Ohio business entity types and what each one files with the state

What business entity types does Ohio recognize?

Ohio has seven common structures for a business or organization. They differ in three ways that matter most to owners: whether the state has to file something before the entity exists, whether the owners are personally liable for its debts, and whether it has to keep a statutory agent on record.

Fees come from ORC 111.16, and form numbers are the Secretary of State's current ones. Ohio also has a few specialized structures, covered near the end of this page. Where a statutory agent is required, the agent's name and address go on the public record and the agent accepts lawsuits and state notices for the entity. That is the role our Ohio statutory agent service fills for $49 per year.

Sole proprietorship: no state filing to exist

A sole proprietorship is one person doing business without forming an entity. The business and the owner are the same person in law. There is nothing to file with the Secretary of State to start one, and nothing to file each year to keep it.

The one state filing that often applies is the name. If you do business under a name other than your own, Ohio gives you two options under ORC 1329.01:

• Register the name as a trade name, which records your claim to use it.
• File a report of a fictitious name. ORC 1329.01(D) requires a person doing business under a fictitious name they have not registered as a trade name to report it within 30 days after first use.

Either way the state fee is $39. Our Ohio trade name (DBA) service files it. The tradeoff is liability: the owner is personally responsible for every business debt.

Skipping the Secretary of State does not skip everything else. A sole proprietor still registers for the taxes the business owes, such as a vendor's license for taxable retail sales or employer withholding once there is payroll, and still needs whatever local or professional licenses the work requires. The Commercial Activity Tax applies to single owners too, once taxable gross receipts pass $6 million. Many owners start this way and form an LLC once the business has customers, contracts, or employees worth protecting.

Comparing structures? For a side-by-side look, see our guide comparing an Ohio LLC vs. a sole proprietorship.

General partnership: two or more owners, no formation filing

Under ORC 1776.22(A), any association of two or more persons carrying on a business for profit as co-owners forms a partnership, whether or not they intend to. Two people who start doing jobs together and split the money may already be partners. Ohio partnerships are governed by ORC Chapter 1776, and no state filing is needed to create one.

Because the law fills in the terms when the partners have not, put a written partnership agreement in place early: who contributed what, how profits split, who can sign for the business, and what happens when someone leaves. Your attorney can draft it.

The liability rule is the reason most partners eventually form something else. Under ORC 1776.36(A), all partners are liable jointly and severally for all obligations of the partnership, unless the creditor agrees otherwise or the law provides differently. Each partner can be on the hook for the whole debt, not just a share of it. A partner admitted later is not personally liable for partnership obligations incurred before joining (ORC 1776.36(B)).

The optional Statement of Partnership Authority

A partnership can file a Statement of Partnership Authority (Form 535) under ORC 1776.33, which lists the partners or an information agent, the partnership's offices, and its agent for service of process, and can state which partners may transfer real property. The state fee is $99 under ORC 111.16(G). Filing it has a consequence: ORC 1776.07 requires any partnership with an effective statement on file to keep a statutory agent in Ohio continuously.

A general partnership using a name other than the partners' names also handles the trade name or fictitious name filing described above.

Limited partnership: general partners run it, limited partners invest

A limited partnership has at least one general partner who manages the business and one or more limited partners who invest. It is governed by ORC Chapter 1782 and is formed by filing a Certificate of Limited Partnership (Form 531A) for $99 under ORC 111.16(G).

• The certificate lists the partnership's name, its principal place of business, and each general partner's name and address (ORC 1782.08(A)).
• A written appointment of a statutory agent must be filed with it (ORC 1782.08(B)), and every limited partnership must keep an agent in Ohio continuously (ORC 1782.04(A)).
• General partners have the liabilities of partners in a partnership without limited partners (ORC 1782.24(B)).
• A limited partner is not liable for the partnership's obligations unless they are also a general partner or take part in control of the business (ORC 1782.19(A)), and then only to people who dealt with the partnership knowing of that participation.

Limited partnerships show up most in real estate and investment holdings, where one party manages and others contribute capital. The general partner's open-ended liability is why that role is often held by an LLC or corporation instead of a person.

Limited liability partnership: a partnership that elects a liability shield

An LLP is not a new entity. It is a general partnership that has elected limited liability status by filing a Statement of Domestic Qualification (Form 536) with the Secretary of State, for $99 under ORC 111.16(F). The partnership approves the election by the vote needed to amend its partnership agreement (ORC 1776.81(B)).

