How to Start an S-Corp in Ohio


Steve Goldstein
Steve Goldstein
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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 an S-corporation in Ohio

Ohio, popularly known as The Buckeye State, offers a bunch of benefits for business owners, especially the state capital Columbus has a lot to offer to the rising entrepreneurs in the state. If you want to start a business in Ohio, you must choose an appropriate corporate structure. You can have a corporation or a sole proprietorship or set up an LLC in Ohio. There are a few guidelines that you should be aware of when it comes to starting an S-Corporation. In Ohio, S-Corporation is businesses’ most common corporate structure, especially start-ups. It was developed in order to give companies limited liability protection while preserving the advantages of being a distinct legal organization.

In this article, you will learn about how to start an s-corporation in Ohio. You will also learn whether an s-corporate business structure suits your business. Please read all the points carefully before starting your business in Ohio.

What is an S-Corp in Ohio?

An S corporation (S-corp) is not a type of corporate entity, unlike a limited liability company (LLC) or other business structures. It’s a tax classification that might result in significant financial savings for both corporations and LLCs but in different ways. S-corp is similar to LLC, except that the IRS treats it as a corporation for tax purposes.

If you want an S corp status for your business, you can always form an LLC to protect your personal assets from business debts. It takes some basic steps to have a successful s-corporation in Ohio. S-Corps do pay corporate income taxes, but they are still treated as disregarded companies for federal tax purposes.

S-corps pay corporate taxes that LLCs do not have to pay. If you want to have an S-corp status, then we would recommend you have an LLC instead. This will protect your personal assets from your business liabilities and you don’t have to pay any corporate taxes.

LLCBuddy Editorial Team

Limitation and Requirements of S-Corp in Ohio

As you have decided to have an S-Corp structure for your business, you must know the limitations and requirements to qualify for S-Corp status. We have listed some important points to consider following for your reference-

  • Be a domestic corporation.
  • Not be an ineligible corporation, such as specific financial institutions, insurance providers, or domestic corporations engaged in overseas sales.
  • Have just one type of stock.
  • Have a maximum of 100 shareholders or members.
  • Have only permitted individuals, certain trusts, and estates as stockholders or members.

If you are qualified for the limitations and requirements, you can apply for an S-Corp in Ohio.

How to Start an S-Corporation in Ohio?

To create S-Corp in Ohio, you must follow the below guidelines that include forming a business name, hiring a Statutory Agent, filing your Articles of Organization, creating an operating agreement in Ohio, requesting an EIN, filing a form 2553.

Step 1: Register a Business Name in Ohio

After you have decided on the idea to start an S-Corp in Ohio, deciding the name for your corporation is significant. Legal procedures should be taken into account when choosing your partnership name. Choose a business name that will enable you to develop a strong brand identity.

If you want to set up 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 S-corp.

  • Avoid profanities
  • The name should be available, and no other entity should have the same name in Ohio.
  • Limit of restricted words that need a license in Ohio, for example, doctors, attorneys, etc.
  • Do not use a business name that sounds like a government agency or entity (like “police,” “county,” and “state”)

Step 2: Hiring the Ohio Statutory Agent

The next step in starting an S-corp in Ohio is hiring a Ohio Statutory Agent, a person that accepts legal paperwork on behalf of your business. This person or business will receive important tax forms, legal documents (such as subpoenas), all notices of lawsuits, and other official government correspondence in Ohio. Forming an LLC and an S-corp will be easier if you have Statutory Agent in Ohio.

Step 3: File Your Ohio Articles of Organization

The Articles of Organization is an important document to start your limited liability company (LLC). Ohio Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization. In order for the “Articles of Organization” to be filed, you need to pay a filing fee to the state. In Ohio, the filing fee is $99.

In California, along with the Articles of Organization, you must send the Statement of Information to file your company. The statement of information is a mandatory document in California, but other states do not have this document.

Step 4: Creating an Operating Agreement in Ohio

After you have filed your Articles of Organization in Ohio, the next step is to create an LLC operating agreement in Ohio. The Ohio LLC operating agreement is essential and necessary since it will cover your corporation’s important documentation and rules. The operating agreements usually include the following-

  • Article I: Organization
  • Article II: Management and Voting
  • Article III: Capital Contributions
  • Article IV: Distributions
  • Article V: Membership Changes
  • Article VI: Dissolution

After creating the LLC operating agreement, you can benefit in several ways since it will discuss how decisions for the business will be made, including management and member voting structure. For more details about how an operating agreement works, please check Operating Agreement.

Step 5: Request for EIN in Ohio

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN). An EIN will serve as the tax ID for your general partnership. 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- You can apply for EIN online, the most desirable and fastest method for users.
  • Apply by Fax- Another method of obtaining EIN is to fax Form SS-4 (PDF) after entering all the correct information to (855) 641-6935.
  • 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.

If you would like to be assisted in getting an EIN in the Internal Revenue Service, we can get your EIN for you. Our EIN service is quick and hassle-free. For more details about EIN for your business, check why you need EIN.

