How to form an LLC in Indiana
Given the limited liability protection and other benefits, it’s no surprise that a limited liability company (LLC) is a popular entity type of choice for entrepreneurs looking to start an Indiana small business. However, to capitalize on the convenience of an LLC, you must form it correctly. This step-by-step tutorial will help you do just that.
- When you form an Indiana LLC, you take advantage of a business structure that can provide a layer of separation between your personal assets and your company’s debts and liabilities to provide limited liability protection.
- You traditionally file for an Indiana LLC on the dedicated Indiana Secretary of State portal, where you submit your articles of organization and other relevant documents.
- A convenient way to file an Indiana LLC is to use Block Advisors’ Business Formation service.
An LLC is a business structure that can provide limited liability protection for its owners. This means that if, for example, someone successfully sues your business, you may not be personally liable for the amount they’re awarded. In many cases, the liability can generally be limited to your company’s assets.
Another exciting thing about LLCs is that they can utilize pass-through taxation. All profits and losses are passed through to the owners, who report the amounts on their tax returns.
The operating structure of your LLC is entirely up to you. You can run your enterprise yourself, with other people (known as members), or leave the job to a hired professional manager. When it comes to tax time, you’ll be automatically taxed as a sole proprietorship or partnership, depending on the number of members you have. However, you can also elect corporate taxation (S Corp or C Corp) by completing the necessary paperwork. Learn more about how an LLC is taxed.
Here are the most significant advantages of forming an LLC in Indiana:
- The company can take advantage of pass-through taxation to avoid double taxation.
- The company’s LLC status can provide limited liability protection. Generally, only company assets are at stake – your personal property can remain protected.
- The company has multiple options when it comes to management structure.
- The company doesn’t cease to exist if an owner retires or leaves the organization. The organization is terminated only when you file a dissolution form.
Ready to form your Indiana LLC?
Now that you know some of the advantages of forming an LLC, let’s dive into the Indiana LLC formation process.
The first step is to select your business name. One thing you should avoid here is using the same or very similar name as an existing business. So, think up a unique entity name. You can confirm you’re not using a duplicate name by visiting the Indiana Secretary of State business name search tool. Type in your desired name and the software will tell you whether it’s available.
Also, keep the following state guidelines in mind when choosing your name:
- The name must contain the term “limited company,” “limited liability company,” or an abbreviation of the two (“LLC” or “L.L.C.”).
- The name should not contain terms like corporation, general partnership, C corporation, or other phrases that indicate you’re using a different structure.
- The name should not contain the names of government agencies, like the Indiana Department of Revenue, Treasury, Secret Service, NSA, and CIA.
Your name is automatically reserved when you file Articles of Organization (see below). If you’re concerned that filing may take too long or you’re not quite ready, don’t worry. You can reserve your name separately by taking the following steps:
- Create an account on the Indiana INBiz platform.
- Press “Secretary of State Business Service Division.”
- Choose “Name Reservation” and follow the on-screen instructions to reserve the name for a small filing fee.
If desired, you can also get a doing business as (DBA) name for your company while there.
With your name ready, it’s time to submit Articles of Organization. This is an official document creating your LLC.
There are two ways to file Articles of Organization. You can use the Indiana INBiz platform or file your Indiana LLC articles by mail. The former is a quick and simple way to file. If you prefer the paper submission method, follow these steps. First, download the Articles of Organization form. Then fill it out and send it to the Secretary of State’s office at the following address:
Office of the Indiana Secretary of State
302 W. Washington St., Room E018
Indianapolis, IN 46204
The filing fees for each method are slightly different. If you submit your Articles of Organization online, you must pay $100. Filing by mail is $95.
Your Articles of Organization will likely include the following information:
- Name and physical address of the LLC
- Name and address of the person filing for the LLC
- Name and address of your registered agent
- Type and purpose of your enterprise
You can’t file Articles of Organization in Indiana without providing essential information about your registered agent. So, what exactly is a registered agent?
An Indiana registered agent is the liaison between your LLC and the Secretary of State or anyone else who may need to send you official documents. It’s a person or business entity that accepts service of process and other legal documents on your behalf.
You can choose to be your own registered agent. However, many entrepreneurs outsource this role to a professional registered agent service. Here’s why:
- A registered agent must generally be at their office during regular business hours (9 a.m. to 5 p.m.). to accept state and federal documents – a professional service frees up your time.
- A registered agent service helps protect your privacy. They mitigate the risk of disclosing your home address if you operate out of your home. If you operate out of a business location, a registered agent can reduce the chances of receiving sensitive information or news in front of your customers or business partners. For example, they accept Service of Process lawsuit-initiating documents on your behalf.
- A registered agent service ensures you promptly receive and respond to all government notices. Their job is to receive these documents for appropriate handling. By contrast, a business owner who acts as their own agent may miss a submission or notice among the myriad other responsibilities they balance.
You can see why many small business owners choose to use a registered agent service rather than go the DIY route. Luckily, if you choose to form your business with Block Advisors, you can designate a third-party registered agent.
Indiana does not require you to create an LLC Operating Agreement. However, building an operating agreement is still an important step when forming your organization.
An Operating Agreement is a document that determines how you’ll run your Indiana LLC. Among other things, it reveals the responsibilities of each LLC member and dictates how you’ll distribute profits and losses.
