How to Start an LLC in Indiana: IN LLC Guide 2023
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Indiana depends on its small enterprises and a culture of innovation. Small businesses accounted for 99.4% of all “Hoosier State” establishments in 2019. It comes as no surprise that Indiana experiences the annual emergence of fresh enterprises. The area is filled with cost-effective communities, providing an ideal environment for entrepreneurs to establish their ventures confidently.
Interested in forming an LLC in Indiana? Discover how to initiate an LLC in Indiana through our user-friendly manual. We’ll guide you through the essential procedures, ensuring seamless registration and setting you up for future prosperity.
How to Start an LLC: Indiana 7 Step Guide
A deeper understanding of starting an Indiana LLC can significantly boost your small business’s credibility and pave the way for future success. Are you ready to take the plunge? Simply follow this comprehensive 5-step guide.
Step 1: Choose a Name For Your Indiana LLC
To ensure that your LLC in Indiana stands out from other businesses in the state, choose a unique name. Before becoming too fond of a particular name, search the entity name database and confirm that it has yet to be taken.
If you have already found the perfect name and it meets all the necessary criteria, you can reserve it for $10 and keep it on hold for up to 120 days while you complete the remaining paperwork.
What Are the Name Requirements?
When naming your LLC in Indiana, you have the freedom to be as creative as you like. However, specific criteria must be met when selecting a name.
- Your name must incorporate the term Limited Liability Company, which can be represented through its abbreviations (LLC or L.L.C.)
- Avoid using terms or acronyms that might create a false impression of an affiliation with a government entity, such as the FBI, NSA, or State Department
- If you intend to include the term ‘bank,’ you must secure approval from the Indiana Department of Financial Institutions
- Your chosen name must be distinct from any other business name currently in use or reserved within Indiana
What Else Can My LLC’s Name Be Used For?
Once you have verified the availability of your desired name for your LLC, check if it’s being used as a web domain. Even if you don’t currently require a business website, having one in the future may be beneficial. If the name is already taken as a domain, consider selecting a different name. If your desired domain name is available, purchase it to prevent others from acquiring it.
Step 2: Choose a Registered Agent
Knowing how to start an LLC in Indiana is merely the initial step. Another crucial aspect is determining the individual responsible for handling communications within the LLC. This person, known as a registered agent, plays a vital role in conveying pertinent financial and legal details to all members of the LLC. This agent must be an actual person, with readily available contact information to ensure prompt information delivery.
Although it’s possible for the owner or a member of the LLC to serve as the registered agent, they’re not required to have any affiliation with the company. Any trustworthy individual who meets certain criteria can be chosen as long as they’re at least 18 years old, possess a physical address, and give their consent to take on this responsibility.
Step 3: Decide Between a Multi-Member or Single-Member LLC
Whether your LLC has multiple members or just one, the filing requirements remain consistent. The only distinction lies in the taxation process at year-end. In the case of a single-member LLC, net earnings are recorded on the member’s tax return as income categorized as ‘self-employed.’
On the other hand, in a multi-member LLC, the LLC and each member must file separate tax returns. Each member must submit a K-1 form and their individual tax returns.
Step 4: File Your Articles of Organization
The articles of organization document encompasses all the necessary details for setting up your LLC in Indiana.
- Name of your LLC
- The physical address of your LLC’s registered office and the registered agent’s name at that address
- The intended duration of your LLC, specifying whether it has a limited operational timeframe or operates perpetually until dissolution by members
- Identification of designated managers (if applicable)
- Inclusion of any additional details outlined in the operating agreement as agreed upon by the members
You can complete the fillable PDF form for articles of organization either independently or with assistance from an online service or lawyer.
Where Do I File and How Much Does It Cost?
If you’re interested in learning the process of establishing an LLC in Indiana, you’re also curious about the associated expenses. Once you have diligently completed and accurately filled out the necessary form, there are two options for submission: submitting it online for a fee of $95 or mailing it along with a check payable to the Secretary of State for $100.
Secretary of State Business Services Division
302 West Washington Street
Indianapolis, IN 46204
Step 5: Get an Indiana LLC EIN
Obtaining an Employer Identification Number (EIN) from the IRS is completely free of charge. This number serves the purpose of identifying a business entity and facilitating tax reporting. It functions as a Social Security number (SSN) for companies.
What is the significance of having an EIN? An EIN is necessary for the following reasons:
- To establish a business bank account in the company’s name
- For federal and state tax-related matters
- To recruit employees for the company
How can I obtain an EIN? The business owner can acquire an EIN from the IRS at no cost after establishing the company. This process can be completed through online submission or by sending a request via mail.
FOR INTERNATIONAL APPLICANTS: You don’t need an SSN to get an EIN.
Step 6: File the Business Entity Report
To comply with state regulations, LLCs must typically submit an annual report. However, LLCs in Indiana are instead obligated to file a biennial report known as the Business Entity Report with the Secretary of State.
The Business Entity Report must be submitted every two years at the end of your LLC’s anniversary month. The month in which you initially registered your business. The filing fee for this report is $32 if filed online and $50 if mailed.
Step 7: Keep Your Company Compliant
Indiana LLC Licenses & Permits
LLC proprietors are obligated to adhere to regulations set by the federal, state, and local governments. The fees and prerequisites for licenses and permits will differ based on the specific type of business license required.
Indiana LLC Tax Filing Requirements
Staying informed about the tax requirements for Indiana LLCs is crucial. Depending on your business’s nature, you may need to register for various forms of taxation.
If you have a physical product to sell, it’s necessary to collect sales tax. You can apply for a seller’s permit on the Indiana Department of Revenue website to do this.
