprietorships.
An LLC's limited liability status does not come from any form of a corporate entity like corporations would. However, members of an LLC can enjoy flow-through taxation similar to what is found in partnerships rather than corporations.
Starting an LLC in Indiana
Now that you know a little bit about LLCs let's talk about how to start one in Indiana.
Choose a Name for Your Indiana LLC
To register your LLC, you'll need to choose a name for your company first.
Indiana law specifies a variety of rules and regulations for names. However, the following are the most significant ones to remember:
- The name of your company must contain the words "Limited Liability Company," "LLC," or "L.L.C."
- In order to start a new business in Indiana, you'll need to name it something different from an existing company. To see if a certain business name is registered, search the Secretary of State's website. Check this link for information on whether or not a particular name is available in Indiana.
- The business name cannot use words associated with government agencies, such as "State Department," "CIA," "FBI," and/or "Treasury."
- Restricted words (bank, lawyer, attorney, credit union) may necessitate more documentation and licensure paperwork.
Please find the official list here: Indiana's naming rules.
It's paramount that you check if your LLC name is available as a domain name. This will be important for marketing purposes and establishing an online presence.
Choose a Registered Agent for Your LLC
A registered agent must be designated in order for an LLC to form in Indiana.
A registered agent is an individual or business authorized to receive formal legal documents on behalf of your LLC.
An LLC can have only one registered agent at a time. A registered agent is an individual (including yourself or an employee of your LLC) or an organization that offers a registered agent service. The following conditions must be met:
- All entities, such as companies and partnerships, must provide registered agent services.
- In order to be an agent, you must have a permanent address in Indiana.
- The agent must be present in the office during regular business hours to accept documents.
Prepare to File Articles of Organization
The Articles of Organization is a formal document that formally establishes your LLC by detailing essential information about it.
The Indiana Secretary of State requires the following information to prepare your articles:
- The name and address of your LLC.
- The name and address of the individual or business that you have appointed to receive service of process on your behalf.
- This is the purpose for which you established the LLC. This can be a wide statement.
- The duration of an LLC is the length of time it will exist. In most cases, LLCs are permanent, which means they have no expiration date. A perpetual LLC may be canceled by you or on your behalf. If you want your LLC to terminate at a particular date, you should enter that date here.
- Who will take charge of the LLC?
- The Articles must be signed by the person who creates the LLC.
The secretary of state will review your filing after you submit it. If the articles are found to be acceptable, the LLC becomes a legal business entity.
Draft & Ready an Operating Agreement
The main objective of an operating agreement is to confirm the expectations and limitations set for those running the LLC.
An operating agreement is not required in Indiana but is a necessary component of any company. A readily accessible, written operating agreement can assist you with various issues, including resolving financial disputes and other possible litigation. The courts make judgments based on state law rather than what is best for the LLC and its members if there isn't an operating agreement in place.
The operating agreement may include, but is not restricted to:
- LLC's name and primary address
- How long will the LLC be in effect?
- The name and address of the registered agent.
- Information regarding the establishment of a corporation
- What is the goal of the organization?
- How will earnings and losses be shared?
- This is the procedure for admitting both new and exiting members.
- The management of the LLC
- Liability clauses
Get an EIN (Employee Identification Number)
The Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN) to your LLC to identify it for taxation purposes. You may obtain your EIN by mail or online through the IRS.
The reason for an EIN is to help with the following:
- Tax records may be kept and managed at both the state and federal levels.
- Create a business bank account.
- Hire employees.
When you form an LLC, you're establishing a legal foundation for your business. On the state's website, keep your LLC compliant and active. This may include making quarterly tax payments as well as annual paperwork filings. Every two years, all Indiana LLCs must submit a Business Entity Report to the secretary of state. The report is due on the anniversary month of the LLC's inception. You must also maintain a registered agent for your company.
The following are some of the benefits of forming an LLC:
- Obtain necessary permits and licenses to run your firms, such as health department permits, zoning permissions, home occupation certificates, professional licenses, and more. In some states, a seller's permit is required for sales.
- The state's tax office can register your company.
- Create a business bank account.
- Apply for a business credit card or line of credit.
- Purchase insurance for your business.
Starting an LLC in Indiana FAQs
Do I need a registered agent?
A registered agent is required in Indiana.
How long does it take to form an LLC in Indiana?
The filing process takes approximately seven to ten business days.
How much does it cost to form an LLC in Indiana?
The filing fee for the Articles of Organization online is $95.
What is the annual report fee for an LLC in Indiana?
The annual report fee for an LLC in Indiana is $30.
How often does an LLC need to file an annual report in Indiana?
An LLC must file an annual report every year.
Where do I file my LLC annual report in Indiana?
The annual report must be filed with the Indiana Secretary of State.
When is my LLC annual report due in Indiana?
The LLC annual report is due on the anniversary month of the LLC's formation.
Does Indiana require an operating agreement?
No, but it is strongly recommended that you have one in place.
What is the purpose of an operating agreement?
An operating agreement sets forth the expectations and limitations for those running the LLC. It can also help resolve financial disputes and other possible litigation.
How do I get an Employer Identification Number (EIN) for my Indiana LLC?
You may obtain your EIN by mail or online through the IRS.
How do I comply with the annual requirements for my Indiana LLC?
Every two years, all Indiana LLCs must submit a Business Entity Report to the secretary of state. The report is due on the anniversary month of the LLC's inception. You must also maintain a registered agent for your company.
What are the benefits of forming an LLC in Indiana?
Forming an LLC has several benefits, including personal asset protection and pass-through taxation. Additionally, LLCs can help you obtain the necessary permits and licenses to run your business. Finally, an LLC can give your business a professional image.