Are you thinking about starting your own small business? If so, you’ll need to decide what business structure to use. One popular option in Oklahoma is the Limited Liability Company (LLC). An Oklahoma LLC offers several benefits, including limited liability for its owners and flexibility in how it’s taxed. In this guide, I’ll provide an overview of the process of starting your LLC in Oklahoma and some of the key things you need to know.
Related: How to start a business in Oklahoma
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Steps To Form An Oklahoma LLC?
Step 1: Choose an LLC Name
The first step in forming an Oklahoma Limited Liability Company is to make sure the name you want is available. This needs to be done first because the state of Oklahoma requires that the name of each LLC must be distinguishable from other entity names registered in the state of Oklahoma. It only takes a few minutes to do an Oklahoma LLC name search on the Oklahoma Secretary of State’s website.
In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:
- Limited Liability Company
- Limited Company
- L.L.C.
- LLC
- L.C.
- LC
The word limited may be abbreviated as Ltd., and the word company may be abbreviated as Co.
A comma may be used after the business name and before the designator. “Sooner State Supplies LLC” and “Sooner State Supplies, LLC” are both acceptable.
If there is a name you want to use but are not ready to register the LLC, you can file the Name Reservation Application with the Oklahoma Secretary of State and hold a name for up to 60 days.
Before settling on a name, you may want to see if a domain name is also available to match your business name and website address.
Step 2: Appoint an Oklahoma Registered Agent
Every LLC in Oklahoma is required to have a registered agent, which is simply someone with an Oklahoma street address who will be responsible for any legal correspondence, for example, if the business is served papers in the event of a lawsuit.
Many LLC owners are their own registered agent, but it is possible to hire a registered agent service like Northwest Registered Agent. The reasons why someone would hire a registered agent service include when the owner lives in another state or if the owner prefers that their personal address not be on public record.
Related: What is an Oklahoma registered agent?
Step 3: File the Oklahoma LLC Articles of Organization
The paperwork to officially create an LLC in Oklahoma is called the Articles of Organization. To submit the paperwork, either file online through the Oklahoma Secretary of State’s website or download and mail the Oklahoma LLC Articles of Organization (SOS Form 0074).
Related: How to fill out the Oklahoma Articles of Organization
When filling out the Articles of Organization, a few sections and terms will likely be unfamiliar, and I’ll explain some of these below.
Effective date: If you want the LLC to start immediately, choose “Filing Date.” If you want the LLC to start later, enter a date less than 90 days in the future to start. The main reason for delaying the LLC start date is when the LLC filing is being made close to the end of a calendar year, and the business isn’t going to have any activity until the start of the following year. By delaying the start date, they eliminate the need to file a partial-year business tax return.
Most people choose “Filing Date.”
Principal office address: In this section, enter the street address, city, state, and zip code of the initial principal place of business. This address can be the LLC’s physical address, or it can be the address where the business records are stored. You may not use a PO Box for the designated office. This address is where the annual certificate reminder will be sent.
Duration: In this section, you can indicate how long the LLC intends to remain in existence. Most LLCs will choose a Perpetual duration; however, some businesses (usually investment-related) will have a specific closure date.
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What To Do After Forming An Oklahoma LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Oklahoma LLC Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like the share of membership interest, ownership rights, member responsibilities, how profits and losses are distributed, and more.
Most states (like Oklahoma) do 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.
- 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.
Related: Oklahoma operating agreement template
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). Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
Related: How to apply 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 formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Occasionally when registering a new LLC, the bank may require an Oklahoma Certificate of Good Standing to prove the LLC is active and in good standing with the state.
Related: How to open a business bank account for your LLC
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 license: There isn’t a general state of Oklahoma business license, though some cities require businesses to obtain licensing before they can start.
- Professional license: Certain services in Oklahoma, such as barbershops, accountants, salons, and others, must be licensed.
- Sales tax permit: In order to sell products and certain services in the state of Oklahoma, a sales tax permit will be needed from the Oklahoma Tax Commission.
Related: What business licenses are needed in Oklahoma?
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 Oklahoma 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.
File the Oklahoma LLC Annual Certificate
LLCs are required to file an annual certificate with the Oklahoma Secretary of State. The annual report updates ownership information and other details.
Related: How to File an Oklahoma LLC Annual Certificate
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Oklahoma LLC FAQs
How much does it cost to start an LLC in Oklahoma?
The Oklahoma Secretary of State filing fee to start an LLC in Oklahoma is $100.
How long does it take to start an LLC in Oklahoma?
Approval for an Oklahoma LLC is typically under two weeks when filing by mail or 1-2 business days when filing online. Walk-in expedited filing is available, and for an additional fee, the LLC is approved in about 1 hour.
How long is an LLC good for in Oklahoma?
Oklahoma LLCs will need to be renewed each year with the Oklahoma Secretary of State by filing an annual report and the $25 filing fee.
Why do people choose LLCs?
An LLC is a type of business structure (also called a business entity) that offers its owners personal liability protection. This means that if your LLC is sued, the owner’s personal assets are generally safe as the assets of the LLC are at risk. While LLCs are similar to corporations in this respect, they are much easier to set up and maintain. In addition, LLCs can be taxed as either sole proprietorships or corporations, depending on the circumstances.
Unlike a sole proprietorship or partnership, where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal entity that protects the business owner’s personal assets. So, if the LLC is sued, the owner’s personal assets are usually protected.
Besides liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration, and management flexibility.
What is a Foreign Limited Liability Company?
A foreign LLC isn’t a special type of LLC. Instead, it’s an LLC that was formed in another state (domestic LLC) but wants to operate physically in Oklahoma. Physically operating means having a presence, such as having an office or hiring an employee.
Related: What is the difference between a domestic Oklahoma LLC and a foreign LLC?
What is a Professional Limited Liability Company?
Businesses that require occupational licensing in Oklahoma, such as accountants, architects, veterinarians, etc., can form a Professional LLC (PLLC) instead of an LLC. Filing for a PLLC is very similar to that of an LLC.
What is a Series LLC?
An Oklahoma Series LLC is a special type of Limited Liability Company (LLC) not available in many states that allows for the creation of multiple “series” or “cells” under a single LLC umbrella. Each series can hold assets, have its own members (owners), and operate independently from the other series within the same LLC structure.
What makes a Series LLC unique is that each series can have its own liabilities and debts, and the assets of one series are protected from the liabilities of the others. This setup is particularly beneficial for businesses that want to manage different projects or properties separately without having to create a new LLC for each one.
This structure is often used by real estate investors, who might hold different properties in separate series to protect each property from liabilities associated with the others. It’s also appealing to businesses that operate multiple, distinct lines of business and wish to keep their operations legally separate without the complexity and expense of forming and maintaining multiple LLCs.
