Ohio corporate law sets forth the process of establishing a limited liability corporation, an S-corporation, a C-corporation and a partnership. You can structure the business yourself, hire an attorney or use a company that specializes in Ohio corporation and partnership law.
There are advantages and disadvantages with each type of business structure.
1. Limited Liability Company--Easy to establish, requires less administrative paperwork than a corporation and is not required to have a board of directors or officers, an Ohio LLC is best suited for small companies or sole proprietors.
2. S-Corporation--Ohio corporations protect the owners, or shareholders, from personal liability. An Ohio S-Corporation does not pay tax, but shareholders individually declare profits from the corporation on their personal income taxes.
3. C-Corporation--Any company that follows Ohio corporation law and pays a fee is considered a corporation. Ohio C-corporations are taxed, and shareholders are taxed on income from the corporation.
4. Partnership--Owners share the profits and losses. They claim profits on their personal income taxes, but the Ohio partnership itself pays no tax.
Action Steps
The best contacts and resources to help you get it done
Should you do it yourself or hire help for incorporation in Ohio?
Once you decide how you would like to structure your business, you need to make things legal. The business owner, through a professional service that specializes in this type of work or through an attorney, can complete incorporation in Ohio.
I recommend: If you plan to complete the paperwork on your own, the Ohio Secretary of State's office has the
paperwork available online, as well as a listing of all required fees. If you want to hire someone else to do the paperwork,
The Company Corporation offers an online tool to help determine the best structure, all of their prices are online, and they have a toll free number for customer support.
Understand the paperwork for Ohio corporation and partnership law
Ohio corporations and partnerships require a great deal of paperwork. While Ohio corporate law seems complicated, establishing a corporation or LLC safeguards your personal assets.
I recommend: Break down the process of incorporation into manageable tasks. Incorporation in Ohio takes time, but the process is straightforward. Keep up to date on the law with
Anderson's Ohio Corporate Law Handbook, updated each year.
Know the annual responsibilities of Ohio corporations
The Secretary of State's office provides Ohio corporation information, but you need to research further to learn your annual responsibilities. Publicly owned corporations provide their shareholders with an annual report that includes financial information. They also provide the Securities and Exchange Commission with a completed form 10-K. Ohio partnership law and LLC law requires that the entities involved in the partnership or LLC claim income on their personal income tax; there is no additional financial reporting required.
I recommend: Good record keeping simplifies the job of writing an annual report. Many smaller companies distribute copies of their
10-K form, available through the SEC, to their shareholders in lieu of a formal annual report.
Tips & Tactics
Helpful advice for making the most of this Guide
- Consider hiring a corporate attorney to establish your corporation, partnership or limited liability company, and a CPA to handle annual financial reports.
- When setting up a corporation, carefully consider who you bring in as members of the board of directors.
- If your main concern is liability, Ohio LLC laws allow you to stay in control of your business while protecting your personal assets.
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