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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
With its resilient economy and an affordable cost of living, Ohio is an excellent place for small business owners. To help you become your own boss, we created a step-by-step guide on how to start a business in Ohio. From choosing the right business idea to incorporation, here’s everything you need to know to form an Ohio business successfully.
Start Operating in Ohio: Key Points
Ohio has a business-friendly climate, with small businesses making up 99.6% of all companies in the state.[1]
To register your business, you must file business formation paperwork with the Ohio Secretary of State.
Ohio doesn’t require a general business license. Still, you may need an industry-specific or a local license to operate your business.
Easily start your business and remain compliant with our all-in-one tools, guiding you well past the initial setup with the right support and documents.
Ready to Start an Ohio Business?
Even if you’re a completely new entrepreneur, the incorporation process in Ohio doesn’t have to be complicated. However, it’s important to do ample research instead of jumping in blindly. Having a clear understanding of what you need to start operating in Ohio will help you avoid costly mistakes down the road.
We’re here to help. Follow the eight steps below to start a business in Ohio and become a successful small business owner in no time.
1. Choose a Business Idea
Every new business starts with an exciting business idea. You may already have a solid understanding of what you’d like to do so that you can move on to the next step. However, for many entrepreneurs, choosing the right business idea takes time.
If you’re short on inspiration, here are a few tips to help you get started.
Identify in-demand industries. Ohio boasts a diverse economy, with manufacturing, transportation, and real estate as the leading industries.[2] Try to figure out how your interests intersect with the economic opportunities in the state to develop a successful business idea.
Solve a problem. Your small business can have a significant impact. Think about an issue that you’d like to solve and start a mission-oriented business that’ll make a real difference. For example, you can create a green business to help the environment.
Turn your passion into business. Any interest can be turned into a company with a little bit of creativity. Maybe you’re a good artist and want to explore animation or graphic design. Or perhaps you love crafting things out of wood and want to start your own woodworking business. The possibilities are endless.
Whether quitting your 9-5 or starting a business in Ohio as a recent college graduate, don’t be afraid to dream big. Choose a business idea that you’re genuinely excited about and go after it with determination. Running your own business can be incredibly rewarding when you love what you do.
2. Draft an Ohio Business Plan
Every business needs a business plan. It’s how you turn your exciting idea into a successful business and start operating in Ohio. Your business plan is a documented strategy for your new business that explains your business goals and how you’ll achieve them.
Consider including the following sections in your business plan:
Executive summary: highlight the most important parts of your business plan in a short one-page section, including your mission statement
Market research: research your target market and leading competitors, explaining how your business stands out
Products and services: give an overview of the products and services that you’re going to be selling, going over their main benefits and features
Financial overview: provide projections for your revenue and expenses as well as go over other financial considerations, such as business funding
Marketing & sales strategy: explain how you’re going to market your business and give an overview of your sales funnel
Operations plan: go over how your business operations are going to function and whether you’re going to hire employees
Don’t start operating in Ohio without a business plan. Skipping this critical business formation step means that you’ll be exposing yourself to costly mistakes. For example, you may have difficulty marketing your startup without a cohesive strategy or get sidetracked with unexpected expenses.
→ If you’re looking for an example of a business plan, the U.S. Small Business Administration (SBA) has downloadable templates and business plan examples that you can use.
3. Select a Business Name
Your business name should speak to your target market and be unique and memorable. Deciding on the name of your business is a crucial step, so it’s normal for it to take some time. Here are a few tips to help you get creative and choose the best name for your business.
Combine two words. Facebook and YouTube are just two examples of business names that combine two different words to make up a unique name.
Make up a word. Many memorable business names are made up words— for example, Reddit, Kodak, and Google.
Keep it simple. It should be easy for your target audience to pronounce and remember your business name. When in doubt, don’t overcomplicate it.
You have almost complete freedom when it comes to naming your business. However, Ohio law requires your business name to be “distinguishable upon the records in the office of the Secretary of State.”[3] This means that you can’t name your business the same name that’s already being used by another organization in the state.
To check if the business name you want is available, you can do an Ohio business search or use our Free Business Name Search tool.