Step 6: File Form 2553 for Your S-Corp Business in Ohio

Once you have obtained your EIN and Articles of Organization to form an S-Corp, you must file Form 2553, Election by a Small Business Corporation, to apply for S-corp status. Filing a form 2553 should be done 75 days after the formation of your S-Corp, or not more than 75 days after the beginning of the tax year in which the election is to take effect.

If your LLS-Corp has passed the deadline of 75 days, you must also file Form 8832, Entity Classification Election, in order to opt to be taxed as a corporation. Then you would send Form 2553 and Form 8832 jointly by certified mail from the USPS. In Ohio, you can send your form 2553 to the Department of the Treasury Internal Revenue Service Center – Kansas City, MO 64999 Fax: 855-887-7734.

Advantages of Starting an S-Corporation in Ohio

Filing an S-Corp in Ohio has numerous benefits and advantages.

  • Writing Off Losses: With S-corp, owners can deduct business losses from their individual income statements. If the company loses money in the first few years, it may balance its other sources of revenue. Even so, understand the shareholder loss limitations set by the IRS.
  • Pass-Through Taxation: Starting an S-Corp is the widely known advantage in forming this kind of business structure since an s-corp uses a pass-through taxation structure. The company does not pay twice the tax in this kind of taxation. Because of this structure, most start-ups and entrepreneurs in Ohio apply for an S-Corp LLC.
  • Qualified Business Income Deduction: A qualified business income, or QBI, is the total of all qualified items of income, gain, deduction, and loss from any qualified trade or business, including S-Corp. With this, S corp owners may deduct up to 20% of their eligible earnings under the Tax Cuts and Jobs Act.

FAQs

What is an S-Corp in Ohio?
An S-Corp in Ohio is a type of business structure recognized by the state that combines the liability protection of a traditional corporation with the tax benefits of a partnership.
How do I start an S-Corp in Ohio?
In Ohio, the first step to starting an S-Corp is to file articles of incorporation with the Ohio Secretary of State. You will also need to obtain an Employer Identification Number (EIN) from the IRS, create corporate bylaws, and hold a meeting of the incorporators or directors.
What are the benefits of an S-Corp in Ohio?
An S-Corp in Ohio provides personal liability protection for its owners and allows for pass-through taxation, meaning business profits and losses are reported directly on the owners’ personal tax returns. It also gives the owners the ability to raise capital by selling stocks or issuing bonds.
What corporate formalities must I follow when running an S-Corp in Ohio?
When running an S-Corp in Ohio, it is important to follow corporate formalities such as maintaining corporate records, holding regular directors and shareholders meetings, and filing annual reports.
Do I need to appoint a registered agent for my S-Corp in Ohio?
Yes, it is required by Ohio law that all corporations appoint a registered agent to receive service of process on behalf of the company.
How much does it cost to start an S-Corp in Ohio?
The cost to start an S-Corp in Ohio can vary depending on the complexity of the business. Generally, the cost of filing the articles of incorporation is $125, while the cost of obtaining an EIN is free.
What paperwork do I need to form an S-Corp in Ohio?
In order to form an S-Corp in Ohio, you will need to file articles of incorporation, create corporate bylaws, obtain an EIN from the IRS, and hold a meeting of the incorporators or directors.
How long does it take to form an S-Corp in Ohio?
It typically takes 4-6 weeks to form an S-Corp in Ohio from the time the articles of incorporation are filed with the Secretary of State.
What taxes do I need to pay when running an S-Corp in Ohio?
An S-Corp in Ohio is subject to federal income taxes, and the owners must also pay self-employment taxes on their share of the profits. The S-Corp may also need to pay additional taxes such as Ohio sales taxes and Ohio unemployment taxes.
What are the requirements to maintain my S-Corp in Ohio?
To maintain an S-Corp in Ohio, you must file an annual report with the Secretary of State and pay the annual franchise tax. You must also adhere to corporate formalities such as maintaining corporate records, holding regular directors and shareholders meetings, and filing annual reports.
Are there any restrictions on who can own an S-Corp in Ohio?
Yes, there are restrictions on who can own an S-Corp in Ohio. Generally, the owners must be individuals, not corporations, and they must be US citizens or resident aliens.
Is an S-Corp in Ohio required to hold regular directors and shareholders meetings?
Yes, an S-Corp in Ohio is required by law to hold regular directors and shareholders meetings.
Is there a fee to form an S-Corp in Ohio?
Yes, there is a fee to form an S-Corp in Ohio. The current filing fee for Articles of Incorporation is $125.
Do I need to file a separate tax return for my S-Corp in Ohio?
Yes, you will need to file a separate tax return for your S-Corp in Ohio. You will also need to pay the Ohio Franchise Tax.
How do I obtain an Employer Identification Number (EIN) for my S-Corp in Ohio?
You can obtain an Employer Identification Number (EIN) for your S-Corp in Ohio by filing Form SS-4 with the IRS.
What is the Ohio minimum wage?
The current Ohio minimum wage is $8.80 per hour.
What are the requirements for forming an S-Corp in Ohio?
The requirements for forming an S-Corp in Ohio include filing Articles of Incorporation, creating a corporate bylaw document, appointing a registered agent, and obtaining any necessary licenses or permits.
What are the benefits of forming an S-Corp in Ohio?
The benefits of forming an S-Corp in Ohio include limited liability for the business owner, pass-through taxation, and favorable tax treatment.
What types of businesses can form an S-Corp in Ohio?
Any type of business can form an S-Corp in Ohio, including corporations, limited liability companies, sole proprietorships, and partnerships.
Can I form an S-Corp in Ohio without a lawyer?
Yes, you can form an S-Corp in Ohio without a lawyer. However, it is recommended that you consult a lawyer to ensure that you are in compliance with all applicable laws and regulations.
Can I form an S-Corp in Ohio online?
Yes, you can form an S-Corp in Ohio online by submitting your Articles of Incorporation to the Ohio Secretary of State.
What is the Ohio Corporate Franchise Tax?
The Ohio Corporate Franchise Tax is a tax imposed on the net income of corporations doing business in Ohio. The rate of the tax is 9% for S-Corps.
How often do I need to file taxes for my S-Corp in Ohio?
You will need to file taxes for your S-Corp in Ohio every year.
Who can be a shareholder of an S-Corp in Ohio?
Any individual or business entity can be a shareholder of an S-Corp in Ohio.
Do I need to keep corporate records for my S-Corp in Ohio?
Yes, you will need to keep corporate records for your S-Corp in Ohio, including minutes of board meetings, financial statements, and any other documents related to the business.
What is the Ohio Secretary of State?
The Ohio Secretary of State is the government agency responsible for the filing of business documents and the administration of business related services in the state of Ohio.
Do I need to hold regular meetings for my S-Corp in Ohio?
Yes, you will need to hold regular meetings for your S-Corp in Ohio. The minutes of these meetings must be kept in the corporate records.
What are the requirements for an S-Corp in Ohio to be taxed as a pass-through entity?
The requirements for an S-Corp in Ohio to be taxed as a pass-through entity include having no more than 100 shareholders, having only one class of stock, having all shareholders be U.S. citizens or residents, and the company being located in the United States.
Does Ohio have any special requirements for S-Corp shareholders?
Yes, Ohio has special requirements for S-Corp shareholders, including that they must be U.S. citizens or residents and cannot have more than 100 shares of stock in the company.
Does Ohio require employers to provide unemployment insurance coverage for S-Corp employees?
Yes, Ohio requires employers to provide unemployment insurance coverage for S-Corp employees. The employer must register with the Ohio Bureau of Unemployment Compensation and pay the required taxes.
What is the deadline to file taxes for my S-Corp in Ohio?
The deadline to file taxes for an S-Corp in Ohio is April 15th of each year.
How do I dissolve an S-Corp in Ohio?
To dissolve an S-Corp in Ohio, you must file Articles of Dissolution with the Ohio Secretary of State. You will also need to notify creditors, shareholders, and the IRS of the dissolution.

