#1 Choose a Name for Your Indiana LLC
You’ll first need to choose a name for your new limited liability company. Keep in mind that not just any name will do.
Your LLC name will have to abide by the following rules:
- It must include either “limited liability company” or an abbreviation (i.e. LLC or L.L.C.)
- It can’t include words that would cause someone to confuse your business with a government agency or another type of business, such as “Inc”
- Certain words may be restricted. For instance, your LLC can’t contain the word “doctor” if you don’t have a licensed doctor at your company
Furthermore, any LLC name must be available in Indiana alone (not throughout the entire country). You can check to see if a given name is available by searching on the state of Indiana’s official website.
Lastly, it’s a good idea to see if your LLC’s potential name is available as an unclaimed web domain.
If it’s unclaimed, it’ll be easier to make a website associated with your LLC much easier. You’ll be able to make a site named, “yourcompanyllc.com” or something similar – easy!
What if you’re attached to a certain name and don’t want to come up with a new one but that name’s domain is taken?
You can try to contact the owner of the domain and see if you can buy the name from them.
It may help to come up with a list of potential names for your LLC and work through them one by one from the most popular to least popular.
#2 Select a Registered Agent
Your LLC will also need a registered agent.
A registered agent is an individual that serves as the point of contact for any official documents on behalf of your business.
For example, if your LLC needs to be served court papers for one reason or another, those papers will be delivered to your registered agent.
The registered agent serves as a go-between entity for your business and the government or other companies. Registered agents streamline communication and prevent other LLC members from worry about those matters.
These include customer requests, lawsuits, official notification of LLC formation, etc. All registered agents must fulfill the following requirements:
- They must be a resident of Indiana with an address OR a licensed corporation in the state
- They must be authorized to conduct business in Indiana (not in trouble with the law)
You can select yourself to be your company’s registered agent, or you can select another officer in your organization. Just make sure they meet the requirements.
Alternatively, you can hire a registered agent service. These services are organizations that lend registered agents to other companies.
In this case, the service itself counts as your registered agent and assigns a for-hire officer to your LLC.
This may be a good idea if your LLC is small and you don’t have the manpower to spare for a dedicated registered agent position.
#3 File Articles of Organization
Before you file your Articles of Organization, you’ll need to decide whether your company will be manager-managed or member-managed. Both are mutually exclusive styles of management.
In short, a member-managed LLC has a larger number of members or official officers (generally speaking). However, those members do not need to be involved in the day-to-day decisions or operations of the LLC. One or more dedicated managers will handle all important decisions.
In a manager-managed LLC, members are not required to vote on business decisions. Managers are granted explicit authority to call important shots.
Member-managed LLCs are the opposite.
They have smaller or more manageable numbers of members and each member gets a vote for important business decisions. This style of LLC requires that all members be willing to be involved in the day-to-day goings-on of the business.
Both ways can work. But you have to decide which you will follow ahead of time since the Articles of Organization will require you to state this structure outright.
The Articles of Organization describe how your organization is structured, who is in charge, who votes, etc.
Furthermore, Articles of Organization outline other basic details about your LLC, such as what it does, the goods it produces, etc.
Note that each state has different requirements for your Articles, including:
- The exact name of the company
- The mailing address or the address of the registered agent
- The name of the registered agent
- Additional important information about the company managers, officers, and more
Each Articles of Organization will be reviewed by Indiana’s Secretary of State. So it’s important to get them right the first time to avoid wasting time or having to pay different fees.
You have the option of filing your Articles of Organization online or by mail. Were going to break down each one.
File Articles of Organization Online
- Create an account on the official website. You’ll provide an email address and some personal information. Then you’ll get a verification code sent to your email to finish the registration process
- Visit the INBiz dashboard and click “Log in”
- Click “Start a New Business” which should be in the top menu
- Click “Next”, then “Frequent User”
- You’ll next need to select a limited liability company from the first available column and click “Continue”
- Now you’ll need to provide some information for your new LLC, including the name of your LLC if you have reserved it ahead of time. You can alternatively enter a name you hope to get by clicking “check availability”
- Then enter your email address twice, as well as how long you plan the LLC to remain in existence. The box you need to fill in is called “LLC duration”. You can check out the first box if you plan for your Indiana LLC to stay in business in perpetuity
- Enter the effective date for your LLC, which is the first day to the LLC exists. Since you’re filing for Articles of Organization, you can leave this blank. The effective date is the date on which you are filing the document in the first place! But you can alternatively have it go into existence at a later date (up to 90 days, in fact)
- Next, enter your LLC’s principle office address. This can be any address you can think of, including a PO Box address. Click “Next”
- Fill in the registered agent section. You’ll need to provide their name or company if applicable, as well as their email address twice. Click “Next” to proceed
- Fill in the manager and member information. This will inform the Indiana government of who will manage the LLC and how many members it includes. Be sure to click “Yes” if the LLC only includes one member or “No” if it includes more than one member
- You can list the names and addresses of any members of your LLC to be a part of public records by filling in the principal information section. This is not necessary, however
- You can optionally add more attachments, such as additional rules or regulations, to your LLC to be on public record next. Click “Next” if you want to skip this part
- The website will have you review your information for accuracy. Click “Edit” if you need to make changes or click “Next” if you want to proceed
- Next, click all three boxes if you agree to the terms and conditions and sign the first and last name of the LLC organizer. This will likely be you but it can also be any other owner of the LLC
- Click “Add to Payment Cart” when you’re done signing
- Click “Checkout”
- Then enter your billing information and click “Continue”
Your payment will be submitted in your Indiana LLC Articles of Organization will be processed shortly.