Once you find an available business name, you can reserve it with the Ohio Secretary of State for a small fee. Name reservation can be a good option for entrepreneurs who are not ready to start a business in Ohio officially but have a business idea they’d like to pursue. Consider also buying your domain name.
4. Choose a Business Structure
Deciding on the business structure for your startup is vital because it determines your tax obligations and whether you’ll have personal liability protection.
You can register your Ohio business as a limited liability company, a corporation, or a nonprofit. You can also do business as a sole proprietor and file for a DBA. In the sections below, we’ll explain the pros and cons of each of these business structures.
Sole Proprietorship
If you do business in Ohio without a registered business, you’re automatically considered a sole proprietor. You don’t have to complete the incorporation process to become a sole proprietor. Still, you may be required to get an appropriate business license, depending on the nature of your activities.
Since you don’t need to file any business formation paperwork to form a sole proprietorship, it’s a relatively easy and inexpensive way to start a business in Ohio. However, as a sole proprietor, your business finances are not separate from your personal finances. If your company has debts or faces litigation, your personal property, such as your house or car, can be at risk.
If you want to operate your business under a name other than your legal name, you’ll need to file for a DBA (doing business as). Most banks also require sole proprietors to have a DBA to open a business bank account.
Corporation
A corporation is a robust type of business structure that protects your personal assets and provides you with ample growth opportunities. If you want to sell your business one day, forming a corporation may be a good choice. You’ll also be able to issue stock to shareholders.
A downside of forming a corporation is that it’s subject to “double taxation.” You’ll need to file a separate tax return for your business and then report your business earnings on your personal income tax. However, in some cases, you can qualify for an S corporation tax status to avoid being taxed twice.
Limited Liability Company
A limited liability company (LLC) is a hybrid business entity that combines the liability protections of a corporation with the flexibility of a sole proprietorship for tax purposes. Many entrepreneurs decide to register their small business as an LLC because it protects their personal assets but still allows them to report business earnings on individual tax returns.
We can help you form your Ohio LLC in just a few minutes.
Nonprofit Organization
A nonprofit is a distinct type of business structure for organizations that are advancing a social cause without an expectation of financial gain. Public schools, charitable organizations, and churches are examples of nonprofit organizations. In some cases, a nonprofit can qualify for tax exemptions.
5. File Business Formation Documents
You must file business formation documents with the Ohio Secretary of State and pay a filing fee to register your new business. What kind of paperwork you need to file depends on your chosen business structure. Forming an Ohio corporation requires different documents than filing for an LLC.
Ohio LLC Formation Documents
To form your LLC, you must file an articles of organization document with the Ohio Secretary of State. This document is also known as the certificate of formation. It will ask you for foundational information about your Ohio small business, such as its name and address.
You’ll also need to provide the name and address of your Ohio registered agent (otherwise known as a statutory agent). Your statutory agent is responsible for receiving critical “processes, notices, and demands” on behalf of your business.[4]
It would be best if you also considered drafting an LLC Operating Agreement. It’s an internal document that outlines rules and regulations that govern your limited liability company. You don’t have to file it with the Secretary of State, but it’s highly recommended to create one.
Ohio Corporation Formation Documents
You’ll need to fill out an articles of incorporation document – also known as a certificate of incorporation – with the Secretary of State to form an Ohio corporation. You must provide foundational information about your business and appoint a statutory agent. It would be best if you also considered drafting corporate bylaws, or, as they’re called in Ohio, regulations.
How to File Your Business Formation Documents
You can file your business formation documents online on the Secretary of State’s website. Make sure to file your documents correctly. Even the most minor mistakes can result in the loss of liability protection or cause legal problems later on.
We’re here to help you incorporate your Ohio small business on the first try. Whether you’re forming an LLC, a corporation, or a nonprofit, we’ll carefully complete all the necessary paperwork and file it with the Ohio Secretary of State.
6. Apply for Ohio Business Licenses and Permits
Ohio doesn’t require all businesses to obtain a general business license. However, many companies will still need to get a license or a permit to start operating in Ohio in compliance with the law. Licensing obligations exist at the federal, state, and local levels. It’s essential to carefully research what kind of business licenses your small business needs.