Also Read

Why Ohio S Corporation is So Important

First and foremost, choosing to operate as an S Corporation in Ohio can provide significant tax advantages. Unlike a traditional C Corporation, which is subject to double taxation on both corporate profits and dividends paid to shareholders, an S Corporation allows profits to pass through to the shareholders’ personal tax returns, where they are only taxed at the individual level. This can result in considerable tax savings for the business owners, making it an appealing option for small businesses looking to maximize their profits.

In addition to tax benefits, operating as an S Corporation in Ohio can also provide important liability protection for business owners. By forming an S Corporation, owners can separate their personal assets from the business assets, which can shield them from personal liability in the event of a lawsuit or financial difficulties. This additional layer of protection can provide peace of mind for business owners, allowing them to focus on growing their companies without the fear of losing their personal assets.

Furthermore, establishing an S Corporation in Ohio can also create greater credibility and professionalism for a business. Many customers, suppliers, and potential investors view S Corporations as more reputable and trustworthy than other business structures, which can help attract and retain customers and partners. By operating as an S Corporation, businesses can enhance their brand image and establish themselves as serious players in the market.

Additionally, choosing to register as an S Corporation in Ohio can also provide flexibility in terms of ownership and management structure. Unlike other business entities, S Corporations can have a maximum of 100 shareholders, allowing for more investors to participate in the business. This can be especially beneficial for small businesses looking to raise capital or involve multiple family members or partners in the ownership of the company.

Overall, the decision to establish an S Corporation in Ohio can offer numerous benefits for small businesses looking to grow and succeed in a competitive market. From tax advantages to liability protection to increased credibility, operating as an S Corporation can provide a solid foundation for businesses to thrive and expand. By taking advantage of the unique benefits of an S Corporation in Ohio, entrepreneurs can position their companies for long-term success and growth.

Conclusion

In conclusion, starting an S-corp in Ohio is a strategic choice for entrepreneurs seeking the benefits of limited liability and favorable tax treatment. One can successfully establish an S-corp by following the outlined steps, including selecting a unique name, filing the Articles of Incorporation, obtaining necessary licenses, and adhering to state-specific regulations. Ultimately, this corporate structure offers a strong foundation for business growth and protection, making it a worthwhile consideration for those looking to launch a venture in Ohio.

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