If you’re thinking of starting your own business, you might be at the stage of forming your business structure and wondering how to start an Indiana LLC. While forming your first LLC can be a little intimidating, this guide will walk you through the process step by step.
Related: Starting A Business In Indiana Checklist
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Steps To Form An Indiana LLC
Step 1: Choose an LLC Name
The first step in forming an Indiana Limited Liability Company is to make sure the name you want is available. In Indiana, LLC names have to be different from those of other entities registered in the state. The Indiana Secretary of State has a handy online name database, so you can do an Indiana LLC name search to make sure your name is available.
The name of the LLC must include one of the following designators (words or abbreviations) at the end of the business name:
- Limited Liability Company
- L.L.C.
- LLC
A comma may be used after the business name and before the designator. “Hoosier Hair Cuts LLC” and “Hoosier Hair Cuts, LLC” are acceptable.
If you want to use a name but are not ready to form the LLC, a Name Reservation application can be filed with the Secretary of State. The application will hold the name for up to 120 days.
Step 2: Appoint an Indiana Registered Agent
In Indiana, every LLC must designate a registered agent. A registered agent is an individual or company with an Indiana street address responsible for any legal correspondence. This commonly includes receiving legal documents, such as lawsuit notifications, on behalf of the business.
While many LLC owners opt to fulfill this role, some hire a registered agent service. Utilizing a registered agent service ensures that your LLC adheres to state requirements while offering an extra layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.
Related: How To Appoint An Indiana Registered Agent?
Step 3: File the Indiana LLC Articles of Organization
The paperwork to officially create an LLC in Indiana is called the Articles of Organization. To file, either file online with Indiana INBiz. Alternatively, you can download the Articles of Organization (Form 49459).
Related: How To Fill Out The Indiana Articles Of Organization
If you have questions, contact the Indiana Secretary of State, Business Services Division.
302 West Washington Street
Room E-018
Indianapolis, IN 46204
phone at 317-234-9768
email at https://faqs.in.gov/hc/en-us/requests/new
The Articles of Organization contain a few sections that can be confusing, and below is an overview the most common ones.
Period of duration: This question on the LLC’s duration is to choose a date in the future when the LLC will close. Most businesses don’t have a set date when they expect to shut down and would choose “Perpetual.” If you have a specific end date (typically used for investment-related businesses), choose the date the business will close.
Effective date: The next area asks about the effective date of the LLC. By default, the LLC is effective on the date submitted. If you prefer to have the LLC officially start at a later date (up to 90 days), enter that date and time in these fields.
Principal office address: In this section, enter the street address, city, state, and zip code of the initial principal office. This address can be the LLC’s physical address or the address where the business records are stored. The Principal Office Address does not have to be in Indiana.
Manager or Member information: This section asks if the LLC is Member-Managed or Manager-Managed.
- Member-Managed LLCs have members (owners) who are active in the day-to-day operations of the business.
- Manager-Managed LLCs have managers hired by the members to run the LLC, similar to a CEO of a corporation.
Most LLCs are not managed by managers.
Principal information: Enter the title, name, and address of the principals of the LLC. A principal is an officer, director, board member, partner, etc., in the business. This is an optional section.
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What To Do After Starting An Indiana LLC
Once the LLC has been formed, there are a few additional steps to take. Below is a list of the most common tasks.
Prepare an Indiana LLC Operating Agreement
The LLC operating agreement is a document that governs the LLC’s framework and covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.
The state of Indiana does not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
- LLC Member’s personal liability protection may be diminished.
- Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.
Obtain an EIN
If the LLC will hire employees or is owned by more than one member, an EIN is required.
The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Like an individual’s social security number, the EIN identifies business entities for tax purposes.
Related: How To Register For An EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account, such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original LLC formation paperwork from the state showing the creation of the LLC.
- Government ID of the members.
- In some circumstances, an Indiana Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be various business licenses and permits needed before starting your business. Some common registrations include:
- Business licenses: The state of Indiana doesn’t have a general business license; however, many cities require one to operate.
- Registered Retail Merchant Certificate: Businesses selling products and certain services will register for an Indiana Registered Retail Merchant Certificate with the Indiana Department of Revenue, which allows the business to collect sales tax.
- Professional licensing: Some occupations and professions, such as home inspectors, interior designers, manicurists, and plumbers, in Indiana.
- Unemployment insurance registration: If you hire employees in Indiana, you must register through the Department of Workforce Development.
Related: How To Register A Business In Indiana
File the Indiana Biennial Business Entity Report
LLCs file a biennial report called the Business Entity Report with the Indiana Secretary of State every other year. This report is due every other year on the anniversary month when the LLC was formed. For example, if the LLC were formed on November 15th, 2024, the next report would be due November 1st, 2026. The filing fee is $31 for online filing
Related: How To File An Indiana Business Entity Report
File the Beneficial Owner Information Report
Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Indiana or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.
Indiana LLC FAQs
How much does an Indiana LLC cost?
The cost to form an LLC in Indiana is $95, payable to the Indiana Secretary of State.
Is there a yearly fee for an LLC in Indiana?
No, but a Business Entity Report will need to be filed, and the state filing fee of $31 will be paid every other year.
How long does it take for an LLC to be approved in Indiana?
It normally takes 1 day for the state to approve the LLC paperwork for online filings and 5-7 business days for mailed-in forms.
Is an LLC the best choice?
Choosing the right structure for your new small business is a significant decision that can affect your taxes, personal liability, and even your daily operations. Let’s break down the main differences between an LLC (Limited Liability Company), a sole proprietorship, general partnership, and corporation, to help you decide which might be the best fit for you.
An LLC blends the simplicity of a sole proprietorship or partnership with the liability protection of a corporation. If you’re looking for a way to shield your assets from business debts or lawsuits, an LLC could be a smart choice. If your business runs into trouble, your personal savings, house, and car are usually safer than in a sole proprietorship or general partnership. Plus, LLCs have greater tax flexibility, allowing you to choose whether you’d like to be taxed as a sole proprietorship, partnership, or corporation.
The downside of the LLC is that it has ongoing reporting requirements (once every other year) and a fee paid to the state.
What is a Foreign Limited Liability Company?
An Indiana foreign LLC is an LLC that was formed in another state but wants to operate in the state of Indiana. Physically operating means having a presence, such as having an office or hiring an employee.
What is a Professional Limited Liability Company?
Businesses that require state licensing, such as accountants, attorneys, podiatrists, physical therapists, acupuncturists, etc., often must file as a Professional Limited Liability Company (sometimes referred to as a Professional LLC or PLLC) instead of an LLC. Filing for a PLLC is very similar to filing for an LLC.
