How to Form an LLC in Indiana
Introduction
Looking to form an LLC in Indiana? The process can seem overwhelming, but with the right preparation and a little help from your friends at LegalZoom, it’s easier than you think. Last time we checked, there were more than 229,000 active limited liability companies in Indiana. That’s a lot! So what makes this state so popular for business owners? Well first of all, it’s got one of the lowest tax burdens in the country—which is especially appealing to small businesses just starting out or looking for ways to reduce their overhead costs. Second of all, Indiana offers some really valuable incentives for new companies that are incorporated within its borders; including its Strategic Fund which offers grants up to $3 million per project (up to $500K per year).
Choose a Name for Your Indiana LLC
- To determine if your chosen name satisfies the requirements of an Indiana LLC, you’ll need to check that it meets all of the following criteria:
- Your business name must be distinguishable from other entities in Indiana with similar names, including corporations and limited partnerships.
- Your business name must not be a generic word or phrase, such as “the Smiths” or “the Joneses.”
- Your business name cannot contain any words that are prohibited by the Indiana Code (e.g., certain political or religious references).
- You cannot use a reserved word in your company name (e.g., Bank).
Provide an Address for Your Indiana LLC
When you’re ready to form an LLC in Indiana, the first step is providing an address for your company.
You can use any address you want, as long as it’s a legal address and not your home. If you don’t have another address, then you’ll need to provide proof of residency with one of the following:
- A utility bill (such as electricity or cable) that has been issued within 90 days before filing your Articles of Organization and that shows at least one owner of the LLC residing at that location;
- Tax documents (like a W-2 or 1099) issued within 90 days before filing the articles; or
- A statement from an owner stating their name and address.
Designate a Registered Agent in Indiana
A registered agent is an official representative of your business. The registered agent must be an individual or company located in Indiana, and they are responsible for receiving service of process on behalf of your LLC in the event that you are sued. Service of process is when someone files a lawsuit against you and sends a copy to your registered agent so they can officially inform you about it. This way, if there’s some legal action against your LLC, the court will know where to reach you.
If you don’t have someone act as a registered agent for your LLC (or don’t want to), then Indiana may appoint an attorney as one for free! However, we recommend finding a local person who lives nearby if possible because it’s easier than having them travel across state lines every time there’s something important happening with the business.
File Articles of Organization in Indiana
- File Articles of Organization in Indiana
In order for a business to be legally recognized as an LLC, it must file articles of organization with the Secretary of State. The form that you will need to fill out is called “Form 1040-ES” and can be found on the Indiana Secretary of State website. The filing fee for this document is $100 and must be paid online using a credit card or debit card after you have submitted your application form.
The address that you should include on your article of organization depends on whether or not your LLC has already received its federal employer identification number (EIN). If this number has already been issued, simply enter it into the appropriate box located near the top right corner of Form 1040-ES before submitting it; otherwise, enter PENDING under these same circumstances.
Create an Operating Agreement for Your Indiana LLC
An LLC operating agreement is a document that sets out the rules for how your LLC will be run. It should include how members can add or remove other members, how much money each member contributes to the business, and what happens if one of the members dies or becomes disabled.
An operating agreement is not required by law, but it’s very important that you have one. A written operating agreement helps prevent conflict between members, which could otherwise lead to costly lawsuits and an end to your business relationship with a former partner.
If you do decide to create an operating agreement, it should be in writing and filed with the Secretary of State (if you’re creating an Indiana LLC). The Secretary of State cannot approve or reject any documents submitted for filing; their job is strictly administrative in nature—they simply accept documents filed by their office holders as evidence that they were presented as required under statute law.
Comply With Other Tax and Regulatory Requirements
You’ll also have to comply with a variety of tax, regulatory and other requirements. These include:
- Paying a filing fee.
- Filing an annual report.
- Paying state income tax.
- Paying sales tax (if applicable).
- Paying franchise taxes, which are only applicable if you’re doing business under a name that isn’t your own legal name or “doing business as” (DBA) name; these vary depending on the type of product or service you provide, so check with your local government office for details.
- In some cases, paying unemployment insurance tax by contributing a percentage of each employee’s wages into an account managed by the state government.
This is what needs to be done to form an LLC in Indiana.
Before you start the process of forming an LLC, it’s important to understand that forming a limited liability company is not just about getting some paperwork filed with the state. You will have many decisions to make throughout the process and these decisions may affect how much money your business is able to save and how much risk it will be exposed to.
Before we get into what needs to be done for starting an LLC in Indiana, let’s first answer some common questions about limited liability companies and why they are beneficial:
What is an LLC?
An LLC (limited liability company) is a hybrid entity with characteristics of both corporations and partnerships. A corporation has perpetual existence unless dissolved by law or statute while partnerships cease at death of either partner. An LLC provides similar protection as corporations but unlike corporations which are governed by statutes, state laws regarding Limited Liability Companies vary from state-to-state resulting in significant differences between states on such things as taxation rules and organizational structures allowed within one type of business entity (e.g., single member vs multi member).
Conclusion
We hope the information provided in this article helps you to form a strong business entity that will protect your assets and help you succeed.
