Start an Ohio Corporation

Step 1: Name Your Ohio Corporation

Naming your corporation is an important first step since this is essentially your business’s primary identity. Here are a few things to consider during this step.

Ohio Corporation Naming Rules

According to Ohio law, the name must be distinguishable from any other domestic or foreign:

• Nonprofit or for-profit corporation
• Limited liability company (LLC)
• Limited liability partnership (LLP)
• Limited partnership (LP)
• Trade name
• Reserved name

Your proposed corporation name must also include one of the following words or abbreviations: “company,” “co.,” “corporation,” “corp.,” “incorporated,” or “inc.”

Ohio Corporation Name Restrictions

As for restrictions, the name can’t contain words or phrases that are generally considered a slur against an ethnic group, religion, gender, or heredity. It also can’t contain any profanity or improperly imply that the business is affiliated with a government agency. Banks, trusts, insurance agencies, and cooperatives must also follow entity-specific naming guidelines.

Check for State Trademarks

There are a few searches you should do to see if the name you want to use is available. First, conduct a business name availability search on the Secretary of State’s website. You can also use this search engine to check for Ohio trademarks and service marks registered with the state. That way, you can make sure the name you want isn’t trademarked.

File a federal trademark with the USPTO

In addition to state-level trademarks, which apply only within the borders of a state, you may want to search the United States Patent and Trademark Office‘s (USPTO) online database to ensure no one else is using the name federally. If you decide to trademark your name with the USPTO, it will cost at least $225 per class of goods or services.

Federal trademarks need to be renewed every 10 years. You can also register a trademark at the state level, which is often quicker and easier to do; however, federal registration can come with broader protection.

Secure a domain name for your new business

One last search to conduct is an online domain name search. The results from this search will help you decide what to use for your company’s official website and email address.

Get a “doing business as” (DBA) name in Ohio

In the future, if you want to do business under a name that’s different from your corporation’s legal name, you’ll need to file a “trade name” or “fictitious name,” otherwise known as a “doing business as” (DBA) name, with the state for $25. This can be done by mail or online.

Though both use the same form, a “trade name” and a “fictitious name” are different things in Ohio. Trade names are required to be distinguishable from other Ohio business names (meaning you’ll need to use the business name search engine again), while fictitious names aren’t. Thus, trade names provide greater protection.

Step 2: Appoint Directors

The person or persons who actually file the paperwork to start a corporation are known as incorporators. One or more incorporators can sign their Ohio Articles of Incorporation and are responsible for appointing initial directors to form a board.

What are directors?

The board of directors oversees the corporation’s affairs and represents the interests of your shareholders. A director can be an incorporator, but it isn’t a requirement to join the board.

Hold your organizational meeting

If you plan to name your directors before filing the Articles of Incorporation, you’ll need to hold an organizational meeting. At this meeting, your group will take care of these tasks and more:

• Appoint directors
• Elect officers
• Create corporate bylaws
• Execute an incorporator’s statement
• Set the company’s fiscal year
• Authorize issuance of stock
• Select a corporate bank

Ohio doesn’t require you to name your directors in the Articles of Incorporation. If the directors aren’t named at the time of filing, the incorporators must meet with the shareholders to elect directors after registering with the state. At least one director must be appointed.

Step 3: Choose an Ohio Registered Agent

The next step is to choose a statutory agent to receive legal documents and correspondence from the state on behalf of your corporation. Items such as tax documents and service of process (notices of lawsuits) are served to statutory agents. In most other states, they’re called registered agents. Choose an agent who’s reputable, professional, and an excellent communicator.

Ohio Statutory Agent Requirements

Your Ohio corporation must always maintain a statutory agent. They can be an Ohio resident or a business entity that has a physical business address in the state and that is legally authorized to do business in Ohio.

You must provide a written appointment of your statutory agent with the Articles of Incorporation. A majority of the incorporators must sign this document. It must include a written acceptance of the appointment signed by the statutory agent and the agent’s name and Ohio street address.

Step 4: File the Ohio Articles of Incorporation

To officially form your corporation, you must file the Ohio Articles of Incorporation with the Ohio Secretary of State. The purpose of the articles is to register your business with the state.

What to include in the Articles

To file the Ohio Articles of Incorporation, you’ll need the following information:

• Name of corporation
• Location of the principal office in Ohio
• Number of authorized shares
• Type of shares
• Par value of shares
• Amount of initial stated capital, if any (this is optional)
• Appointment of a statutory agent, including name, address, and signatures of agent and a majority of incorporators
• Names and signatures of all incorporators

The number of shares you authorize to issue is up to you and the board of directors. You also have the option in Ohio to list a par value for your corporation’s stock. 

