Limited Liability Company Lawyer (LLC)
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As trusted business attorneys serving the Greater Cincinnati area, we’ve helped countless Ohio entrepreneurs select the right business entity for their company. Need help forming a new business or adjusting its structure? Contact us online to Schedule A Consultation.
As an entrepreneur, you’re the inspiration behind your small business. You have a vision for what a company could be, and you push it into reality—sometimes by sheer willpower. However, determination alone isn’t enough to build a sustainable business.
To secure long-term success, you need to develop a deep appreciation for Ohio business law. You need to understand the different types of business structures and their various tax, employment and liability implications, or you need to partner with someone who does.
If you’re like most business owners, your talents are better spent on big-picture projects. Luckily, partnering with a dedicated business attorney can provide you with the ideal solution.
With unparalleled expertise in Ohio law, an experienced business lawyer can help you navigate compliance issues, taxes, employment, legal contracts, company restructuring and, perhaps most important, business formation. By helping you select the right business entity from the get-go, your attorney can help you circumvent countless challenges down the road.
One of the most commonly used and versatile business entities is the limited liability company (LLC). This article will explain everything you need to know about LLCs in Ohio, including the types, advantages and disadvantages of LLCs, the steps to forming one and how an experienced LLC lawyer in Ohio can help.
Ready to put your dreams into action? The best way to do due diligence is by consulting a legal professional to assist in the formation process. Luckily, you don’t have to look too far—Linn Legal is here for all of your legal needs. Contact us online to Schedule A Consultation.
What Is a Limited Liability Company (LLC)?
A limited liability company (LLC) is a type of business structure that blends features of partnerships and corporations. As multi-purpose entities, LLCs can be used to run a business or to hold assets, and may be formed for profit or nonprofit purposes in Ohio. The owners of an LLC are called members, and they are protected against personal liabilities.
- Single-member LLCs are the most common form of LLC and recognized in every state. These LLCs have single owners and are treated as sole proprietorships by the IRS.
- Multiple-member LLCs have multiple owners and are structured similarly to general partnerships. Although owners are responsible for company debts and obligations, their personal assets are protected.
- Member-managed LLCs are LLCs managed by members rather than by managers.
- Manager-managed LLCs are companies whose members select managers and ascribe their responsibilities. Owners can also manage the LLC but have no obligation to do so.
- Professional LLCs (PLLCs) are LLCs reserved for industries that require special licenses to practice and are ideal for doctors, lawyers and accountants.
- L3C companies are for-profit entities designed for humanitarian efforts that allow pass-through taxation similar to nonprofits.
- The right type of LLC for you will depend on a variety of factors, including the nature of your business and your specific financial situation and goals. Navigating the potential implications of your choice can be difficult, which is why it’s typically a good idea to work closely with an experienced LLC lawyer during formation.
An LLC is considered a disregarded entity if it only has one member or a partnership if it has more than one owner. For tax purposes, an LLC must have the same state and federal classification. There are many different types of LLCs available to Ohioans, including the following:
Benefits of a Limited Liability Company (LLC)
There are many benefits associated with LLCs, the most notable of which is that the owners (or members) only have limited liability in regard to company obligations. That means that a member’s individual assets can’t be used to satisfy the LLC’s debts and financial responsibilities.
LLCs come with the added benefit of perpetual existence, meaning they won’t be dissolved in the event of ownership changes, as well as a flexible management structure. Additionally, LLCs offer pass-through taxation, meaning the company’s gains, losses, income, deductions, credits and other tax items flow through to members.
Disadvantages of an LLC
Although limited liability companies offer many advantages, they also come with a few disadvantages, including cost. LLCs are typically more expensive to establish and maintain than partnerships; many states charge an initial formation filing fee and some charge ongoing ones. Additionally, transferring ownership of an LLC is more difficult than with a corporation, and in many cases, all members must approve alterations in ownership percentages.