For example, if you and the other members have a disagreement, your Indiana LLC Operating Agreement can dictate how it is resolved. Keep in mind that your agreement will need to meet certain requirements to maintain legitimacy. The U.S. Securities and Exchange Commission’s EDGAR (Electronic Data Gathering, Analysis, and Retrieval) system is a good reference for searching Operating Agreement samples. Many include the following information:
- Basic details about your new business, like the entity name, principal residence, and registered agent
- Type and purpose of your enterprise
- Preferred tax structure
- Names and addresses of each LLC member
- Management structure (member-managed or manager-managed)
- Capital contributions of individual members
- Profit and loss division
- Liability and indemnification statement
LLC tax requirements are sometimes considered more flexible than other business structures. However, this doesn’t exempt you from paying federal and state taxes. Before tax season, you should determine whether applying for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS) is necessary.
To file, visit the online IRS EIN application portal and follow the on-screen instructions. You should receive your EIN immediately if you use the portal correctly. Upon successful application, the IRS sends an EIN Confirmation Letter that can be downloaded from the IRS platform. Alternatively, if you faxed the SS-4 application, you’ll get the form by mail.
If you prefer to have assistance when obtaining an EIN for your company, you’re not alone. Small business owners using Block Advisors Business Formation service streamline the process. If you go this route, you conveniently apply for an EIN as part of your service package.
Technically, multi-member LLCs must have an EIN. However, many single-member organizations can still opt to obtain one. Having an EIN can support other business tasks beyond tax time such as:
- Opening a business bank account
- Acquiring business licenses and certifications
- Applying for a company credit card or small business loan
- Managing payroll
Your LLC is official once the Indiana Secretary of State approves your LLC filing. Still, this doesn’t mean the work is over. You must maintain your LLC status and good standing with the Secretary of State. To do this, you must file a business entity report every two years. Note: in most other states, reporting is required annually.
This biennial report is similar to the Articles of Organization you submit during your LLC formation. It contains basic information about your enterprise:
- Name and street address of each owner
- Registered agent name and physical address
- LLC number issued by the Secretary of State (aka company ID number or entity ID number)
Indiana’s State Secretary requires you to file your report in your anniversary month. For example, if you certify your organization in November, your first business entity report is due in two years – also in November.
Here’s how you can submit the report:
- Navigate to the Indiana Secretary of State website and find the Business Forms section. Go to the lower part of the website and press business entity reports.
- Fill out the paper.
- Log into your Indiana INBiz platform or create an account from the “Sign Up Now” menu.
- File the report.
If you hand in the report online, the filing fee is $32 (payable by credit card). The state fee is increased to $50 if you submit the report by mail at the following address:
Office of the Indiana Secretary of State
302 W. Washington St., Room E018
Indianapolis, IN 46204
If you’re like most budding entrepreneurs, you probably can’t wait to launch your Indiana LLC. LLC tax benefits like the flexible structure and possible liability protection appeal to many in your position. But as you decide what option is best for you, make sure you don’t forget to consider your business needs and individual circumstances.
Laws vary from state to state. You may want to seek the advice of an attorney to assess the intricacies of your circumstances before making a choice. The last thing you want is to make a mistake when filing for your organization. Otherwise, you may risk your good standing with the Indiana Secretary of State and incur hefty penalties.
If you decide to form an LLC, the process can be lengthy and take time away from other important enterprise launch activities. Block Advisors is here to help with convenient and affordable Business Formation Services. Simply provide a few basic business details, and you can be on your way to official LLC status in under ten minutes. Block Advisors submits all the paperwork on your behalf so you can focus on your small business dream.
This article is for informational purposes only and is not a substitute for legal advice. You may want to seek the advice of an attorney to evaluate all relevant considerations.
About the Author
Carl Breedlove is a lead tax research analyst at the Tax Institute. He specializes in business, rental property, and state taxation. Carl is a University of Missouri-Kansas City School of Law graduate with a JD and an LLM in tax.
An Indiana LLC costs $95 to set up. This is the filing fee for submitting your Articles of Organization. In addition, you’ll need to pay $32 to file your annual report online each year.
Indiana is considered a good state to open an LLC by many primarily because it provides all the benefits of an LLC, such as taxation flexibility, the ability to choose your management structure, and limited liability protection.
How long it takes to form an LLC in Indiana for your small business depends on how you file. If you file online, it can take less than one business day. By contrast, mail and in-person filings can take two to three weeks or even longer.
An LLC formation service can do this for you for a stress-free experience. You can also file paperwork for an LLC in Indiana through the Indiana Secretary of State online portal. Additionally, you can submit the documents by mail, but it’ll take much longer.
The minimum number of members for Indiana LLCs is one. There isn’t a maximum number of members, so your LLC can have as many owners as desired.
The benefits of forming an LLC in Indiana include pass-through taxation, limited liability protection, and the ability to select your ownership and taxation structure.
Setting up a single-member LLC in Indiana is the same as launching a multi-member LLC. It’s even easier to form a single-member company because you provide less information in your Articles of Organization and operational agreement. Owners of single-member companies can also use their social security number for sales tax, income tax, federal tax, and other tax purposes.
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