It’s also optional to list an effective date on the articles. A corporation legally exists once the Articles of Incorporation are filed; however, you can specify a later date for legal existence as long as it isn’t more than 90 days after filing. If an incorporator is filing near the end of the year, they will sometimes set the effective date to be January so as to avoid filing corporate taxes for the current calendar year.

The Articles of Incorporation are filed in the online portal and submitted with a $99 fee. Choose “Submit a Business Filing,” create or log into your account, complete the digital form, and pay the filing fee. You can also file by mail (the address is on the form).

How fast can I form my Ohio Corporation? 

If you’re ready to launch and don’t want to wait weeks for your paperwork to get processed, we can help. You can form your corporation in Ohio in as little as one day with our rush filing services. With our rush filing service, we prioritize your formation paperwork so you can get it filed with the Ohio Secretary of State within 1-3 business days for just $100 + state fees.

The Articles of Incorporation are also known as the Certificate of Incorporation in other states. When choosing which state to incorporate, consider the differences in costs, tax policies, business incentives, and corporate laws. Some states offer more benefits than others when it comes to forming and operating a business.

Step 5: Create Corporate Bylaws

The rules that govern the operation of your corporation are known as corporate bylaws in most states. However, Ohio divides these into two terms. “Bylaws” refer specifically to the rules for the board of directors, while the other rules governing the corporation are referred to as “regulations.” Both are created and adopted at your organizational meeting held before filing the Articles of Incorporation. 

What to include in the bylaws

Corporate bylaws and regulations can be amended as needed by the board of directors. Within these governing rules, you may want to include items such as:

• The purpose of your corporation
• The rights and responsibilities of shareholders, directors, and officers
• The qualifications for directors and officers, plus length of terms and how elections work
• Procedures for replacing directors
• Details about your management structure
• Committee appointments, purposes, and rules
• How stock can be sold or transferred
• A shareholder meeting schedule and rules
• How to handle disputes
• How to keep and handle company records
• How corporate bylaws/regulations can be amended

Ohio corporations can adopt corporate bylaws and regulations, but it isn’t required by law. However, it’s important to establish these so that your company is well organized. Adopting corporate bylaws/regulations helps establish your business as a legitimate enterprise. 

Step 6: Draft a Shareholder Agreement

Those who hold shares of stock in your company are called shareholders. A shareholder agreement is a legal document that protects the rights of shareholders and helps ensure they are treated fairly. The agreement includes details such as:

• Shareholder names and contact information
• Shareholder rights and responsibilities
• Number of shares issued
• Time commitments
• Voting rights
• Actions that shareholders can take
• How to amend the agreement
• How stock can be transferred or sold, including restrictions, if any
• How to distribute dividends
• How to handle the dissolution of the corporation

Shareholder agreements can also be drafted by using a customizable template. It isn’t something you have to file with the state. However, your corporation should keep it on file where shareholders can access it upon request.

Step 7: Issue Shares of Stock

Corporations are required to issue shares of stock after they’ve incorporated. The most you can issue is what was authorized in the Articles of Incorporation. Issuing shares is one way to reward initial investors in the company. It’s also a means of raising money to fund the corporation to help it grow. A share of stock is also called a security.

Shares can be issued privately to a group of private investors, employees, directors, founders, or others. On the other hand, you can make shares publicly available for purchase so that anyone can buy them. Public corporations must file quarterly statements with the U.S. Securities and Exchange Commission (SEC).

Shares can be issued only once, but they can be transferred or sold at a later date. Corporations are required to document how many shares they’ve issued and keep track of who holds them. For further state regulation information, contact the Securities Division of the Ohio Department of Commerce at (614) 644-7381. They also have an overview of Ohio’s securities laws.

Step 8: Apply for Necessary Business Permits or Licenses

A corporation often requires various permits and/or licenses to conduct business legally. It’s your responsibility to find and apply for them. Depending on your industry, you may need them at the local, state, and federal levels. There are over 250 required licenses in Ohio, including those for goods and services, such as:

• Accounting
• Barbers
• Chiropractors
• Cosmetology
• Dairy
• Engineering
• Insurance
• Notary public
• Optometry
• Plumbing
• Real estate
• Wineries

Search the state’s license database to see if there are any that your corporation may need. For local permits and licenses, try contacting your county, town, or city clerk’s office. Federal government agencies should also be contacted. Unfortunately, there’s not a single place to find all required business permits and licenses. To free your time and ensure compliance with the law, you can hire a business to search for you.

Step 9: File for an EIN and Review Tax Requirements

To hire employees, you’ll need to file for an Employer Identification Number (EIN). It’s a unique tax ID number that the Internal Revenue Service (IRS) issues to new employers. An EIN is also used when opening a corporate bank account and filing taxes.

Apply for an EIN online, by mail, or by faxing the completed EIN application form to 855-641-6935. It’s free, no matter how you apply.

