Starting LLC in Indiana: Peculiarities & Detailed Manual
Want to start an LLC in Indiana? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in Indiana, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An Indiana LLC: The Notion & Essence
Many Indiana business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of Indiana puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet Indiana’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of Indiana obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with Indiana’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in Indiana and will help you to start an LLC. The agent can be an Indiana resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner. The State of Indiana notifies:
According to the law, Indiana state requires all corporations, LLCs (entities in general) to have a registered office and agent. A statutory agent acts on behalf of a company receiving legal and other documents, correspondence, tax, and other notices. Furthermore, some states require lawsuits must be filed in person. Thus, the agent is your assistance who makes a better and orderly process to run your company.
Honestly, many businessmen try to save their money and name a friend, employee as a registered agent or act by themselves. It is not always a good idea. If you use a statutory agent service, you can be sure the job will be done well because the agent is an expert in his job and it ensures that documents will be handed over to the right person.
If you do business in more than one location, a statutory agent service may cover multiple states. Also, it makes some privacy and consistency. Always be sure your agent is capable of doing his job promptly and professionally. It is essential for a successful business.
A registered agent guarantees an excellent reputation for your Indiana LLC. Also, if your business gets worse, Indiana can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in Indiana, you must file the Articles of Association with the Indiana State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
Submit the form in two different ways: an online service or download a pdf mail. Click here.
How much does it cost to form an LLC: to set up an LLC in Indiana, you are required to pay a $100 fee.
How long does it take: Mostly, the entire process from applying for an LLC to receiving the documents by mail can take from 5 to 7 working days. Some filings that are filed online are processed during the business day though. Make sure your documents are on order and filed correctly so that the estimate of business days starts.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in Indiana, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
As for LLC taxes in Indiana, you will need to pay quite a few taxes based on the company’s activities. These include not only income tax but also sales tax, self-employment tax, and so on.
Seeing that your LLC is a flow-through entity – a sole proprietorship or partnerships (limited, general, and LLP) – you must pay income taxes on your tax returns. Nonetheless, an LLC can elect to be taxed as a corporation, and then it will be taxed to the state business income tax. If you are interested in it, read more here.
Most state-level income is from a sales tax. Indiana has a high sales tax rate – 7%, for the second-highest rate in the U.S., behind California. In addition, you will be forced to have a Registered Retailer Certificate (RRMC) to sell some goods and services from your business to a consumer legally. Find out more here.
If an entity has employees, it has to pay income taxes. Employers pay federal income tax from employees’ wages to deliver it to the state. There is a way to avoid these fees, which you can learn more about here.
It is not all – there are extra taxes you are required to pay. Depending on the industry, there are different specific taxes: motorsports and food taxes, fuel taxes, gaming taxes, etc. All these taxes give tens of billions of dollars in revenue. Many types of food are exempt from sales tax though. However, soft drinks, sweets are not exempt. You can find out more about that here.
Local Tax Business Demands
Fortunately, there is a particular online portal, INTax, which helps get rid of the guesswork of taxes and manage your corporate and business tax obligations. You can find all Indiana’s taxes there. To see more, click here.
Stage №6: Getting Business Licenses & Permits
Indiana does not have anyone single business license. However, not every Indiana business is required to have a license, and some types of business must have one or more licenses to operate and grow.
These various licenses are issued by state agencies. Here are some of the business activities:
- safety and health;
- date care services;
- fishing, hunting;
- trade and more.
Read more about the Small Association listings for federally regulated industries requiring licensure.
In addition to the state-specific tax rules, business requires to get different licenses/permits. There are over 400 licenses in Indiana, so you will need to have at least one of them. You can learn a vast list of business-specific licenses required by law.
Indiana Professional Licensing Agency gives help you resolve all issues related to government professional licenses.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the Indiana Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
Business income is used in tax reporting. In obedience to the Internal Revenue Service, business income may include income received from the sale of products or services. The form income reporting must be filed whether you made or lost money within a year. Contact Indiana INBiz to simplify your income/taxes reporting process.
Referring to the services of a qualified accountant
Indiana is different from others states. In Indiana, the report must be filed every two years with the Indiana Secretary of State. Here, you can find a guide to file the report correctly.