How to Start a Ohio Corporation


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start a Ohio Corporation

When you plan to start a business in Ohio, you must decide on the appropriate structure. Starting a corporation may be more complicated than creating an LLC in Ohio or a sole proprietorship. However, it is not that difficult as well. There are a few guidelines that you should be aware of when it comes to creating Ohio corporation. Starting a corporation involves a legal process, that is, the process of incorporation.

In this article, I will share a step-by-step guide to start a corporation in Ohio. I will also enlighten you on the advantages and disadvantages of having a corporation. Some people consider starting a corporation in Ohio more than other business structures since it has many advantages over other forms.

What is a Corporation in Ohio

In definition, a corporation is a formal organization established by stockholders, shareholders, or other people to make a profit. Like individuals, corporations can undertake contracts, own assets, sue and be sued, pay taxes, limit state and federal taxes, and loan funds from banking institutions.

Common Types of Corporations

Before you start with the process of forming a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

  • C-Corporation: C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.
  • S-Corporation: An S-Corporation is set up similarly to a C-corporation but has different tax implications and owner limits. S-corps have no more than 100 stockholders and are not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.
  • Non-profit Corporation: Nonprofit businesses are frequently used by religious, educational, and charity institutions to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations. Read how to start a nonprofit corp in Ohio to learn about nonprofit corporations.

If you have a small business, it is recommended that you form an LLC instead of a corporation in Ohio. LLCs have more tax benefits than other structures. Besides, LLCs protect your personal assets. However, it is wise to consult a legal expert before you start setting up your business in Ohio.

LLCBuddy Editorial Team

How to Start a Corporation in Ohio

To start a corporation in Ohio, you must follow the below steps that, include forming a corporation name, appointing a board of directors, filing for Articles of Incorporation, drafting corporate bylaws, meeting with the board of directors, issuing stocks, creating a shareholders agreement, requesting for an EIN, and getting a license and permit. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choose a Corporation Name in Ohio

Naming your business is one of the most crucial activities during the startup phase. Your corporation name serves as the foundation for your brand. Legal procedures should be taken into account when choosing your corporation name. Choose a corporation name that will enable you to develop a strong brand identity without being hampered by irrelevant factors.

If you are forming an LLC, there is a complete guide on Ohio LLC name guidelines for a proper LLC name. Here are some guidelines you must follow while naming your corporation in Ohio-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

Step 2: Board of Directors Initial Appointment

To form a corporation in Ohio, you must appoint an initial board of directors before making them permanent once the corporation is formed. In Ohio, you may appoint at least Three board of directors. The initial board of directors is in charge of guiding the overall strategy of your business. The structure, responsibilities, and powers given to a board of directors are determined by the bylaws of a company or organization. So, appointing your corporation’s initial board of directors in Ohio is a big step in forming a corporation.

Step 3: Filing the Articles of Incorporation in Ohio

After you appoint the initial board of directors in your Ohio corporation, the next step is to write and file a Articles of Incorporation. In writing, the Ohio Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Ohio Statutory Agent contact information, and the names and addresses of incorporators and/or initial board members, should be written.

Filing a Articles of Incorporation in Ohio may be done with three methods that are online, by mail and drop box. The Articles of Incorporation fee may vary from different states. However, in Ohio, it costs $99 for online and by mail filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online
  • Offline filing: Send the form by mail or drop it off at Ohio Secretary of State, P.O. Box 670, Columbus, OH 43216

Step 4: Draft Corporate Bylaws

Now you are done filing a Articles of Incorporation in Ohio, the next step is to draft corporate bylaws. Corporate bylaws are the basic rules that control a corporation. It includes the organization’s structure, processes, laws, and rules. As a result, all personnel, managers, and corporation members must obey the firm’s rules.

In creating corporate bylaws, you should include the following on how the decisions will be made-

  • The responsibilities are given to each officer.
  • How will judgments in business be made?
  • Where and when are the annual shareholder meetings?
  • The minimum number of shareholders required for decision-making.
  • Location and timing of dividend payments.

Step 5: Hold the First Board of Directors’ Meeting

After drafting the corporate bylaws, gather all the board of directors for the first meeting. This meeting will be finalized by appointing directors to manage the company’s daily operations, approve the bylaws, choose the corporation’s accounting year, and approve the stock issue. All board meetings should have minutes taken and stored with the company’s records.

Step 6: Issuing Stock in a Corporation

After starting your Ohio corporation, one of the first official corporate actions is issuing stock to the shareholders. Keep track of the number of shares issued to each shareholder and the purchase price. A corporation in Ohio is managed by its shareholders, who contribute to the business in exchange for ownership shares.

Step 7: Draft and Finalize a Shareholders Agreement

Even though drafting and finalizing a shareholders agreement is unnecessary, I suggest you still comply since it will benefit your corporation and its shareholders. A small business’s shareholders enter into a shareholder agreement contract. It establishes how ownership will be handled in unexpected situations, like a shareholder passes away, retires, becomes disabled, or quits the corporation. Early on in the life of your Ohio corporation, signing a shareholders’ agreement can help maintain corporate continuity and prevent future disputes.

