A Limited Liability Company is an entity that enjoys the same amount of protection that corporations are provided. When your form an Indiana LLC, you are automatically given the protection through limited liability. You will be able to enjoy the security of not being held accountable for the liabilities and debts of your Indiana LLC.
An LLC is one of the most flexible entities. If you form your Indiana small business as an LLC, you’ll be able to do anything with its terms of ownership, company rules and management structure. You can also manipulate other aspects of the business which you think needs change.
With this highly bendable feature and basic freedom to not follow every state law, many entrepreneurs opt to form LLCs rather than corporations.
While an LLC adopts the limited liability protection of a corporation, it adapts the flexibility to general partnership when it comes to single taxation. Instead of shareholders, an LLC has members who are responsible in paying personal tax from the profit distributed by the LLC’s income.
If upon assessment, an Indiana LLC qualifies based on IRS guidelines, it will only be taxed once like a partnership. LLC’s are also similar to S-Corporations because they are not subject to numerous tax restrictions.
As mentioned, an Indiana LLC is highly customizable and this includes its management structure. You can basically manage your Indiana small business based on how you want to run it. You can create your own organizational structure, appoint your own people or even run the business yourself or with your co-owners.
Unlike corporations, an Indiana LLC is not required to follow state laws when it comes to organizing a structured management system. You have the freedom to arrange and change this yourself.
Incorporating your Indiana small business regardless of entity will definitely boost its corporate identity. Running an incorporated business will not only enable you to protect you and your business, you will also protect consumer rights.
Having an LLC right after your business name will give you a boost of credibility because your customers know that you are a legitimate business regulated by both the federal and state government. This gives them the assurance to rely on your services.
The only state law that you need to follow when naming your Indiana small business is to include the words “Limited Liability Company”, “L.L.C.” or “LLC” after your chosen business name. However, as to creating a name for your startup, you can basically decide on anything as long as it does not confuse the public and it doesn’t have any duplicates.
You can check for business name duplicates at the business name database of the Indiana Secretary of State. If you want to reserve your business name for 120 days, you can do so by filing an Application for Exclusive Use of Corporate Name. The filing fee that you need to prepare is $20.
Indiana requires all state LLCs to have a registered agent to receive service of process notices within the state. Your Indiana Registered Agent can be someone who officially resides in the state or a domestic or foreign business legally authorized to conduct business in the state.
Before hiring a registered agent for your Indiana small business, make sure that he/she has a physical address or office and is available from Mondays through Fridays during regular business hours. You can also set your own standards when it comes to screening applicants.
Registered agent services can be expensive; it might even cost you up to $160 every year, however, if you incorporate your LLC with IncFile – you can avail of a free registered agent service for one full year.
To complete the formation of your Indiana LLC, you need to file your articles of incorporation. This must be filed before the Indiana Secretary of State Business Services Division.
Your articles must have the following information: LLC name and address, registered agent name and address, timeframe of doing business (perpetual or short-term) and management structure (member or manager managed). You can file online or through mail. Don’t forget to prepare a filing fee of $90!
An EIN or Employer Identification Number is similar to an SSN in individuals. It is a 9-digit identification number required by the IRS for all businesses in the United States.
An EIN has many uses, however, three of its top uses include: hiring of employees, opening a business bank account and filing for income taxes. Obtain your EIN for free on the IRS website.
An Operating Agreement is not required to start an LLC in Indiana, however, it’s a highly recommended business step. The document outlines the financial and operational structure of your business, as well as its ownership structure.
The purpose of an Operating Agreement is to make co-founders aware of the aforementioned aspects of your startup. You can create your own Operating Agreement by using Rocket Lawyer’s structured Operating Agreement.
Although not a mandatory requirement when starting an LLC in Indiana, a business plan will boost your chances of business success. Most entrepreneurs think that it’s an outdated document, but I say otherwise. Writing a business plan can do wonders for your Indiana LLC.
It will help you determine whether your business idea is viable or not in the first place. Your business plan will contain all data and information about your business, backed up by thorough research and facts, and this will give you the basis when making business decisions.
If you want to write your own business plan, but you lack the knowledge and experience to do so, here are some quick links to resources that can assist you.
Similar to an S-Corporation, your Indiana LLC is considered a pass-through entity. Pass-through entities are not required by the state and federal government to pay for income tax. Rather, your Indiana LLC’s income will be given fairly to your Indiana LLC members who are required to pay taxes based on the amount awarded to them.
By default, your Indiana LLC is considered a partnership for tax reasons, however, there can be exceptions for single-member LLC’s because they can be considered disregarded entities. While this is the case for most LLCs, your Indiana LLC can also be classified as a corporation if you elect it to be one.
With this, it can be subjected to the same tax policies applied to corporations, which are required to pay for net income tax.
The state of Indiana requires that all LLCs within the state file a biennial report that contains progress and activity reports about your business. The report is filed every two years due on the anniversary month of the incorporation.
The Business Entity Report must be submitted before the Indiana Secretary of State’s Office. It can be filed online or through mail. If you intend to file by mail, prepare $30 for the filing fee and $22.24 for online filing.
The waters of the business industry is both tricky and risky. To survive the strong waves and changing weather conditions, you need to hold tight to your steering wheel and maneuver your ship in the right speed and direction to overcome all the obstacles.
With this, you need to protect your business as well as yourself from unexpected and future risks; the only way you can do that is if you incorporate. An LLC is a great entity that can safeguard both you and your business’s interest. If you want to start an LLC, you can make this simple guide as your point of reference.
Learn how to form an LLC in Indiana the easy way and complete the incorporation process fast!
Please keep in mind that this guide is not meant for legal purposes and is not legal advice. If you want specific answers for forming an LLC in Indiana, consult with a professional.