How to Start an LLC in Indiana: Indiana LLC Ultimate Guide
How to Start an LLC in Indiana: Indiana LLC Ultimate Guide
Are you looking to understand how to start an LLC in Indiana but are afraid that it might be too difficult? Don't worry, our guide will help you understand the process much better.
With Swyft Filings' help, starting an LLC in Indiana is a snap!
Phase 1: How to Start an LLC in Indiana
Forming an LLC in Indiana is not as difficult as you might think — all you need is the right kind of help and a guide to show you the whole picture.
The first part of obtaining an LLC in Indiana begins with these steps:
1: Name Your Indiana LLC
The first step you need to take to prepare your Indiana LLC registration is to have a business name ready. As you are working up your list of business names, keep in mind that the state has its own rules concerning business names.
Tip: Use a free business name search tool to ensure your Indiana LLC'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.
Restrictions
Some state and federal laws place restrictions concerning certain words that you cannot use for a business name.
A few examples include:
“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.
URL Availability
After you have decided on a name for your business and form an Indiana LLC, you also need to choose a website address where customers can find you online. Check domain name availability through online web services sites.
2. Establish Ownership
Indiana LLC owners are actually called members and managers. All LLCs will have members, but not all will have managers. The title difference depends on the LLC’s management structure. As part of the process for applying for an LLC in Indiana, you should choose between the following management structures:
Member-managed: The members actively contribute to the operations and decisions of the LLC
Manager-managed: The manager handles running the LLC; the members are typically not involved.
There are certain guidelines that must be followed for membership when you create an LLC in Indiana.
Required Number of Members
There must be at least one member or managers to form an LLC in Indiana.
Member Disclosure Requirements
An organizer/authorized representative may sign and file the Articles of Organization in place of the LLC members.
Age Restrictions
LLC members in Indiana may be of any age.
Residence Restrictions
There are no residency restrictions imposed on LLC members in Indiana.
3. Find a Registered Agent in Indiana
The state requires Indiana LLCs to have a registered agent. Your LLC business cannot be officially formed without this party.
What is a registered agent?
When applying for an LLC in Indiana, a registered agent is a person or business who accepts official government notices (including from the Secretary of State) and service of process notices on behalf of the LLC.
What is a registered agent?
A registered agent is either a person or business who is authorized to accept official government notices (including the Secretary of State) and service of process notices on behalf of the LLC.
Why do you need a registered agent?
According to Indiana state laws, all businesses must have a registered agent on file as a consistent contact person for your LLC.
What are the main requirements for a registered agent?
Have a physical address (no P.O. Box)
Be available during business hours
Who can be a registered agent in Indiana?
An Indiana resident with a physical address
An LLC or corporation that is licensed to conduct business in Idaho
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 the registered agent for my business?
You are legally allowed to be your own registered agent as long as you are a state resident with a physical address.
Is being my own registered agent discouraged?
Being your own registered agent is discouraged because you risk compromising your personal information since the agent's name and contact information must be available to the public.
Tip: Avoid the hassles and choose Swyft Filings' registered agent services to fill the registered agent needs for LLCs in Indiana. FIND YOUR AGENT
4. File the Articles of Organization
The most important step in Indiana LLC formation is filing the Articles of Organization with the Secretary of State.
What are Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to officially and legally form an LLC in Indiana.
Why do I need the Articles of Organization?
Without filing this document, the Secretary of State will not legally recognize your LLC in Indiana. Consider the Articles of Organization as part of your LLC's foundation.
What is the cost of filing the Articles of Organization?
The filing fee for Indiana is $100.
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 chosen LLC management structure
The duration of the LLC (perpetual or not)
Additional Indiana Filing Requirements — Professional Service Businesses
Indiana does not have any rules against people in professional service business from forming an LLC. The business must follow the same regulations as any other LLC.
Professional Service Business Types:
Accountants
Attorney
Physicians
Professional Counselors and Psychologists
Architects and Engineers
Veterinarians
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.
5. Create an LLC Operating Agreement
Even though Indiana's state government does not require an LLC in Indiana to have an Operating Agreement, it is still necessary to successfully continue your business.
What is an LLC Operating Agreement?
The LLC Operating Agreement is an in-house legal document that defines the roles of members/managers and explains how the business will operate.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement is necessary because it provides structure for the business, protects business assets from creditors, and reduces disputes among members.
Do I need to file the LLC Operating Agreement?
The Operating Agreement does not need to be filed with the state — it remains in-house for the business.
What goes into an LLC Operating Agreement?
The LLC Operating Agreement should be unique to the business; however, most agreements include the following:
Designation of the members/managers
Initial capital contributions of the members
Voting designations and percentages
Member transfer/addition rules and restrictions
Distribution of profits
Tip: Get a customized LLC operating agreement for your Indiana LLC. Add structure to your LLC now. CREATE YOUR LLC OPERATING AGREEMENT
6. Obtain an EIN
Most businesses formed in the state of Indiana must register for an EIN. Your Indiana 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 with the government 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 after obtaining an LLC in Indiana 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/tax ID services for small businesses in Indiana. GET YOUR EIN
Phase 2: Maintaining Your Indiana LLC
The first phase of setting up an LLC in Indiana is complete and now you are ready for the next set of steps that will prepare your LLC to conduct business.