Step 8: Request an EIN in Ohio

After everything is in place, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your Ohio corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Ohio can be through the following:

  • Apply Online- The EIN online application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your corporation the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 9: Get Licenses and Permits for your Corporation in Ohio

Before your corporation operates in Ohio, you must have a business license. A business license is a document issued by a government agency that permits you to operate your business in the geographic region that that agency governs. To legally operate your corporation, you’ll need a business license. Numerous corporate licenses need to be filed and renewed regularly. Check out how to get business licenses and permits in Ohio to know more.

You must also register a DBA name if you intend to conduct business using a name other than your corporation’s legal name. The DBA name is sometimes known as “doing business as” or a “fictitious business name.” Depending on your location, you may need to register the DBA with your state, city, and county. You can skip this step if your business solely uses your legal company name.

Important Information

Paying your Taxes in Ohio

Even if you have established your corporation in Ohio, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Ohio has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Ohio are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Ohio

A filing and annual fee must be paid to form a corporation in Ohio. Without it, your corporation won’t operate. The initial filing fee for a corporation may vary depending on the state. However, in Ohio, it costs $99 for online and by mail filing. The corporation in Ohio also has to file an annual report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly. If, in the future, you make any changes to your corporation, you must file the Ohio Amendment. It costs $50.00 to file an amendment in Ohio.

Advantages of Starting a Corporation in Ohio

  1. Limited Liability: The biggest advantage of setting up a Ohio corporation is that the shareholders are not personally responsible for the debts of the company. As a result, when you incorporate as a corporation, personal assets like homes, vehicles, and other possessions are prohibited. One of the main benefits of setting up a corporation over a general partnership or sole proprietorship business structure is that neither the business nor the owners are held legally responsible for the obligations of the business, even if it means giving up their personal assets.
  1. Limitless Corporation: The fact that a corporation’s existence is independent of its owners is another significant benefit of incorporation. In other words, a corporation has an endless life and will continue operating normally even if the owner dies or decides to sell their ownership.
  1. Advantages in Tax: The deduction of health insurance premium payments made on behalf of an owner-employee is one of the many financial benefits to which corporations are entitled. Corporations also save on self-employment taxes since their revenue is not subject to workers’ compensation, Social Security, or medical taxes. Tax rates on corporate profits are lower than those on individual income.

