Guide to Forming an LLC in Oklahoma
Follow our free guide to form an LLC in Oklahoma
- Pros and Cons of Forming an LLC in Oklahoma
- Starting Your Oklahoma LLC
- Maintaining Your Oklahoma LLC
- Additional Oklahoma Resources
The LLC formation process in Oklahoma has multiple steps that may seem quite daunting. Our comprehensive guide, which is divided into two main phases, includes all the necessary details for starting an Oklahoma LLC.
Pros and Cons of Forming an LLC in Oklahoma
Privacy for Owners
Oklahoma does not require the names of members/manager of an LLC to be included in the Articles of Organization. An organizer (the party who prepares and files the paperwork) is able to submit the formation paperwork in place of the members.
No Corporate/Franchise Taxes
Oklahoma does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.
Great Place to Start a Business
In 2017, CNBC named Oklahoma City and Tulsa as two of thebest cities in the US for starting a new business, ranking at #1 and #4 respectively. Among the reasons are the low cost of doing business and a very affordable housing market; The median home price in both Tulsa and Oklahoma City is $180,000.
Low State Wages
Recent reports show that the number oflow wage jobs in Oklahoma increased over the past year; The state percentage is higher than the national average — over 28% versus 23%.
High Poverty and Debt Rate
Reports from 2018 show Oklahoma’s 15% income poverty level still higher than the national average (13%). Additionally, more 30% of Oklahoma residents are using over 75% of their credit card limits.
Cost of Doing Business
- $100 filing fee
- $25 annual certificate
- No corporate or franchise tax
Phase One: Starting Your Oklahoma LLC
Forming an LLC in Oklahoma can be done without a lot of stress when you have the right kind of help. The first set of steps for starting your LLC are below:
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Register for an EIN
Step 1: Name Your Oklahoma LLC
The first step in forming your Oklahoma LLC is to name your business. There are some state and federal guidelines concerning what words can or cannot be used in business names.
Tip: Use a free business name search tool to ensure your company’s desired name is available.
Business Name Guidelines
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educational or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.
You should also set up a website for your new LLC — check domain name availability at a number of online web services sites.
Step 2: Establish Ownership
The owners of an LLC are actually referred to as members and managers. All LLCs will have members, but only some LLCs will have managers — it depends on the management structure of the business.
LLC Management Structures:
- Member-managed: All members participate in operating and making decisions for the LLC
- Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved.
Oklahoma LLC Member Guidelines
Required Number of Members
There must be at least one member or manager to form an LLC in Oklahoma.
Member Disclosure Requirements
An organizer/authorized representative may sign and file the Articles of Organization in place of the LLC members.
LLC members in Oklahoma may be of any age.
There are no residency restrictions imposed on LLC members in Oklahoma.
Step 3: Find a Registered Agent in Oklahoma
All Oklahoma LLCs must appoint a registered agent in order for your business to be official and compliant with the state.
What is a registered agent?
A registered agent can be either a person or business who receives all official government mail and service of process notices on behalf of the LLC.
Why do you need a registered agent?
Oklahoma law requires you to appoint a registered agent so that there is a consistent contact person for your LLC.
What are the main requirements for a registered agent?
- The registered agent must have a physical address — not a P.O. Box
- The registered agent must be available during business hours
Who can be a registered agent in Oklahoma?
- A state resident with a physical address in Oklahoma
- An LLC or corporation that is licensed to conduct business in Oklahoma
Is the registered agent’s contact information publicly accessible?
The name and contact information of the LLC’s registered agent is a matter of public record.
Can I be my own registered agent for my business?
You are legally allowed to be your own registered agent as long as you have a physical address in Oklahoma.
Is being my own registered agent discouraged?
Business owners who choose to be their own registered agent risk compromising personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Oklahoma. Find more information here.
Step 4: File the Certificate of Formation/Articles of Organization
Setting up your Oklahoma LLC officially happens when you file the Articles of Operation with the Secretary of State.
What is the Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to legally form your LLC.
Why do I need the Articles of Organization?
Your LLC business in Oklahoma will not be legally recognized by the Secretary of State without filing this document. Consider the Articles of Organization as part of your LLC’s foundation.
What information is included in the Articles of Organization?