Federal Business Licenses
The federal government regulates specific business industries, such as alcoholic beverages, wildlife, and transportation. Suppose your business activities fall within one of the regulated industries. In that case, you’ll need to obtain a federal business license for your startup. You can find the list of regulated industries on SBA’s website.
State Business Licenses
Depending on your industry or profession, you may be required to apply for a state business license or certificate. Dieticians, electricians, and hotels are just some examples of businesses that need state licensing.[5]
Local Business Licenses
Your local government may require your small business to obtain additional Ohio business licenses or pass inspections. For example, Columbus requires all mobile food vendors to do a Propane Pressure Leak Test and a Health and Fire inspection with the License Officer.[6]
Our team is here to help you easily comply with licensing requirements. We’ll research what licenses you need at the federal, state, and local levels and file your applications with appropriate government agencies for a stress-free experience.
7. File and Report Business Taxes
It’s crucial to stay up-to-date with tax deadlines and file your tax returns on time. You should research what kind of tax requirements you face at the federal, state, and local levels. Failing to file and report business taxes on time can result in fines and penalties.
You’ll typically need to pay a federal tax to the IRS (Internal Revenue Service) and a state tax to the Ohio Department of Taxation. You’ll also need to pay an income tax and collect a sales tax if you sell physical products or specific services. Ohio no longer has a franchise tax.
8. Open a Business Bank Account
After incorporation, it’s essential to open a dedicated business bank account to protect your personal assets and streamline your accounting.
Most business owners need an employer identification number (EIN) to open a business bank account. It’s a tax identification number issued by the IRS, also known as the federal employer identification number. You can think of it as a social security number for your business. You’ll also need an EIN to hire employees.
You can apply for an EIN on the IRS’s website, or, for a more streamlined experience, we can do it for you.
Take Your First Steps Toward Small Business Ownership
Ohio is a great place to bring your business idea to life. To start operating in Ohio, you have to go through a business formation process that involves multiple steps, such as choosing a unique name for your startup and applying for licenses and permits that your business needs.
We’re here to help you start a business in Ohio on the right foot. Answer a few questions about your business, and we’ll file your formation documents with the Secretary of State to form your LLC, corporation, or nonprofit in just a few minutes.
Your Perfect Fit: Whether you're looking at a simple LLC or a dedicated nonprofit, we'll help you identify the best structure for your dream business.
Continued Support: Your entrepreneurial journey doesn’t stop at formation. Our key management services help ensure your business thrives.
Tailored Affordability: Get value-packed options suited to your business needs, starting at just $0 + state fees.
Frequently Asked Questions
Is Ohio a good place to start a business?
Ohio offers a low cost of living, a driven workforce, and a business-friendly climate to entrepreneurs. It’s a great place to start and grow a small business.
How much does it cost to start operating in Ohio?
Startup costs vary from business to business. At the very least, you can expect to pay a filing fee when you file your business formation documents and apply for business licenses.
Can I start a business in Ohio without a business plan?
It’s highly recommended to have a detailed business plan in place before you start operating your business. Regardless of your business type, it’ll help you make strategic decisions and grow your business faster.
What does Ohio require to start a business?
At the very least, you must file business formation paperwork with the Ohio Secretary of State. Depending on your industry or profession, you may also need to apply for business licenses or permits.
What is the process for starting a business in Ohio?
To start a business in Ohio, you must file business formation paperwork with the Secretary of State. Once your business is registered, you must apply for any necessary business licenses, open a business bank account, and research tax deadlines.
Why are most LLCs in Delaware?
Delaware is one of the most business-friendly states in the nation that offers unique opportunities to entrepreneurs. Learn more about opening a business in Delaware.
Bibliography
U.S. Small Business Administration. “2022 Small Business Profile, Ohio.” Accessed August 14, 2023.
Ohio Department of Development. “Economic Overview.” Accessed August 14, 2023.
Frank LaRose Ohio Secretary of State. “Guide to Name Availability.” Accessed August 14, 2023.
Frank LaRose Ohio Secretary of State. “Articles of Organization.” Accessed August 14, 2023.
An Official State of Ohio Site. “Licenses & Permits.” Accessed August 14, 2023.
The City of Columbus. “Business Licenses & Resources.” Accessed August 14, 2023.
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