How to Start an LLC in Indiana
Looking to start a new business in the state of Indiana? You’ve come to the right place. This guide will show you in detail how to start an LLC in Indiana.
Limited liability companies, or LLCs, are a very popular type of business entity for companies of all shapes and sizes. They are relatively easy to set up and maintain (especially compared to a corporation), yet they still offer great liability protection. With an LLC, the owner’s assets are protected in the case of a lawsuit against the LLC. The same cannot be said for a sole proprietorship.
If you’ve settled on an LLC, and you plan to operate in Indiana, you will need to register with INBiz, the Indiana business department. INBiz is an online website portal that works together with the Secretary of State, the Department of Revenue, and other relevant agencies in the state of Indiana.
You can handle the entire business formation process online. This guide will show you step-by-step how to start a limited liability company in Indiana. Let’s get started!
Consider using an LLC service
To save time and hassle, many entrepreneurs can benefit from using an LLC formation service. These companies help guide you through the registration and formation process, helping to ensure accuracy and efficiency.
There are two companies in the space that we highly recommend: ZenBusiness and Northwest Registered Agent.
ZenBusiness is very cost-effective, with plans from just $49 + state fees. Northwest costs a bit more but offers more customized service. Either company will be an excellent choice for your business.
Another benefit of using a formation service is that they can also be your Registered Agent provider. It is required to appoint a registered agent for your business, so using a service that offers both registered agent and business formation services can save you time.
Name your LLC
Selecting a name for your business is the next concrete step you will need to take. You need to find a name that meets certain requirements:
- Unique – The name must be unique and distinguishable from other business names in the state. To confirm this, you can conduct an Indiana business name search.
- Contains “LLC” – The name must contain “LLC”, “L.L.C.”, or “Limited Liability Company”.
- Does not contain restricted words – Certain words are restricted and cannot be used (or must obtain pre-approval). This includes government-related phrases, as well as words from protected industries like “banking” or “bank”.
You will need to select an appropriate name before moving on to the next step. That said, keep in mind that this name is not the only name you can do business under.
Using trade names in Indiana
Indiana allows for the use of trade names, otherwise known as Doing Business As names (DBA). A DBA is basically a second name for your company that is listed on your business license but isn’t actually the formal name of your business entity. For example, “ABC, LLC” could do business as “XYZ” or “XYZ Foods”, if they added those DBAs to the business license.
Typically, DBAs are registered on the county level and added to local business licenses. They are not registered directly with the state.
Because you can use a trade name, you don’t need to worry too much about selecting the “perfect” business name for your LLC.
Select a registered agent
You will need to appoint a Registered Agent for your business. What is a registered agent? Basically, it’s an individual or a company that is responsible for receiving important tax documents and legal notices on behalf of your business. The most important role is to receive notice of lawsuits.
Any individual residing in Indiana can be your Registered Agent. So, you can select yourself as your agent, or one of your employees. The only downside to this approach is that the name and address of the registered agent will become public record. If you’re concerned about privacy, this is less than ideal.
Companies licensed to do business in Indiana can also be your Registered Agent. Various companies in the state offer Registered Agent as a paid service, typically for around $100-$150 per year. Both ZenBusiness and Northwest Registered Agent offer this option. If you use a service, your personal information and mailing address will be protected.
Draft an operating agreement (optional)
Operating agreements are internal documents (meaning they aren’t submitted as part of your application), but they are still important. They establish important details about your company. Most notably, they establish ownership structure and rights. For multi-member LLCs and co-owners, this can help prevent future ownership disputes.
An operating agreement is optional but recommended for most companies. You can use a service like ZenBusiness, which offers their clients templates to make drafting agreements easier. Or you can hire a local attorney to help.
File LLC Articles of Organization
You must file Articles of Organization with the Indiana government in order to form your LLC. This is the formal document that must be submitted in order to establish your company. It can be done online, or by mail.
To file online
File with the Secretary of State Business Services Division. Select “Start a New Business”, register for an account, and then proceed with the Articles of Organization.
To file by mail
Download the form here. Fill it out, and mail it to:
Secretary of State Business Services Division
302 West Washington Street
Indianapolis, IN 46204
The filing cost is $95 when filing online (payable by credit card), or $100 when filing by mail (payable by check). These costs are non-refundable.
If you use a service like ZenBusiness, you will pay this Indiana LLC fee in addition to ZenBusiness’s own fees (starting from $49). However, in this case, the full payment is processed by ZenBusiness, and they forward the necessary funds to the state of Indiana to cover registration fees.
Wait for your documents
You’ll now need to wait for Indiana to process your Articles of Organization in order to form your LLC. If there are no issues, your business will be formed and you can move on to step 7. If any issues arise, you’ll need to correct them and re-submit the application.
Indiana is known for the fairly quick processing of business applications. In general, applications should be processed in 6-9 business days. Expedited processing may also be available, for an additional fee.
Obtain an Employer Identification Number (EIN)
You will want to apply for an EIN with the IRS. This number is somewhat like a social security number for your business, and you will use it for correspondence with the IRS. It’s also required to hire employees, so this is quite important for most businesses.
You can apply for an EIN online here. There is no cost, and the application takes just a few minutes. Once you have the EIN issued, you can hire employees, open business banking products, etc.
Obtain business licenses & permits
There is a common misconception that forming an LLC is the same as obtaining a business license, but this is not the case. LLC formation is handled on the state level, while business licenses are usually issued by city and/or county governments.
You’ll need to wait for your LLC to be formally registered, before applying for a business license. Check with your county/city government for details on how to apply.
Additionally, you will need to register for tax accounts at the state level. This includes accounts for employer taxes (like payroll) and sales tax (if you sell taxable goods/services). More information can be found here.
Also, keep in mind that you may require specialized permits or licenses, depending on the type of business you plan to operate. For instance, medical service providers will need additional licenses, and bars and restaurants will need liquor licenses to serve alcoholic beverages.
The steps above are the basic tasks you’ll need to handle to start your business. That said, there are a few additional tasks that you should tackle as soon as possible.
Keep your business in good standing
The steps above are all the initial tasks you’ll need to start your business. Running your business, and keeping it in good standing, is another issue entirely. Here are just a few of the items that you will need to stay on top of:
- Filing Business Entity Reports (every 2 years) with the state of Indiana
- Filing annual reports, where required
- Filing Indiana sales tax returns
- Filing Indiana employer tax returns
- Filing federal tax returns
- Renewing business licenses and permits
- Keeping a qualified Registered Agent appointed for the life of your company
This can all seem like a lot to handle. Using a professional Registered Agent service, like ZenBusiness, can help, as they can remind you of certain key dates.
It’s also wise to add due dates to your calendar so that you don’t miss anything. We recommend doing the research now to fully understand all your ongoing requirements so that you can get off on the right foot.
Open a business bank account
It’s very important to separate your finances from the finances of your business. This is key both for accounting purposes, and to protect your personal assets in the case of a business lawsuit.
To do this, you will want to open a dedicated business bank account as soon as possible and use this for ALL business transactions.
Most banks and credit unions offer business checking solutions, so shop around for a good fit for your company. Be sure to call ahead to see what requirements they have (at a minimum, most will require a business license and an EIN).
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