FAQs

What is the process of starting a corporation in Ohio?
To start a corporation in Ohio, you must first choose a name for your corporation and have it approved by the Ohio Secretary of State. Then you must file articles of incorporation with the Secretary of State, appoint a registered agent, and obtain required licenses, permits, and insurance. Finally, you must complete other required corporate formalities such as creating corporate bylaws, issuing stock, and holding an initial meeting of the board of directors.
What type of information should be included in the articles of incorporation?
The articles of incorporation should include the name of the corporation, the purpose of the corporation, the duration of the corporation, the name and address of the registered agent, the number of shares the corporation is authorized to issue, the name and address of each incorporator, and other information as required by the Ohio Secretary of State.
What is the purpose of a registered agent?
A registered agent is an individual or business entity designated to receive service of process (legal documents) on behalf of a corporation. The registered agent must have a physical address in the state of Ohio.
What are the benefits of incorporating in Ohio?
Incorporating in Ohio has several benefits, including personal liability protection for business owners, potential tax savings, increased credibility, and access to capital.
What types of taxes must an Ohio corporation pay?
Ohio corporations must pay state income tax, franchise tax, and sales and use tax.
How much does it cost to incorporate in Ohio?
The cost to incorporate in Ohio will vary depending on the type of corporation and the services used. The filing fee for articles of incorporation is $125.
Does an Ohio corporation need to file an annual report?
Yes, Ohio corporations must file an annual report with the Secretary of State each year. The filing fee is $50.
How long does it take to form a corporation in Ohio?
It typically takes 5-10 business days to form a corporation in Ohio.
What types of corporations can be formed in Ohio?
Ohio offers several types of corporations, including C Corporations, S Corporations, and limited liability companies (LLCs).
What is the minimum number of shareholders an Ohio corporation must have?
Ohio corporations must have at least one shareholder.
What is the minimum number of directors an Ohio corporation must have?
Ohio corporations must have at least one director.
Does an Ohio corporation need to hold annual shareholder meetings?
Yes, Ohio corporations must hold at least one annual meeting of the shareholders.
Does an Ohio corporation need to hold annual board meetings?
Yes, Ohio corporations must hold regular meetings of the board of directors.
Are corporate records required to be kept in Ohio?
Yes, Ohio corporations must maintain corporate records such as meeting minutes, shareholder agreements, and financial records.
How do I change the name of an Ohio corporation?
To change the name of an Ohio corporation, you must first obtain approval from the Ohio Secretary of State. Then you must file amended articles of incorporation with the Secretary of State.
How do I close an Ohio corporation?
To close an Ohio corporation, you must file articles of dissolution with the Ohio Secretary of State.
What are the requirements for issuing stock in Ohio?
Ohio corporations must issue stock certificates to shareholders, register the stock with the Secretary of State, and comply with other securities laws.
Is an Ohio corporation required to have bylaws?
Yes, Ohio corporations must have corporate bylaws that outline the duties and responsibilities of the corporation and its officers.
What types of licenses and permits might an Ohio corporation need?
Depending on the type of business, an Ohio corporation may need to obtain licenses and permits from the Ohio Department of Taxation, Ohio Department of Commerce, or other agencies.
Does an Ohio corporation need to have insurance?
Yes, Ohio corporations are required to carry certain types of insurance such as workers’ compensation, commercial liability, and professional liability.
What is the procedure for amending the articles of incorporation of an Ohio corporation?
To amend the articles of incorporation of an Ohio corporation, you must file amended articles of incorporation with the Ohio Secretary of State.
What is the procedure for amending the bylaws of an Ohio corporation?
To amend the bylaws of an Ohio corporation, you must obtain approval from the shareholders and then file the amended bylaws with the Ohio Secretary of State.
Does an Ohio corporation need to register its trademark?
Yes, Ohio corporations must register their trademarks with the Ohio Secretary of State.
Can an Ohio corporation own real estate?
Yes, Ohio corporations can own real estate.
Is an Ohio corporation required to file a tax return?
Yes, Ohio corporations must file a state income tax return with the Ohio Department of Taxation each year.
How do I change the registered agent of an Ohio corporation?
To change the registered agent of an Ohio corporation, you must file a Statement of Change of Registered Agent with the Ohio Secretary of State.
What happens if an Ohio corporation does not file its annual report?
If an Ohio corporation does not file its annual report, it will be subject to a late fee and may eventually be administratively dissolved.
Can an Ohio corporation have foreign shareholders or directors?
Yes, an Ohio corporation can have foreign shareholders and directors.
Can an Ohio corporation issue stock options?
Yes, an Ohio corporation can issue stock options, but these must comply with Ohio securities laws.
How do I dissolve an Ohio corporation?
To dissolve an Ohio corporation, you must file articles of dissolution with the Ohio Secretary of State.

Also Read

Why Ohio Corporation is So Important

One of the main reasons why Ohio Corporation is so important is its contribution to job creation. By fostering a conducive environment for businesses to thrive, Ohio Corporation helps create job opportunities for residents of the state. This not only reduces unemployment rates but also boosts the overall economy by promoting consumer spending and investment.

Furthermore, Ohio Corporation plays a critical role in driving innovation and fostering technological advancements. Through research and development initiatives, corporations in Ohio are constantly pushing the boundaries of what is possible in various industries such as manufacturing, technology, healthcare, and agriculture. This culture of innovation not only drives economic growth but also attracts top talent to the state, further solidifying Ohio’s position as a hub for innovation and creativity.

In addition to job creation and innovation, Ohio Corporation also plays a crucial role in fostering community development and social responsibility. Many corporations in Ohio actively participate in philanthropic initiatives, community outreach programs, and sustainable practices to give back to the communities in which they operate. By promoting social responsibility, Ohio Corporation helps build stronger and more resilient communities, creating a better quality of life for residents of the state.

Moreover, Ohio Corporation also plays a significant role in driving economic development and attracting investment to the state. With a favorable business climate, skilled workforce, and strategic location, Ohio has become a magnet for corporations looking to establish or expand their operations. This influx of investment not only creates new business opportunities but also helps diversify the economy, making it more resilient to economic downturns.

Furthermore, Ohio Corporation contributes significantly to the state’s tax revenue, which in turn helps fund essential public services such as education, healthcare, infrastructure, and public safety. By paying taxes and complying with regulations, corporations in Ohio contribute to the overall well-being of the state and its residents.

Overall, Ohio Corporation is a crucial driver of economic growth, job creation, innovation, and community development in the state of Ohio. By fostering a business-friendly environment, promoting innovation and social responsibility, attracting investment, and contributing to tax revenue, Ohio Corporation plays a vital role in shaping the economic landscape of the state. It is undeniable that without the contributions of Ohio Corporation, the state would not be able to achieve sustainable economic growth and prosperity for its residents.

Conclusion

When determining which corporate form is best for you, be selective. You must know which business structure is bet-fitted for your product/service in Ohio. Consult a legal professional before you take the first step while setting up your business. Finding the ideal ratio of corporate advantages and legal protection that meets your unique needs is very important. In forming a corporation in Ohio, you need to ensure that every detail is well-formed so that your corporation will be successful. And if you have any questions, share them in the comment section below.

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