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How to start an LLC in Indiana in 7 steps

how to start an llc in indiana

Starting a Limited Liability Company (LLC) in Indiana presents an exciting opportunity for entrepreneurs. This article is designed to guide you through the process of forming an LLC in the Hoosier State, from coming up with a business name, to understanding the costs and benefits involved. Whether you're a seasoned business owner or new to the entrepreneurial world, understanding how to go about forming an LLC for your business idea is crucial.

As we delve into the details of how to start a business, remember that incorporating an LLC is not simply completing legal documents the ultimate aim is establishing a stable, profitable business.

How to start an LLC in Indiana in 7 steps

01. Pick your business name

To start a business in Indiana, the first thing you need to do is choose a name for your LLC. This is not just a creative process but a legal one as well. It's important to ensure that your chosen name ends with "LLC," "L.L.C.," or "Limited Liability Company" to comply with state requirements. Your business name should be unique and not too similar to other names on record with the Indiana Secretary of State

If you plan on building a website, you'll also need to secure a domain name for your business. You can use a domain finder to do this. For branding it's best if your domain and business name are the same, or very similar.

start an llc in indiana - domain name

Tip: If you're having trouble coming up with a unique name for your business, consider using a business name generator.

how to start an llc in indiana - business name generator

02. Choose your registered agent

Every LLC in Indiana must have a registered agent, an individual or company that agrees to accept legal papers on behalf of your LLC. Your registered agent must be available during regular business hours and have a physical address in Indiana in order to fullfill the role requirements. They'll be expected to handle important and confidential business documents, so making sure they're reliable is paramount.

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Need help setting up your LLC? Wix has partnered with LegalZoom, the No. 1 choice for online business formation to help you start, run and grow your business.

03. Obtain state business permits

Depending on the nature of your business, you may need specific permits or licenses to operate legally in Indiana. These could range from general business licenses to industry-specific permits.

To obtain the necessary permits in order to register your business, you'll need to check with your local and state agencies to determine what exact permits you need. The next step is to fill out all required paperwork accurately and then submit them to the appropriate authorities. Finally, you'll need to pay all relevant permit and licensing fees.

Let’s say you want to start a courier business in the state.  First, you’ll need a permit to operate. You may also need additional permits depending on the nature of your courier business, for example, if you plan to transport hazardous materials.

04. File Articles of Organization

The Articles of Organization is a critical document that officially creates your LLC in Indiana. You'll file this with the Indiana Secretary of State, either online or by mail, along with the required filing fee. To file it you'll need important details such as your LLC's name, registered agent information and management structure. Then fill out Form 49459, this is the specific form used for filing an LLC's Articles of Organization in Indiana. Complete the process by paying the $95 filing fee. 

LLC's in Indiana must also file a Beneficial Ownership Information Report (BOIR) with FinCEN. For LLCs created in 2024 or after, the report must be filed within 90 days of it's creation or registration. Or from 90 days of the Secretary of State’s public notice of its registration. The earlier date is the one that must be followed. For any LLCs created after January 1st, 2025 you must file a BOIR within 30 calendar days of its formation.

05. Draft your LLC operating agreement

Although not legally required in Indiana, creating an operating agreement is highly recommended. This internal document outlines ownership structures, member roles and operational procedures for your LLC. It's especially important in the event of future conflicts within your LLC members, as anything related to the operation and management of the company should be laid out in this agreement.

06. Apply for an EIN and pay relevant taxes

An Employer Identification Number (EIN) is similar to a social security number for your LLC. It’s necessary for hiring employees, opening bank accounts and filing taxes. To apply for an EIN you'll need to request one through the IRS website or via mail.

Once you've done this it's important to understand the state-specific taxes that apply to your LLC, such as franchise tax or sales tax. In Indiana for an LLC owner this includes a 15.3% self-employed tax (12.4% social security, 2.9% Medicare). For more information, visit the Indiana Department of Revenue website

07. Organize annual reports

Indiana requires LLCs to file biennial reports to keep their information up-to-date with the state. These reports include current contact information and details about your business operations over the past two years.

To ensure you’re compliant with this make sure to: 

  • Know due dates: Your Indiana Annual Report is required biennially by the end of your registration anniversary month.

  • Maintain proper records: Keep accurate records throughout the year to simplify report preparation when due dates approach.

  • Submit and pay fees: Complete the submission process by paying the filing fee, $32 online or $50 by mail.

In addition to taxes, just about every LLC is required to file an annual report, which includes basic legal information and activities from the previous year. You may owe filing and renewal fees along with your report. Tax season is also a good time to make sure that your registered agent, licenses, and permits are all set for the upcoming year.
Shylene D’Addario, VP and associate general counsel at LegalZoom

How much does it cost to start an LLC in Indiana

Understanding the costs involved in forming an LLC in Indiana is crucial for budgeting and financial planning. Here's a breakdown of the main expenses you can expect during the process:

  • Filing fee for Articles of Organization: This is the fee paid to the Indiana Secretary of State to officially register your LLC. This is a one-time cost that is mandatory for all new LLCs. For an LLC it costs $95.

