Indiana LLC – How to Start an LLC in Indiana

Starting an Indiana LLC is the right decision for any start-up. With a favorable work environment and diverse tax benefits, it is cost-effective to start any business here. Those who are newly setting up their business must know about the procedural steps to start an Indiana LLC.

indiana llc

By following the steps below, one can easily form an LLC. However, it is recommended to seek help from professional services to start your LLC in Indiana to handle financial statements and other legal documents. Meanwhile, if you are thinking of setting up an LLC in another state, then do check out Start My LLC

How to Start an LLC in Indiana

The following guide is simple but essential for all entrepreneurs, especially for start-ups. All these procedures are to be followed according to the state’s government guidelines. Make sure to be careful while moving forward with the steps.

Step 1: Decide a Name for Your LLC

The first step in your application for an LLC is to decide the name you want to give to your LLC. You have to choose a name that should be related to your business and should also be approved under the state government’s naming norms.

You should check the name you are thinking of giving to your LLC on the Secretary of State online services website or visit the Business Entity Search to check the name’s availability through the list of names. 

Here are some of the pro tips that will help you keep a name that will help you grow.

  • You should keep the name simple and try not to add some difficult words to the name. It can confuse the audience, and they won’t remember your name for a longer period.
  • There are some words like bank, attorney, and university, which you should avoid if not required. This is because such names are going to require an extra set of paperwork through a lawyer.
  • The name should also be available for making a website as you should keep the name of your business the same everywhere. Check if the name is still available for use with NameCheap and for web hosting, which is best to get now, check out Kinsta, and Google Suite, for your professional email account. 

For more requirements on naming your LLC, see other requirements.

Step 2: Assign a Registered Agent in Indiana

After you have decided the name, you must choose a registered agent in Indiana. The agent is going to work on your behalf. Agents are professionals and can be a person or a business entity. They will be responsible for receiving all documents. The documents consist of the tax forms, lawsuit notices, legal documents, and internal documents on their registered office in Indiana.

Some of the professional service providers that can be your agent and also, are able to handle all your official notices are:- 

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The best LLC services that would help you ease into operating an LLC or even other business structures in Indiana. From handling business license searches and filing to tracking upcoming filing deadlines and acquiring business insurance or professional liability insurance, an agent will answer all your questions and conduct all activities you need to set up your LLC. 

It would be so much time saved on your end if you avail of a registered agent’s service. You will have more time to focus on other business matters, not to mention you are guaranteed to meet every state requirement as you have experts handling everything. 

Step 3: File Certificate of Formation in Indiana

The certificate of formation is the legal document that you are required to start your LLC in Indiana. It establishes the type of LLC you are setting up, if member-managed or managers-managed.

Before you file the formation document, you need to attach documents such as name registration certificate, registered agent’s details, and/or employees’ details. The filing fee one has to pay is $95 online or $100 by mail. 

Online Filing:

NOTE: But in some states, you are not allowed to fill the online form. For such people, there is a second option of sending the form through the mail.

File by Mail:

  • Download the original form from the Indiana Limited Company Certificate of Formation site.
  • Fill out the form and send it through an email to the Secretary of State Office or county judge’s judge.
  • With this form, the legal document to be attached will be the above-mentioned formation documents along with your cheque.

Mailing Address:
Secretary of State Business Services Division
302 West Washington Street
Room E018
Indianapolis, IN 46204.

More Certification of Formation filing requirements in Indiana is mentioned below.

Step 4: Create Your Indiana LLC Operating Agreement

There are some major outlines and rules, regulations, and powers of attorney that become the LLC’s foundation. All of these rules and operational procedures are mentioned in the liability operating agreement. Also, when the agreement is formed, all the LLC members should agree with these rules. It will ensure that the limited liability company works smoothly and every person related to the company is on the same page.

If you want to start an LLC in Indiana, it is not required legally to form a limited liability operating agreement. But if you want to save your business from any future conflict, it is advised that you should make this effective operating agreement.

Step 5: Filing an Indiana LLC EIN

The E.I.N. is also known as the Employer Identification Number, which Internal Revenue Service provides. It is a nine-digit unique number given to the businesses, and it is for tax purposes. When you are filing your limited liability company’s taxes, you need this number for the government official and taxation agencies; this is your identity.