The state sales tax in Indiana is 7%, and there are no extra local sales taxes at the county or city level.
If you plan on employing individuals, you must complete the registration process for Unemployment Insurance Tax through the Indiana Department of Workforce Development and Employee Withholding Tax through the Department of Revenue.
Indiana imposes a uniform 3.15% flat rate for individual income tax, requiring taxpayers to submit annual state tax returns by April 18. For additional information regarding the state’s income tax system, please visit the official website of the Indiana Department of Revenue.
To satisfy this requirement, either Form 1065 (for multi-member LLCs) or Form 1040 Schedule C (for single-member LLCs) must be used to report your federal income tax.
Hiring Employees in Indiana
To ensure compliance with the law when hiring employees, it’s important to follow these steps.
- Confirm the eligibility of new employees to work in the United States
- Submit employee information to the state as “new hires”
- Arrange for workers’ compensation insurance coverage for your workforce
- Deduct and remit employee taxes
- Display workplace compliance posters conspicuously within your workspace.
Discover the array of employer services on the Indiana Department of Workforce Development website.
Read more: Indiana Anonymous LLC
How to Start an LLC – Buyer’s Guide
What Is an LLC?
A Limited Liability Company combines the advantages of a partnership or Sole Proprietorship with the added protection against risk that comes with a corporate structure. Similar to shareholders in a corporation, the owners of an LLC, known as members, have limited liability. This means their liability is only up to what they have invested in the company and doesn’t extend beyond that to cover any corporate debts or losses.
By default, LLC members are taxed based on their income, just like owners of Sole Proprietorships or General Partnerships. This is commonly referred to as a “pass-through” tax structure. However, an LLC can also be taxed as a C corporation (C-corp) or an S corporation (S-corp), provided it meets certain requirements. Many small business owners opt for forming LLCs due to their simplicity and flexibility in taxation and management structure.
How Much Does It Cost to Set up an LLC in Indiana?
Starting an LLC in Indiana incurs a fee of approximately $100 when submitting paperwork via mail, while online filing reduces the cost to around $97. Apart from these state fees, there may be additional expenses if you opt to reserve a name beforehand, utilize the services of an LLC service provider for document preparation and submission, or hire a professional registered agent.
Do I Need to Get a DBA or an Assumed Name for My Business?
Most LLCs don’t require a DBA. The LLC’s name can function as the company’s brand name, allowing you to receive payments and checks under that same name. Nevertheless, there may be instances where you want to register a DBA to operate under a different name for business purposes.
Ways to Create an Indiana LLC
Before delving into the procedure, it’s essential to determine the optimal approach for establishing your Indiana Limited Liability Company.
Given the abundance of information provided in this guide and on the Indiana Secretary of State site, entrepreneurs mindful of their budget may opt for the do-it-yourself approach, which is most suitable for starting their LLC. For uncomplicated and direct LLCs, individuals can navigate through the process independently.
Using an LLC Formation Service
Specializing in filing necessary documents for LLC formation, online LLC services are a convenient solution for Indiana business owners who already have their hands full with managing a small business. The cost of hiring an LLC service is often justified by its benefits. These may include guaranteed acceptance by the state, assistance with EIN application, registered agent service, and drafting operating agreements.
There’s flexibility when it comes to customizing these services to suit individual needs. Several choices are available in the market for those who prefer to explore different options and find the best fit for their requirements.
Filing paperwork can be stressful. Still, with ZenBusiness, you don’t have to worry. This company provides a wide range of LLC services that prioritize setting up your business accurately by completing and delivering the necessary paperwork to the appropriate government branch in your state.
While their services come at a cost, customers rave about getting excellent value for their money when working with ZenBusiness.
Embarking on a business venture necessitates the completion of various legal documents mandated by the state, which can often perplex inexperienced entrepreneurs. Northwest provides comprehensive business services to guide business owners in procuring and completing the necessary paperwork on time, ensuring compliance with government regulations.
Apart from facilitating LLC establishment, Northwest offers an extensive range of ancillary services, including registered agent services, tailored to assist new owners throughout their entrepreneurial journey.
Incfile provides a comprehensive selection of resources to assist novice entrepreneurs in determining the most suitable type of business for them. Incfile offers support with the necessary paperwork and filing processes, as well as clarifying terms such as registered agent, articles of organization, and EIN. The company is highly regarded and has received positive customer feedback online.
Hiring an Attorney
While it might not be ideal for all startups, hiring a lawyer could be a favorable route to consider. This is particularly true for companies that have investors or intricate financial arrangements.
Common Questions About Indiana LLCs
Can We Set up an LLC for Free?
While the cost to register an LLC varies by state, there’s a fee to register in every state. While some companies 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 Taxes Do LLCs in Indiana Pay?
Most LLCs utilize pass-through taxation, where the members report their portion of the business’s profits and losses on their tax returns. Only if an LLC chooses to be taxed as a C-corporation will it be required to pay corporate income tax.
In this case, LLCs taxed as C-corporations must pay federal corporate tax along with a 4.9% Indiana Corporate Income Tax. To effectively manage your taxes, consult a small business accountant who can provide guidance tailored to your situation.
How Often Do I Need to Pay Employees?
In Indiana, employers must pay wages at least twice a month, sometimes every two weeks.
To successfully start an LLC in Indiana, there are several essential procedures to follow before and after forming your business entity. By ensuring that you possess the necessary documentation, fulfill all required fees accurately, and strive to maintain a positive standing, your Indiana LLC will have the opportunity to flourish and prosper for an extended duration.