Indiana relies on its small businesses and a spirit of entrepreneurship. As of 2019, small businesses made up 99.4% of all businesses within the “Hoosier State.” It is not surprising that Indiana continues to see new businesses form annually. The region abounds with affordable communities where business owners can confidently establish themselves.
Do you want to create an LLC in Indiana? Learn how to start an LLC in Indiana with our simple guide. We’ll walk you through the necessary steps to help you get your business entity registered and set up for success.
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What To Do Before Registering Your LLC in Indiana
There are a few things to take care of before moving forward with your LLC paperwork, especially if you wish to avoid wasting time and money. If you feel overwhelmed, consider hiring an LLC service to start you off on the right foot.
Decide Upon and Research a Business Name
Because Indiana law requires you to select a name that is distinct from other businesses, you need to handle the naming process with care. The search engine to check name availability is a great resource for confirming the name you want for your future LLC is available to use.
Once you settle on a name, you can reserve it by filing online through the Secretary of State’s (SOS) website. The process costs just $20, and it lets you hold a name for up to 120 days.
If you need to renew your business name reservation, the fee is $10.
Have a Registered Agent and Office
Should you set up an LLC in Indiana, your business must have a registered agent and registered office. The registered agent is responsible for receiving important legal and tax-related documents on behalf of your company. For this reason, they’re required to have a physical address within the state.
You can hire your own registered agent for a fee that typically ranges between $50 and $300. If you are located in Indiana, you can be your LLC’s registered agent, but the LLC cannot act as its own agent.
Establishing Your Indiana LLC
You may submit a physical copy of your Articles of Organization or complete the process online. The cost for domestic LLC formation is $100 by mail or $95 online. There’s a small payment processing fee if filing online.
Foreign entities registering an LLC must likewise complete a Foreign Registration Statement. The filing fee is $125 to $250 by mail or $105 to $240 online. If filing paperwork by mail, include a check or money order made payable to the Secretary of State.
If you are curious about fees and what your total expenses for filings could be, there’s a very useful calculator on the official website.
Once You Set Up Your LLC in Indiana
After you successfully register your LLC, there is still more to do. While not necessarily required, these steps could all be thought of as necessary for your company’s long-term benefit and survival.
Check for and Correct Any Errors
In the event there are errors with your LLC filings, it is crucial to submit the Articles of Correction as soon as possible. The process costs $30; remember to make out your check or money order to the Secretary of State. Once you complete your document and have payment ready, send your payment to 302 West Washington Street, Room E-018, Indianapolis, Indiana 46204.
Develop an LLC Operating Agreement
Operating agreement creation should be one of your first tasks after successfully forming your LLC. This document, while not legally mandatory, is still essential as it explains the way your LLC will operate and the rights and responsibilities of its owners, or members. The operating agreement, for instance, will explain the financial obligations of each LLC member, the way decisions will be made and profits and losses divided, the roles the members will play and the way you’ll deal with new or departing members.
A thorough and detailed operating agreement lends credibility to your LLC and gives you guidance for dealing with disagreements among the members.
Employer Identification Number (EIN)
Many LLCs are required to get an EIN, sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN). Single-member LLC owners with no employees can use their Social Security number (SSN) instead.
Though EINs aren’t always required, they are a secure alternative to SSNs, making you less vulnerable to concerns such as identity theft.
If you need an EIN, it’s possible to get one for free through the official IRS website.
Submit Your Biennial Business Report
Indiana LLCs must submit a business entity report every two years. In addition to physical filings, the process may also get completed online. The documents are due on the anniversary month of your LLC’s formation. The Secretary of State’s office will typically send a reminder to your registered agent at the time the paperwork is due.
Domestic and foreign LLC entities are required to complete the process, which costs $50.
Bottom Line
As you can see, the process of obtaining an LLC in Indiana requires a series of key steps, both before and after the formation of your business entity. As long as you make sure you have the right documents, pay the correct fees and make the effort to remain in good standing, your Indiana LLC will be able to operate and thrive for a long time.
LLC State Guides
Frequently Asked Questions
What Is an LLC?
An LLC balances the relative ease and flexibility of a partnership or sole proprietorship structure with the increased risk protection of a corporate structure. Like corporate shareholders, LLC owners (known as “members”) enjoy limited liability, meaning personal liability to the company includes only what members have invested and does not extend beyond it to cover corporate losses or debts.
By default, members of an LLC pay taxes as a share of personal income just as owners of a sole proprietorship or general partnership would—this is often referred to as a “pass-through” tax structure. An LLC can elect to be taxed as a C corporation C-corp or S corporation (S-corp) if it meets certain requirements. Many small business owners choose LLCs for their simplicity and flexibility.
How much does it cost to set up an LLC in Indiana?
It costs $100 to form an Indiana LLC if you submit paperwork by mail, and about $97 if you file online. In addition to these state fees, you may have additional costs if you reserve a name in advance, hire an LLC service to prepare and submit your paperwork for you or hire a professional registered agent.
How do I start an LLC in Indiana?
Check to make sure the LLC name you want is available. Additionally, make sure you hire or set up a registered agent and address. When you are ready, submit the Articles of Organization to the Indiana Secretary of State. Following registration, remember to complete a business entity report every two years.
What taxes do LLCs in Indiana pay?
Most LLCs have pass-through taxation, which means members report their share of business profits and losses on their personal tax returns. The LLC itself does not pay corporate income tax unless it has elected to be taxed as a C corp. LLCs taxed as C corps pay federal corporate tax and a 4.9% Indiana Corporate Income Tax. It’s a good idea to sit down with a small business accountant to review your situation and get advice on the best way to manage your taxes.
Is it possible to set up an LLC for free?
While the cost to register an LLC varies by state, there is a fee to register in every state. So, while there are some companies that advertise “free” LLC formation, what this means is that the company will fill out the LLC paperwork for you for free. But again, you will still be responsible for the state’s filing fee.
What are the different types of LLCs to set up?
When determining how to start an LLC, there are several types of LLCs to choose from. Knowing the LLC structures available is essential for selecting a business model that most closely aligns with the nature of your company and how you intend for it to operate. These LLC structures include:
- Single-member LLC: This LLC is owned and operated by a single person. While similar to a sole proprietorship, this LLC provides additional tax benefits and liability shielding.
- Multimember LLC: Standard LLCs with more than one member, often divided into manager-managed or member-managed entities.
- L3C: These entities, also known as “low-profit liability companies,” act as a bridge between nonprofit LLCs and for-profit LLCs where the business cause remains the primary focus rather than earnings.
- Series LLC: Series LLCs are tiered business structures where the topmost LLC owns a series of lower-tiered LLCs through limitless segregation. Each LLC in the series operates mostly independently of one another; their assets are also primarily separated.
- PLLC: A specialized LLC, this business formation type is only available to certain licensed professionals.
- Restricted LLC: Restricted LLCs are not taxed during the first 10 years of formation. Likewise, they cannot make distributions to members. It must be stated in the articles of organization that the LLC will be restricted.