As mentioned before, you can alternatively file your Articles of Organization by mail.
File Articles of Organization by Mail
Download Indiana’s official LLC Articles of Organization form and fill it out, then mail it to the following address
Secretary of State Business Services Division
302 West Washington St.
Indianapolis, IN 46204
Fortunately, you’ll only need to file the Articles of Organization once. But you will also need to pay a fee: $95 for online submission and $100 for mail submission.
The fee is nonrefundable, so each time you try to file your Articles of Organization you’ll have to pay an additional fee.
We’d recommend filing online if possible. Your Articles of Organization may be processed as fast as one hour after receiving payment. But it may take between three and four business days if you file by mail instead, which adds to the time it takes to form your LLC overall.
#4 Create an Operating Agreement
Next, it’s time to create an operating agreement for your LLC. Indiana is one of the best states to form an LLC.
It doesn’t outright require an operating agreement, but it’s still a good idea to create one nonetheless.
Operating agreements are special legal documents. They outline an LLC’s ownership or operating procedures in much greater detail.
Think of an operating agreement as the Constitution for your business. If any member has a question about who has what powers or how decisions are made, you can refer to the operating agreement to resolve any disputes.
Operating agreements are also crucial since they serve as important legal precedent if there’s ever a lawsuit.
The operating agreement includes information like:
- The responsibilities of each member
- How new members can be added to the fold
- How members can leave and what profits or dividends they get as a result
- Specifics about the profits and/or dividends distributed
Take time to draw up a suitable operating agreement between yourself and any other managing members. That way there won’t be any misunderstandings in the future, and everyone can agree on how the LLC will be managed.
#5 Acquire an EIN (Employer Identification Number)
You’re almost done starting your Indiana LLC. The last step is to acquire an EIN or employer identification number.
As its name suggests, EINs are needed when your business plans to hire employees.
- 9 digits long
- Used by the IRS to identify your business from all the others in the country
- Needed if you want to open a business-specific bank account
- Needed to file and manage your taxes
EIN’s may also be called FEINs or federal employer identification numbers or FTINS or federal tax identification numbers.
Either way, just think of your LLC’s EIN as its Social Security number.
So how do you go about getting one?
Fortunately, you can get your EIN for free straight from the IRS once completing all the steps above.
As with filing your Articles of Organization, you can do this in two ways:
- You can request your EIN from the IRS online by following this application link
- Or you can apply for your EIN by mailing or faxing a downloadable form from the IRS website.
Request EIN Online:
- Click on this link: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
- Click “Apply Online Now” and read through all of the information of the screen
- Click “Begin Application”
- Select “Limited Liability Company”
- Click through the resulting pages, filling out the state in which your LLC was formed, how many members it has, etc.
- The next part of the application is “Authenticate”. In this segment, select whether your LLC is an Individual or Business Entity and click “Continue”
- Insert your full name and SSN, and click “Continue”
- Next, you’ll provide the contact information for your LLC, including its address and phone number. You’ll have to use an accessible physical address as the IRS doesn’t allow you to use a PO Box address
- Click “Accept Database Version” and “Continue”
- Next fill in the details of your LLC, including its name, the county your LLC is located in, the state it was created in, the date the LLC was formed, and more. Click “Continue” when you’re done
- All that’s left is to confirm how you would like to receive your EIN confirmation letter. You can choose to either receive the letter online or have it mailed to you
- The last step will have you review the entire application before clicking “Submit” to finalize the application
Request EIN by Mail
Mailing an EIN request is a simple process. The IRS’ mailing address for EIN applications is as follows:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
You can also fax your application to the IRS by faxing it to 855-641-6935. Regardless, you don’t have to pay any fee for applying for an EIN.
Extra Consideration – Tax Structure
There’s one more major thing you should consider when setting up your LLC in Indiana: the tax structure.
The tax structure for your LLC will determine how and when you pay taxes on business income.
This can affect the dividends and profits for each member (including yourself).
There are three main types of LLC tax classifications:
- Disregarded entities – A classification reserved for single-member LLCs or sole proprietorships
- Partnerships – A classification for LLCs that have more than one member
- S or C Corporations – Classifications for larger LLCs. They are still not technically incorporated
There are benefits and downsides to each status.
In general, disregarded entities are the simplest and are perfect if you want to avoid being double-taxed.
However, any owners of the LLC will be taxed for money not taken as direct profits (AKA dividends).
Being classified as a partnership is also relatively simple and can help you avoid double taxation.
But it’s not the best for investors or passive owners.
Lastly, S and C corporations are great for avoiding double taxation and for benefiting from tax breaks. This is particularly true if your LLC brings in a lot of money.
Note that C corporations may get double taxed from time to time, and S corporations are not ideal for passive owners or investors.
All in all, you should take your time thinking about the appropriate tax structure for your LLC before finishing the filing process.
As you can see, starting an LLC in Indiana isn’t as complex as you might think. While you need to settle on with some big decisions beforehand – like how your LLC will be organized, its name and its tax structure – you should be able to complete the entire process from start to finish within a week or so. Good luck!