You’ll also need to register with the Ohio Department of Taxation for state tax purposes. Registration is done online through the Ohio Business Gateway. This is also where you can file your taxes and other transactions with the state. 

In addition to federal corporate income tax, your corporation would ordinarily owe state income tax, but Ohio is one of a few states that has no state corporate income tax. However, Ohio charges a gross receipts tax called the commercial activity tax (CAT). The CAT applies to both C and S corporations.

You won’t need to pay this tax if your business has taxable gross receipts of less than $150,000, but those with taxable gross receipts between $150,000 and $1 million annually pay a minimum of $150. If you’re above this range, the Ohio Department of Taxation has more info for computing what you owe here.

Ohio levies a variety of other business taxes, including:

• Alcoholic beverages
• Employer withholding
• Financial institutions tax (FIT)
• Gross casino revenue tax
• Horse racing
• Municipal income tax for electric light companies and local exchange telephone companies
• Kilowatt-hour tax
• Motor fuel tax
• Municipal net profit tax
• Natural gas distribution tax (MCF)
• Pass-through entities
• Petroleum activity tax (PAT)
• Public utility excise
• Public utility property
• Replacement tire fee
• Resort tax
• Sales and use tax
• Severance tax
• Tobacco tax (including vapor products)

Step 10: Submit Your Corporation’s First Report

In most states, a corporation’s first report is the first annual report they file with the Secretary of State. The report updates the state with essential details about the business for its records. It includes any important business changes.

In Ohio, businesses aren’t required to file an annual report. However, nonprofit corporations must file a Statement of Continued Existence online with a $25 fee every five years.

How much does it cost to start a corporation in Ohio?

The initial cost to start a corporation in Ohio is $99 to file the Articles of Incorporation. It’s the same cost, whether you’re a nonprofit or for-profit corporation. Regular filing takes anywhere from three to seven days. Expedited services add extra fees to your startup costs. The fee schedule is as follows:

• Two-day processing: $100
• One-day processing: $200 (hand deliveries only)
• Four-hour processing: $300 (hand deliveries only)

Hand deliveries can be made at:

Walk-In Client Service Center
22 North Fourth Street
Columbus, OH 43215

In addition to filing the articles, you may have the following filing costs:

• Name reservation ($39)
• Trade name or fictitious name registration ($39)
• Statutory agent services ($49+)
• State trademark registration ($125)
  Business permits and licenses

Starting at $49 per year plus state fees, ZenBusiness can help you start, run, and grow your Ohio corporation.

What are the benefits of a corporation in Ohio?

There are many advantages to forming a corporation in Ohio. The Ohio Development Services Agency offers a variety of bonds, grants, loans, and tax credits to encourage business startups and economic growth. 

Ohio is also home to JobsOhio, a private nonprofit corporation that works with the government to drive job creation and new capital investment. By offering business incentives, they can help fulfill your specific business needs. JobsOhio helps companies starting, relocating, or expanding in the state. 

Forming a corporation in Ohio also:

• Protects your personal assets
• Establishes an official business
• Enables recognition outside of the U.S.
• Allows stock to be issued privately or publicly

A disadvantage of choosing a corporate business structure is that there can be a lot of red tape, as corporations are subject to many rules and regulations. Profits can also be taxed twice by the federal government. This double taxation occurs when corporate profits and income that shareholders receive from the corporation are both subject to income tax.

How is an Ohio corporation taxed?

A corporation can choose to be taxed by the IRS as a C corporation or an S corporation. Nonprofit corporations can apply to achieve tax-exempt status.

If you’re a C corporation, your company is taxed as a separate entity. This means that your corporation pays taxes on its profits, and its shareholders also pay taxes on their share of profits received from the business.

For pass-through taxation, some corporations choose to be classified as an S corporation. In this situation, corporate income is passed through to the shareholders who then pay personal income tax; the corporation itself doesn’t pay income tax. 

Ohio has a state tax that applies to most business entities with gross receipts over $150,000. It’s called the commercial activity tax. The state also levies a sales and use tax that applies to the retail sale, lease, and rental of tangible personal property. It also includes the sale of selected services in Ohio.

All business taxpayers must register with the Ohio Department of Taxation. You can register online or over the phone by calling (888) 405-4089. You can also file and pay the following taxes through the Ohio Business Gateway:

• Sales and use tax
• Employer withholding
• Commercial activity tax
• Unemployment compensation tax

Consult with a tax professional to determine which local, state, and federal taxes your corporation will be required to file and pay.

We can help

Have you decided to start your corporation in Ohio? We can help you make it happen! With our many services that can help during the formation process as well as help you run and grow your business, we want to see you succeed. Find out more about what we can do for you or get the process started!