How to Form a S Corporation in Ohio

In Ohio, you may incorporate a S corporation (S corp) by founding a limited liability company (LLC) or a corporation and then choosing S corp status from the IRS when applying for your EIN.

An S corporation is a tax categorization, not a company structure, according to the IRS. The S corp classification is used to lower a company’s tax burden.

In our How to Start a S Corp in Ohio tutorial, we’ll walk you through the steps.

Considerations Before Forming a S Corp

You must examine the following things before founding a S corporation:

Is a S corporation the best option for your company?
S corporation limitations
Why is an LLC the ideal structure for the S corporation tax status?
Are the tax benefits of a S corporation good for you?

Is a S Corporation the Best Business Structure for You?

Restrictions on S Corporations

S corporations are restricted to one class of stock and 100 stockholders, among other things. For more information, see our What Is a S Corporation? guide.

Why is an LLC the best structure for S Corporation tax status?

As entrepreneurs, we feel that incorporating a S corporation via an LLC is the best option since the benefits of founding a corporation are offset by S corp limitations. LLCs are also less difficult to manage than corporations.

Are S Corporation Tax Benefits Right for You?

You must determine if the S corp tax status is preferable to the default LLC tax status for your company. Read our LLC vs. S corp tutorial to fully grasp the tax benefits of a S corp.

How to Form a S Corporation

There are two major methods to form a S corporation:

When requesting your employee identification number, organize an LLC and obtain S corp tax status from the IRS (EIN)
By creating a company and applying to the IRS for S corp status

We do not advocate forming a company with the S corp tax status since it undermines all of the advantages of forming a corporation.

Forming an LLC and Choosing S Corp Status in Ohio

To form an LLC and elect S corp status, follow these five simple steps:

Step 1: Give Your LLC a Name

Step 2: Select a Registered Agent.

Step 3: Submit the Articles of Incorporation.

Create an Operating Agreement in Step 4

Step 5: Obtain an EIN and submit Form 2553 to elect S Corporation tax status.

Step 1: Give Your LLC a Name

The first and most significant step in forming an LLC in Ohio is deciding on a name.

Make certain that the name you pick conforms with Ohio naming rules and is readily searched by prospective customers.

1. Follow the Ohio LLC naming guidelines:

Your business name must include the word “limited liability company” or one of the following abbreviations: LLC, L.L.C., limited, ltd., or ltd.
Your name cannot include profanity or terms or phrases that are often regarded slurs towards an ethnic group, religion, gender, or heredity.
Your company’s name cannot mistakenly or unfairly indicate that it is associated with a government entity.
Without prior permission from the Superintendent of Financial Institutions, your name cannot contain the terms bank, banker, banking, trust, or words of comparable significance in any other language.
Unless the LLC is registered as a cooperative, your name cannot include the words cooperative, coop, co-operative, or co-op.
Your name must be distinct from any other current company in the state. This lists reserved names in Ohio.

2. Does the name exist in Ohio? Do a company name search on the Ohio Secretary of State’s website to ensure that the name you choose is accessible.

3. Is the URL accessible?

We suggest that you check to see whether your company’s name is accessible as a web domain. Even if you don’t intend to construct a company website right away, you may want to purchase the URL to prevent others from gaining it.

Step 2: Select an Ohio Registered Agent

For your Ohio LLC, you must choose a statutory agent, also known as a registered agent.

A registered agent for your LLC will accept legal papers and tax notifications on your behalf. When you submit your LLC’s Articles of Organization, you will name your registered agent.

Many company owners opt to use the services of a registered agent. Many of these firms will incorporate your LLC for a modest price and provide free registered agent services for the first year.

Consent to Appointment of an Ohio Registered Agent

In Ohio, registered agents must agree to their appointment by signing the LLC Articles of Organization in either physical or electronic form.

Step 3: Submit the Articles of Organization for the Ohio LLC.

To properly register an LLC, the Ohio Articles of Organization are utilized.

Step 4: Draft an Operating Agreement for your LLC.

An LLC operating agreement is a legal document that defines your LLC’s ownership and member responsibilities.

Step 5: Apply for an EIN and fill out Form 2553 on the IRS website.

An EIN is a number assigned by the US Internal Revenue Service (IRS) to companies in order to identify and tax them. It is basically a business’s Social Security number.

When you apply directly with the IRS, EINs are free.

Select S Corporation Tax Status
The IRS will give a link to Form 2553, the Election by a Small Business form, during the online EIN application process.

For full assistance with completing the form, please see our Form 2553 Instructions page.