  • Registered agent fee: If you hire a professional registered agent service, they'll charge a variable fee for their services.

  • State business permits and licenses: The cost varies depending on the type and number of permits and licenses your specific business requires.

  • Operating agreement: While drafting an operating agreement isn't associated with a state fee, you may incur costs if you hire an attorney or use a professional service.

  • Employer Identification Number (EIN): Obtaining an EIN from the IRS is free of charge.

  • Annual report filing fee: There is an annual fee for filing your LLC's report with the state. In Indiana this is $32 online or $50 by mail.

Additional costs may include:

  • Legal or financial consulting fees: If you seek professional advice during the formation process, these services will add to your startup costs.

  • Domain registration and website creation: Making a website is crucial. Costs might include domain registration and potentially hiring a web designer or using a website builder like Wix.

  • Business insurance: Depending on your industry, you might need insurance to protect your LLC, including your assets, staff and resources.

Who can start an LLC in Indiana

To form an LLC in Indiana, there are specific eligibility criteria that need to be met. It's crucial to understand who can start an LLC in the state before you begin the process.

  • You must be at least 18 years old to form an LLC in Indiana.

  • There's no residency requirement, meaning you don't have to live in Indiana to start an LLC there.

  • You don't need to be a US citizen or permanent resident to form an LLC in Indiana.

  • Almost any type of business can form an LLC, except for certain professional services that may require a different business structure.

Benefits of starting an LLC in Indiana

Forming an LLC in Indiana offers a range of benefits that resonate with many new or small business owners. These advantages encompass legal protection and tax perks, making it a popular choice among entrepreneurs.

Learn more: Benefits of an LLC

Limited liability protection

As the name suggests, LLCs protect your personal assets from business debts and lawsuits.

Pass-through taxation

Profits go directly to the LLC members, who then report them on their personal tax returns, avoiding the double taxation faced by some corporations.

Flexibility in management

Unlike corporations, LLCs have fewer formalities and can be managed by their members or appointed managers, providing flexibility in how the business is run.

Credibility with customers and partners

Having 'LLC' after your business name can enhance your credibility with potential customers, suppliers and financial institutions. You can then choose an .llc domain for your website to reinforce this credibility. 

Ease of formation and maintenance

Compared to corporations, LLCs have fewer formalities and requirements for starting and maintaining them.

benefits of starting an llc in indiana

Potential disadvantages of starting an LLC in Indiana

When thinking about setting up an LLC in Indiana, it's crucial to carefully assess the pros and cons. Recognizing any potential cons is key to deciding if an LLC suits your business needs. Here are potential challenges you might face with an LLC in Indiana:

Self-employment taxes

Members of an LLC are considered self-employed and must pay self-employment taxes on their share of the profits.

Annual fees

LLCs must pay an annual report fee and may have other recurring fees that vary by state.

Limited growth potential

Some businesses may outgrow the LLC structure, as it can be more difficult to raise capital compared to a corporation.

Why start an LLC over another business entity in Indiana?

Choosing the right business structure is crucial for all entrepreneurs. In Indiana, forming an LLC is often preferred because of its advantages for new and small business owners. But it's important to compare it with other types of business structures to understand why an LLC might be the best choice for your business.

Here's how an LLC stacks up against other business entities:

  • Sole proprietorship: Unlike a sole proprietorship, an LLC provides personal asset protection, separating your personal liabilities from those of your business.

  • Partnership: An LLC offers more protection for each member compared to a partnership, where each partner can be personally liable for the debts of the business.

  • Corporation: While corporations provide limited liability protection, they’re also subject to double taxation (taxes on both corporate profits and shareholder dividends). An LLC avoids this with pass-through taxation.

start an llc in indiana - business entities

You've formed your LLC in Indiana, now what?

Building and expanding your firm is only the beginning when starting an LLC in Indiana. You should take a number of post formation actions to guarantee that your LLC runs properly and continues to abide by state rules. Some of these include:

  • Keep your personal and business finances separate by opening a dedicated bank account for your LLC.

  • Depending on your business type, you may need various insurance policies to protect your company.

  • Make sure to file your annual reports on time and renew any permits or licenses as needed.

  • Familiarize yourself with federal, state and local tax requirements to avoid any surprises during tax season.

  • Update your operating agreement as needed to reflect changes in management or ownership structure.

  • Create a logo with a logo maker, establish a brand identity and build a professional website to present a cohesive image to customers. 

  • Good financial management is essential for any business. Set up an accounting system that allows you to track expenses, profits and financial growth accurately.

Looking to start an LLC in another state?

How to start an LLC in Indiana FAQ

How long does it take to form an LLC in Indiana?

The time it takes can vary. Once the Articles of Organization is filed, it typically takes about 5 to 7 business days for the state to process.

Do I need a physical address in Indiana to start an LLC?

What's required to start an LLC in Indiana?

Do I need to pay taxes as an LLC in Indiana?

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