• Name: must contain an approved designation such as "limited liability partnership," "LLP," "RLLP," or "PLL" (ORC 1776.82(A)).
• Liability: an obligation incurred while the partnership is an LLP is solely the partnership's, and a partner is not personally liable for it just by being a partner (ORC 1776.36(C)).
• Statutory agent: required only if the partnership has no office in Ohio (ORC 1776.81(C)(3)).
• Biennial report: due between April 1 and July 1 of each odd-numbered year after the year the statement is filed (ORC 1776.83(B)), on Form 520 for $25.

Unlike Ohio LLCs and for-profit corporations, an LLP has a recurring report to file. If an LLP misses it, the Secretary of State may revoke its statement of qualification after at least 60 days' written notice. Revocation ends LLP status, not the partnership itself, and the partnership can apply for reinstatement within two years (ORC 1776.83(C) to (F)).

LLC: one flat filing and rules the owners write

A limited liability company is formed under ORC Chapter 1706 by filing Articles of Organization (Form 610) for $99. A member is not liable for the LLC's debts solely by reason of being a member (ORC 1706.26), and the owners set their own rules in an operating agreement that is not filed with the state.

• Owners: one or more members.
• Management: by the members, or by managers if the LLC designates them.
• Default federal taxes: disregarded entity for one member, partnership for two or more, with corporate or S corporation elections available.
• Statutory agent: required at all times (ORC 1706.09).
• Annual report: none in Ohio.

Our step-by-step guide on how to start an LLC in Ohio covers the name rules, Form 610, the EIN, and state tax registrations.

For-profit corporation: shares, a board, and officers

A for-profit corporation is formed under ORC Chapter 1701 by filing Articles of Incorporation (Form 532A). The fee is $99 for up to 990 authorized shares and rises with the share count under ORC 111.16(A). Owners hold shares, a board of at least one director oversees the business, and the corporation must have a president, a secretary, and a treasurer, though one person can hold every office.

Corporations are taxed as C corporations by default and can elect S corporation status if they qualify. Like LLCs, they need a statutory agent and file no Ohio annual report. Our guide on how to incorporate in Ohio walks through shares, directors, and regulations, and our comparison of an Ohio corporation vs. an LLC lays out the tradeoffs.

Nonprofit corporation: formed under Chapter 1702

A nonprofit corporation is formed by filing Articles of Incorporation (Form 532B) for $99. Unlike a business corporation, its articles must state its purpose (ORC 1702.04(A)(3)), and it generally needs at least three directors (ORC 1702.27). It issues no shares.

• Tax exemption is a separate application to the IRS, not part of the state filing.
• Charitable organizations may also need to register with the Ohio Attorney General.
• A Statement of Continued Existence (Form 522, $25) is due within each five years under ORC 1702.59, or the articles are canceled.

Our guide on how to start a nonprofit in Ohio covers each of those steps in order.

Other Ohio structures you may run into

• Professional association: formed on Form 532C ($99).
• Unincorporated nonprofit association: has its own Secretary of State filing, Form 580 ($25).
• Cooperative: formed on Form 600 ($99).
• Business trusts and real estate investment trusts, which have their own Secretary of State filings.

Entities formed in another state that do business in Ohio

Most of the filed entity types above have an out-of-state version. A company formed in Delaware, Indiana, or anywhere else does not re-form in Ohio. It registers here instead, and the Secretary of State has a separate filing for each type:

Registered foreign LLCs and licensed foreign corporations need an Ohio statutory agent just as domestic ones do, even when their home-state registered agent is somewhere else. Our guide to Ohio foreign LLC registration covers when registration is required and how Form 617 works.

How to choose among Ohio business entity types

Start with three questions, then take your answers to an accountant or attorney:

• Do you need protection from business debts? If yes, rule out the sole proprietorship and general partnership. An LLC, a corporation, or an LLP shields its owners, and a limited partnership shields its limited partners but not its general partner.
• Will the business make a profit for its owners, or serve a public or member purpose? A nonprofit corporation is for the second.
• How many owners, and how will they share control? One owner or a few active owners usually fits an LLC. Plans for outside investors or employee equity point toward a corporation.

If you already operate under one structure and want another, you usually do not have to start from scratch. Ohio allows conversions between entity types, with a $99 Secretary of State fee under ORC 111.16(D). Tax effects of a conversion can be significant, so plan it with your accountant before anything is filed.