A corporation is a complex business model that you should fully understand before deciding to form one. If you need help dealing with all of the paperwork and red tape, consider partnering with a business formation service to move things along more easily.
To form a corporation in Ohio, you’ll need to work closely with the Ohio Secretary of State. Their Business Services Division handles all filings through an online portal, Ohio Business Central. You must sign up for an account to login and submit paperwork.
Are you ready to learn more and start your business? Check out our helpful guide below about forming your Ohio corporation online today.
How do I form a Corporation in Ohio?
Steps to form your Ohio Corporation
- Name Your Corporation
- Appoint Directors
- Choose an Ohio Registered Agent
- File the Ohio Articles of Incorporation
- Create Corporate Bylaws
- Draft a Shareholder Agreement
- Issue Shares of Stock
- Apply for Necessary Business Permits or Licenses
- File for an EIN and Review Tax Requirements
- Submit your Corporation’s first report
To start an Ohio corporation, you must file the Articles of Incorporation with the Ohio Secretary of State. This document registers your corporation with the state; however, there are other steps you’ll need to take before and after you begin business operations. Starting a new business can feel like an overwhelming task. To simplify the process of forming an Ohio corporation, we’ve put together 10 easy steps:
Step 1: Name Your Ohio Corporation
Naming your corporation is an important first step toward forming your business. According to Ohio law, the name must be distinguishable from any other domestic or foreign:
- Nonprofit or for-profit corporation
- Limited liability company
- Limited liability partnership
- Limited partnership
- 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.”
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.
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.
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.
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.
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 form, 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 the Ohio Articles of Incorporation. Incorporators are responsible for appointing initial directors to form a board. 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.
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.
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 form your corporation officially, 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. 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 or not 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).
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.
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:
- Notary public
- Real estate
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.
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)
For more information about state taxes, contact the Department of Taxation at (888) 405-4039 or check out their resources for businesses.
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.
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.
Ohio Corporation FAQs
- Does running a corporation in Ohio involve more paperwork than running other types of businesses?
When compared to simpler business structures, it’s true that running a corporation involves a lot more paperwork. A corporation has shareholders, officers, and a board of directors who all have meetings in which they need to record the minutes. There’s also more filing of paperwork because of the issuing of shares of stock.
- What is the difference between an LLC and a corporation in Ohio?
An LLC is a limited liability company. It’s a simpler business structure that’s managed by members (owners) instead of a board of directors. An LLC is a good choice for small businesses, as its startup costs and amount of red tape to be in business are less than those of a corporation.
- How do I change my corporation’s name in Ohio?
You can change the name of your corporation in Ohio by filing a Certificate of Amendment with the Secretary of State and paying a $50 filing fee.
- How many people are needed to form a corporation in Ohio?
A single person can form a corporation in Ohio.
- Can I form my Ohio corporation online?
You can form your Ohio corporation online using the Secretary of State’s online filing system.
- How do I dissolve my Ohio corporation?
To dissolve your corporation, you will need to file a Certificate of Dissolution and pay a $50 filing fee.
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