You can file for the EIN online through the Indiana Internal Revenue Service website under Register an Entity section. Why do you need an EIN? The EIN will help you contact a business bank and will help you process your bank application.

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935

To know more details about the documents required, you should jump to the ‘requirement section‘ below. 

Why Set Up an LLC in Indiana?

What is an LLC in the first place? It is a type of business that protects you and your assets from issues like debts.

Before you start an LLC in Indiana, one should look at the benefits of incorporating into Indiana. Below mentioned are some of the benefits that an LLC will enjoy if you choose Indiana for incorporation.

The Enterprise Zone Of Indiana

The biggest enterprise zone in Indiana is Bloomington which is known to provide the maximum benefits to the state. When incorporating in this area, an LLC is provided with a tax credit on inventory kept and on the gross income. Other benefits are loan interest credit, credit on investment costs, and credit on employment costs.

Research and Development Sales Tax Exemption

When research and development-based LLCs are started in the state, they are provided with 100% sales tax exemption. The state is least developed in the R&D sector and wants to attract more and more businesses to come and start their functionality in the state.

Hoosier Business Investment Tax Credit

This is a tax incentive that is provided to start-up companies. The tax credit on their sales made an annual filing is provided to them. The main aim of the Hoosier program is to attract more and more entrepreneurs to the state for investment and job creation. This is going to raise the standard of living of residents here.

Pros of LLC

  • LLC does not have detailed formalities like minutes of shareholders’ and directors’ meetings like other corporations.
  • No restriction on LLC regarding the members and shareholders. One can structure the company as one are willing to.
  • Unlike corporations, the cash method of accounting is easy as LLCs don’t use the accrual method.
  • In an LLC, due to personal liability insurance, no shareholder and investor can possess the personal asset of the member.
  • Tax benefits such as unemployment insurance taxes on any coverage for employees, and have different tax classification options.

Cons of LLC

Cost of Incorporating an Indiana LLC

When you decide to form an Indiana LLC, then knowing the cost is an important aspect. Below mentioned is the exact price to start an LLC in Indiana.

  • The cost of reservation of the name for LLC is $20, which is paid to the SOS.
  • After that, you should file the articles of formation for which the fees of $100 paid to the same SOS department.
  • The business owners need to file a biennial report for which they need to pay $50. If you take the help of mail, then the fees are $32.
  • The fees of the agent can be as low as $49. Check out the best agents and their costs before hiring one for your LLC. (best LLC services)

Top Businesses of Indian State

When you are starting an LLC in Indiana, you need to know complete details about the state’s economy. That is why here are the top economy contributors with their contribution.

Manufacturing Businesses

The contribution of the manufacturing sector to the economy of Indian is around 25% of the GDP, i.e. $91.14 billion. The state is known for automobile manufacturing, for which it is ranked second in the state, and the steel businesses of the state ranked as 1st in the country. Other than that, Indiana is known to manufacture mobile homes, electrical products and hardwood furniture.

Pharmaceuticals and Medical Devices

Indiana is the home of the world’s largest pharmaceutical and medical device companies like Eli-Lily, Johnson Nutritionals and Bristol-Myers Squibb. With the help of these companies, the state is ranked 5th in the shipment of pharmaceutical goods and managed to contribute around $38 billion to the Indiana GDP.

Transportation and Warehousing

Due to the state’s geographical location and easy accessibility, transportation businesses are flourishing well in the state. The state’s boundary is 50% land, and the rest is the sea, due to which the state is responsible for 70 million tons of cargo through 2 central freight systems.

Low-Investment Businesses in Indiana

The small investment businesses of the state are:-

  • Food processing businesses
  • Online surveying
  • Microbrewery businesses

Requirements for Setting up LLC in Indiana

When you are setting up your LLC in Indiana, then there are some basic requirements that you have to fulfill. They are mentioned below in detail.

LLC Name

First of all, you have to think of a name for your LLC. When you think of the final name, you should get it registered through Indiana state’s official web portal. Before finalizing the name, it would be better that you check the availability of the name and also that it is feasible for your business or not. It would help if you thought from the customer’s perspective that you would attract with such a name. 

