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Start Your Business Venture With An LLC In Indiana

Start Your Business Venture With An LLC In Indiana

The Hoosier State is a great place to start your business. With its low corporate tax rate and access to large metropolitan markets, there are plenty of reasons to make Indiana the home of your new LLC. 

But what exactly is an LLC, what are the benefits, and how do you set one up? 

Let's take a look. 

Understanding Limited Liability Companies (LLCs)

In Indiana, there are four typical business structures available for entrepreneurs: sole proprietorships, partnerships, limited liability companies (LLCs), or corporations. An LLC is often the best choice for businesses with a small footprint and relatively few employees because of its simple structure, liability protection, and tax benefits. 

In short, an LLC can protect owners from personal liability for business debts or lawsuits and provide them with pass-through taxation that eliminates double taxation.

Considerations Before You Start An LLC In Indiana

Before forming an LLC in Indiana, it is essential to consider whether this business structure is proper for you. While there are many advantages to forming an LLC, there may also be some limitations depending on your particular needs.

For example, banks may require more than one owner before lending money to a company that has been formed as an LLC. Additionally, if you plan on having more than 75 members in your LLC, it may not be the best option since this type of business structure limits membership size by law.  

Steps To Form An LLC In Indiana

To start forming an LLC in Indiana, your first action must be to file Articles of Organization with the Secretary of State, specifically the Business Services Division.

You can apply online or by mail. The application must include the name of your LLC, its purpose, the registered agent's name, their address, and the organizer's contact information. Once you submit your application, it will typically be processed within 1-2 business days.  

The next step is determining whether your LLC will be member-managed or manager-managed. All members are responsible for managing the business operations in a member-managed LLC. On the other hand, in a manager-managed LLC, there is typically one designated manager who oversees operations.

It's essential to decide which structure is best for your business before getting started, as this will determine how future decisions are made within the company. 

Finally, if you already have an existing LLC that you're expanding into Indiana, you'll need to file a Foreign LLC registration instead of Form 49459 mentioned above. One can also find this form (Form 5725) on the Secretary of State's website. It must be accompanied by a Certificate of Existence from your domestic state as proof that your home state recognizes it as a valid entity doing business there.

Choosing The Perfect Name For Your Indiana LLC

Starting an LLC in Indiana is a great way to get your business up and running. But before you can do that, you need to choose a name for your company. The name should comply with all of Indiana's naming requirements. 

For starters, avoid offensive words or phrases, and use a name that is easy to find online. Your business's standing will determine how people perceive your company and how easily they can find it online. 

You should also ensure that this is the only business that has claimed the name you want for your LLC. An excellent way to ensure this doesn't happen is by using the Secretary of State database, which allows you to search for registered business names in Indiana. Additionally, try searching for similar names on social media platforms like Twitter, Facebook, and Instagram to see if anyone else has already claimed them. 

Once you have chosen a few potential names, run them by friends or colleagues familiar with your industry before making a final decision. They might offer advice or insights into potential names that weren't immediately obvious to you during your research process.

The Benefits Of An Operating Agreement For Your LLC In Indiana

In Indiana, establishing an operating agreement is not required by law; however, it is highly recommended in order to safeguard yourself and your LLC if any legal issues arise. Such agreements are designed to outline the manner in which you conduct business with your LLC.

An operating agreement includes ownership structure, member contributions, management responsibilities, voting rights, profit distributions, dispute resolutions, and more. Without one, members may be personally liable for any debt or litigation that arises from the business operations. Additionally, an operating agreement allows you to define specific roles within your LLC so that everyone is on the same page about who does what when it comes to running the business. 

Your operating agreement should include information such as

  • information about the Articles of Organization
  • the way profits and losses will be divided
  • name and address of the registered agent
  • the purpose of the business
  • duration of the LLC
  • members and their contribution
  • LLC's principal address
  • dispute resolution process
  • the LLC's name
  • management structure
  • procedure for admitting new members, as well as outgoing members

You should also include details about how you want to run your business operations. It's important to note that state laws differ slightly regarding what needs to be included in an operating agreement, so consult with a lawyer before signing anything. 

How To Ensure Your LLC Is Registered And Up-to-Date In Indiana

After you register your Limited Liability Company (LLC), there are a few steps you should take to ensure that your LLC is registered and up-to-date according to the laws of the state of Indiana.

If you realize there are errors on your registration form and changes you would like to make, you must submit the Articles of Correction to the Indiana Secretary of State. You can find this form online and fill it out with the information that you must correct. Be sure to double-check all information before submitting it, as any mistakes could cause delays in processing. 

You need an Employer Identification Number (EIN) if your LLC has employees. This number is used for tax purposes and can be obtained from the Internal Revenue Service's website for free. It should take about fifteen minutes to complete the online application process.

On the anniversary of your LLC's creation, it is mandated that you submit a biennial business report to the Indiana Secretary of State every two years. This report aims to provide basic information about your company and its management structure, such as contact information, ownership details, and registered agent name.

This report also serves as an updated statement that records any changes in ownership or other significant events since filing the original Articles of Organization document. 

LLC In Indiana - FAQ

How Much Does An LLC Cost In Indiana?

The cost to file your Articles of Organization with the Secretary of State Business Services Division is $95-$100, depending on whether you're filing online or by mail. You may also have additional costs associated with setting up your LLC, such as filing fees for any documents required by local or county laws. Additionally, you may need to pay annual fees or taxes depending on where you operate your business. 

What Is An EIN And Why Do I Need One?

If you're a business owner, the Internal Revenue Service (IRS) requires an Employer Identification Number (EIN) to recognize your company for tax purposes. This number is generated with nine digits and serves as a unique identifier for every entity in their system.

An EIN is required if:

An EIN helps the IRS track income and expenses related to your business. It also serves as proof of identity when dealing with financial institutions or companies requiring it. In addition, some states may require you to get an EIN before doing business within their borders.

The good news is that getting an EIN doesn't have to be complicated or expensive.

The IRS offers two ways of obtaining an EIN—online or by mail—and both take only minutes to set up. To apply online, visit the IRS website and complete the application form.

Alternatively, you can print out and complete Form SS-4 and mail it to the IRS address listed on the form. Whichever method you choose, once your application has been approved, you will receive your new Employer Identification Number from the IRS within four weeks of applying.

What Is A Registered Agent And Why Do I Need One To Start An LLC In Indiana? 

Starting an LLC in Indiana requires you to appoint a registered agent. A registered agent (also known as a resident agent) is the person or entity authorized to receive service of process and other official legal documents and notices on behalf of your LLC.

If you decide to use someone else as your registered agent, they must meet the following criteria:

  • Entities (or companies) must provide registered agent services
  • The agent needs to have an address in Indiana
  • A qualified agent must be physically present and ready to accept documents during regular business hours

The purpose of having a registered agent is for them to receive official mail on behalf of your LLC if you should ever need to be served any court papers or other legal documents. In addition, having a registered agent helps maintain compliance with state regulations by ensuring that all required notices are received promptly.

If there are any changes in laws or regulations, a registered agent will inform you about them as soon as possible.

Choosing someone other than yourself as your registered agent allows you to remain anonymous when conducting business with clients and customers, providing additional privacy and protection against potential lawsuits.

Conclusion

When you start an LLC in Indiana, you need to ensure that your LLC is registered, up-to-date, and complies with the state's laws. 

Following the above steps will help you make sure your LLC is in good standing. 

Further reading on MikeVestil.com: Want to learn about the cost of doing business in various states?

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Mike Vestil

Mike Vestil is an author, investor, and speaker known for building a business from zero to $1.5 million in 12 months while traveling the world.

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