- The name and address of the LLC
- The name of the organizer filing the paperwork
- The name and location of the registered agent
- The duration of the LLC (perpetual or not)
Additional Oklahoma Filing Information— Professional LLC
Oklahoma also allows professional service businesses to form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
Example professions that may form PLLCs:
- Physicians/Medical Professionals
- Professional Counselors and Psychologists
- Architects and Engineers
- Social Workers
A few points to consider:
- All members of the PLLC must be licensed in the profession of the business.
- The PLLC is only allowed to provide services for which the business was formed.
- The members are still subject to whichever licensing boards govern the PLLC’s profession.
Step 5: Create an LLC Operating Agreement
Having an LLC Operating Agreement in place is necessary for the successful function of your Oklahoma LLC.
What is an LLC Operating Agreement?
The LLC Operating Agreement is a legally binding document that defines the rights and responsibilities of each member and lays out the details of the business’s operating procedures.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement is necessary because it protects business assets from creditors, provides a measure of structure for the business, and reduces disputes among members.
Do I need to file the LLC Operating Agreement?
Your LLC’s Operating Agreement remains in-house and does not need to be filed with the state
What goes into an LLC Operating Agreement?
There is no set rule of how to create your LLC Operating Agreement; however, most documents include the following information:
- List of the members/managers and their roles
- Designation of authority in the LLC
- Initial capital contributions of the members
- Voting designations and percentages of the members
- Member transfer/addition rules and restrictions
- Distribution of profits
- Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Register for an EIN
The majority of Oklahoma businesses must register for an EIN. Your LLC will not be able to conduct business without this ID.
What is an EIN?
The EIN is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS). It identifies your business much like a personal Social Security number.
What does EIN stand for?
EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
- Any business with employees (even if owned by one person)
- Any business with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
- To hire employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
In short, if you make money through your business and it has employees, you must have an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN services for small businesses in Oklahoma. Find more information here.
Phase Two: Maintaining Your Oklahoma LLC
Now that you have finished the initial phase of setting up your Oklahoma LLC, the following steps will ready your business for daily operations. The next few steps are:
- Step 1: Register for Taxes in Oklahoma
- Step 2: Apply for Permits and Licenses
- Step 3: File the Annual Certificate
- Step 4: Request a Certificate of Good Standing
Step 1: Register for Oklahoma State Taxes
Oklahoma LLCs do not have to pay either a corporate or franchise tax. LLC members are still required to pay state and federal income taxes on their earnings.
State Income Taxes
Oklahoma’s state income tax rates are listed in the table below:
Corporate Tax Information
You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying corporate taxes on your business’s earnings
Corporations in Oklahoma are required to pay two types of taxes:
- Corporation Income Tax = 6% on all taxable income.
- Franchise Tax = $1.25 per $1,000 of all capital earned in OK
Please Note: There is a minimum franchise tax fee of $250; the maximum fee is $20,000.
Additional Tax Information
Other taxes your LLC may need to pay:
- Sales and Use Tax at 4.5%
- Employee Withholding Tax
- Unemployment Tax
Step 2: Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Oklahoma can vary, depending on a number of variables:
- Location (city and county)
- Type of Business
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: File an Annual Certificate
All businesses formed in Oklahoma are required to file an annual certificate with the Secretary of State.
What is an annual certificate?
An annual certificate, also called an annual report, is designed to keep your business’s information current with the state; this form is filed with the Secretary of State.
What kind of information is in the annual certificate?
The information requested in the annual certificate is similar to what is in the Articles of Operation:
- The name and address of the business
- The name and address of the registered agent
- The business’s EIN
- The name/signature of the manager or managing member
Is the annual certificate part of public record?
The annual certificate filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Due Date: Anniversary date of LLC formation
Frequency: Every year
Implications of Late Filings: LLC marked “not in good standing” after 60 days
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual certificate with us today.
Step 4: Request a Certificate of Good Standing
The last step in forming your Oklahoma LLC requires that you request a Certificate of Good Standing for your business.
What is a Certificate of Good Standing?
The Certificate of Good Standing is an official notification that confirms your business is properly formed and is in compliance with all state regulations.
Who issues the Certificate of Good Standing?
The Certificate of Good Standing is generally issued by the Secretary of State.
When can I request a Certificate of Good Standing for my business?
You will be able to request a Certificate of Good Standing after your LLC is officially formed through the Secretary of State.
Why do I need a Certificate of Good Standing?
The Certificate of Good Standing adds credibility to your new LLC for banks, financial institutions, and other businesses.
Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Oklahoma LLC. Click here for more information.