Directors or members

When you start an LLC, you must be some people in your mind that you want to do work with as members. You should have the current list of all those members with their approval to be a part of your LLC venture. Some points that you must always have in your mind when working for the list of directors is:-

  • The LLC can be started with one or more than one member. There is no restriction on the business owners. 
  • It is not required for the member to have a permanent resident of Indiana to be a part of LLC. 
  • The minimum age of the member should be 19. 
  • The complete legal name and address of the member must be required for Articles of Incorporation. 

Formation Articles

The articles of formation should be ready when you are forming an LLC. In these articles; you should mention the details about the business services, the members who are going to be the part of the business, and the profit division structure. The last one should be approved by every member so that there is no future conflict.

Along with that, there should be the agent certificate that you have appointed to help you with the step guide. The last thing that should be attached with the certificate of formation will be the services list. There must be some offering of your business which should be mentioned in detail.

Also, there should be a fixed value of stock required to be mentioned in articles of formation and address of the registered agent mentioned below. While selecting the business agent, you should ask them to always be available during office hours or not because they have to handle all the legal and tax documents.

Indiana state’s demand is a bit different from the other states. Here the business entity needs to submit the form to the Judge of probate instead of the state’s secretary. 

Corporate records

The Indiana LLC has to different corporate reports before setting up. This included the initial reports that include the initial business privilege tax filing returns and annual report. Both of these reports should be filed within two and one-half months after they start functioning. The next is the counties filing that the business has to file before its incorporation. They must be submitted to the principal office for reference. With time, the requirement increases, which is discussed below. 

  • If any member has taken any action without a meeting, it must be added to corporate records. 
  • A copy of the original by-laws and the amendments that are made in them, later on, should also be added to the records. 
  • The complete communication of shareholders over three years should also be submitted. 
  • The recent annual report should be added to the corporate records. 

Taxes and licenses

The taxes of the LLC should be filed on time, and for that, E.I.N. is important. This should be applied when all the formalities are completed. Also, according to the service you are willing to provide, you have to look at whether the service requires an annual license to operate or not. If required, then you should go through the procedure of any license formation for your LLC office.

The taxation requirements are:-

  • Indiana requires the annual report that you file with the Department of Revenue. In the annual report, the taxes added are  Business Privilege Tax Return and Annual Report, and Schedule AL-CAR. 
  • You should need a complete detail of every small to large state and center tax. 
  • There is a state tax identification number that a business must procure. 

It is always recommended to get professional help to understand more about the LLC requirements. Check out the top 5 LLC services to look for today. Below is the list of Best LLC services, 

Indiana LLC Formation Summary

Time needed: 30 minutes.

To summarize, here are the simple steps for creating an LLC in Indiana. To learn more about the steps in this list, simply click on them.

  1. Choose a name for your Indiana limited liability company.

    The first step is to come up with a business name that includes the word “limited liability corporation” or one of its abbreviations (LLC or L.L.C.).

  2. Select a registered agent for your company.

    Selecting a registered agent for your LLC is needed in Indiana. Check out our list of the top five LLC services in the United States.

  3. Create a certificate of formation.

    When forming an LLC, you must file a formation certificate. It may be referred to as any of the following, depending on the state: Articles of Organization, Certificate of Formation, or Certificate of Organization.

  4. Make an operating arrangement.

    When forming an LLC, an operating agreement is not a legal necessity, but it is strongly recommended.

  5. Obtain an EIN

    The Employer Identification Number (EIN), also known as the Federal Tax Identification Number, is used to identify a corporation in the same way that a social security number is used to identify a person.

F.A.Qs

What is the difference between LLC and C-Corp?

The C Corp’s structures are very complex compared to the LLC, which offers a flexible and easily changeable structure. Also, the LLC is saved from the disadvantage of double taxation that a C Corp has to bear, but the LLC has a privileged taxation system due to pass-through entities.

How does LLC be different from S-Corp?

The major difference that the businessman will notice among the LLC and S-Corp is the flexibility. In LLC, you can allocate income according to your rules and change them according to your will. Also, there is a different LLC interest class that can be considered a downside of S Corp.

Distinguish between LLC, Partnership & Sole Proprietorship?

In the limited liability partnership and sole proprietorships, the owners are responsible for their debts, but the LLC facilitates owners. The LLC members’ assets are saved, and they are not considered the reason behind the debts that a company has with the help of limited liability protection. Moreover, the member’s liability is only limited to the investment that they have made in the LLC, unlike the sole proprietorships and solo partnership firms.

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