Steps to Form an LLC
Forming an LLC can be a complicated, in-depth process, which is why it’s smart to work closely with an LLC lawyer from the beginning. Establishing this type of business entity in Ohio requires you to complete the following steps:
- Choose your LLC’s name. Ohio law requires that the names of new businesses be distinguishable from names of businesses registered with the Ohio Secretary of State, and that the names include some indication that it is an LLC. You can use the Secretary of State’s business name search tool to check availability.
- Appoint a statutory agent. Every LLC registered to do business in Ohio must appoint a statutory agent. This agent is an individual or company that accepts official and legal documents on your business’ behalf.
- Check whether you need a business license. Many different types of businesses require a business license in order to operate in Ohio. Find your industry on this checklist of licensing requirements to determine which licenses you’ll need.
- File articles of organization. If you’re forming a domestic LLC, file Form 533A with the Secretary of State (or file Form 533B if you’re establishing a foreign LLC). These articles will contain a variety of information, including the LLC’s name, effective date, period of existence and purpose, as well as signatures from members and the statutory agent.
- Draft an operating agreement. Ohio doesn’t require you to draft an operating agreement, but doing so can be helpful in several ways. It outlines the LLC’s governing structure, as well as each member’s rights, duties and shares.
- Ensure compliance with employer obligations. If your LLC has employees, you’ll need to report employee information to the Ohio New Hire Reporting Center within 20 days of hiring or rehiring. You’ll also need to purchase workers’ comp insurance from the state and establish an unemployment compensation tax account.
- Pay your business taxes. As a pass-through entity, an LLC does not pay income taxes. Rather, each owner will be responsible for paying federal and state taxes on their share of profits, unless an LLC elects to be taxed as a corporation.
- Comply with federal requirements. In addition to meeting state law requirements, you’ll also need to ensure federal compliance. This includes applying for a federal employer identification number (EIN), paying federal self-employment taxes and withholding Social Security and Medicare taxes from employees.
Frequently Asked Questions About LLCs
If this is your first deep dive into forming an LLC in Ohio, you probably have a lot of questions. Don’t worry—the LLC attorneys at Linn Legal can help. Reach out to an experienced business attorney to explore whether an LLC is right for you. In the meantime, check out the answers to some of our most frequently asked questions.
- Who are LLCs best for?
Although many different types of individuals, businesses and organizations can benefit from establishing an LLC, this type of business entity typically offers the most benefits to start ups and small- and medium-sized businesses. Most notably, registering and operating as an LLC provides these small business owners with liability protection for personal assets, pass-through taxation and credibility. - Is an LLC a Corporation?
An LLC is a distinct business entity with many differences from a corporation. However, depending on elections made by an LLC’s members, the IRS may treat it as a corporation, partnership or disregarded entity, and apply taxes obligations accordingly. - Who manages an LLC?
An LLC can choose to be member-managed or manager-managed. Whereas member-managed LLCs allow each member to act as an agent on behalf of the company, a manager-managed LLC delegates operational authority to designated managers. The right choice for you will depend on many factors, including the LLC’s size, industry and scope of operation. - Why do I need an LLC?
The simple answer is that you might not. The right business entity for you depends on a wide variety of factors, including your organization’s industry and financial goals. That’s why it’s a good idea to seek legal advice from a trusted business attorney before starting the LLC formation process.
Linn Legal: Trusted Limited Liability Company Lawyers Serving Cincinnati
You’ve dreamed about starting your own business or organization for a long time. When you’re finally ready to make your goals a reality, it’s important to do due diligence in the formation process. The best way to do that is by partnering with an LLC lawyer in Ohio who has experience establishing LLCs for companies in a wide range of industries.
Luckily, you don’t have to look too far for a top-tier legal professional. The LLC attorneys at Linn Legal have the expertise, resources and proven track record you need to make sure your business is set up for long-term, exponential success.
Ready to get started? Contact Linn Legal online to schedule a free initial consultation or call our law firm at (513) 426-9443 to speak with a talented legal expert today.