1. Register for Indiana State Taxes
LLCs in Indiana don't pay any corporate or franchise taxes. Members are still required to pay state and federal income taxes on their earnings.
State Income Taxes
The Indiana state income tax rate is 3.23% of the adjusted gross income (AGI).
Corporate Tax Information
If you form an Indiana LLC and choose to have it taxed as a corporation, your business is responsible for paying the state's corporate tax.
The current Indiana corporate AGI tax rate is 5.75%, but this rate is scheduled to decrease every year (effective every July 1st) until it reaches 4.9% in 2021.
Additional Tax Information
Other taxes your LLC may need to pay include:
Sales Tax at 7%
Employee Withholding Tax
Unemployment Tax
2. Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Indiana can vary, depending on a number of variables:
Location (city and county)
Type of Business
Industry
Tip: If you would like to see more in-depth information on licenses and permits, please free to visit our business license research package page. LEARN MORE
3. File a Business Entity Report
Indiana LLCs are required to file a business entity report with the Department of State.
What is a business entity report?
A business entity report, also known as a periodic or annual report, keeps your business's information current and is filed with the Secretary of State.
What kind of information is in the business entity report?
The information requested in the business entity report is similar to what is in the business entity report:
The name and address of the business
The name and address of the registered agent
The names of the members
The business’s EIN
Is the business entity report part of the public record?
The business entity report filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Fee: $50 Due Date: The anniversary month of LLC formation Frequency: Every two years Implications of Late Filings: No late fee; eventual LLC dissolution
Swyft FIlings helps you stay compliant by providing stress-free solutions. Use our business entity report today. GET YOUR REPORT
4. Obtain a Certificate of Good Standing
After creating an LLC in Indiana, there is still one last step — securing 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 Secretary of State generally issues the Certificate of Good Standing.
When can I request a Certificate of Good Standing for my business?
You can request a Certificate of Good Standing after registering an LLC in Indiana through the Secretary of State.
Why do I need a Certificate of Good Standing?
Having a Certificate of Good Standing adds a measure of credibility to your new LLC for banks, financial institutions, and other businesses.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire and does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Indiana LLC. GET YOUR CERTIFICATE
How to Get an LLC in Indiana: A Recap
When you need to know how to form an LLC in Indiana, looking at the process as one big project can make it seem rather daunting. Many LLC requirements can be obtuse or mystifying to someone who's not an expert. Luckily, Swyft Filings is here to help you through each of the steps:
Name Your Indiana LLC
Establish Ownership
Find a Registered Agent in Indiana
File the Articles of Organization
Create an LLC Operating Agreement
Obtain for an EIN
Register for Indiana State Taxes
Obtain Business Licenses and Permits
File a Business Entity Report
Obtain a Certificate of Good Standing
Starting an LLC in Indiana: Pros and Cons
Pros
No Corporate/Franchise Taxes
After registering an LLC in Indiana, you won't have to pay corporate or franchise taxes. Only state and federal income taxes are owed by LLC members.
Low State Income Tax Rate
Indiana's state income tax rate is among the lowest in the nation at only 3.23%. Unlike some states with a sliding scale based on income, Indiana has a flat tax rate for all income brackets.
Privacy for Owners
Indiana state law does not require the LLC members/manager to be listed in the Articles of Organization. An organizer (the party who prepares and files the paperwork) can be used to submit the official documents to the state in place of the actual owners.
Cons
Rising Unemployment Rate
Indiana’s unemployment rate rose again recently to 3.5%, which is the highest it has been since the 2008 recession. The state's unemployment rate is only slightly lower than the national average, which is currently 4%.
Lack of Qualified Workers
According to recent statements by the Governor of Indiana, Eric Holcomb, there are not enough qualified workers to fill the job vacancies in Indiana. The possibility for more than 80,000 jobs exist, but the right kind of employees needed for those jobs are not available.
Double Taxes on Indiana Properties
Property owners in Indiana must essentially pay taxes twice - state and county tax. The statewide property tax rate is among the lowest in the country at 0.87%; however, the county rates vary and can be as high as 1.18% (Lake County)
Cost of Doing Business
$100 filing fee / $50 Business Entity Report
No corporate/franchise tax
How Long Does it Take to Get an LLC in Indiana?
It doesn't take longer than a business day to get an LLC in Indiana. Timing will vary depending on the speed that the government moves in, but in general, once your paperwork is completed, you should get an LLC in Indiana that same business day.
Forming an LLC in Indiana: Final Points
Just because obtaining an LLC in Indiana feels like a great, work-heavy undertaking, it doesn’t mean that it has to be that way. Our Business Specialists know how to get your paperwork from point A to point B to create an LLC in Indiana. With their help, you can start enjoying the perks.
Setting Up an LLC in Indiana: Related Resources
Guides for Other States
Don’t Just Take Our Word for It
Every day, business owners from all over the nation rely on Swyft Filings to help them file an LLC online and maintain their company.
Frequently Asked Questions
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Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.
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