How to Start a Business in Indiana

In the US, Indiana is considered one of the topmost states in the midwest and the fifth-best for doing business. In 2022, about 534,640 (99.4%) of the establishments in Indiana were small businesses. These small businesses employed about 1.2 million (43.8%) employees. The real gross domestic product (GDP) of Indiana increased at an annual rate of 1.9% in 2022, and that same year, personal income grew at an annual rate of 2.9%. 

As of August 2023, over 1.8 million businesses were on record with the Indiana Secretary of State (SOS). The following is a breakdown of:

Interested members of the public can find information on these businesses online via the SOS Business Search tool. The search criteria are by business name, business ID, filing number, registered agent name, or incorporator or governing person name. Between January and June 2023, about 49,783 businesses were formed and registered with the SOS through INBiz. That same year, the SOS closed about 6,192 enterprises online. All companies in the state must comply with the provisions of the Indiana Business Code

To start a business in Indiana, prospective business owners must follow these steps:

Step 1: What Kind of Business Should I Start in Indiana?

New entrepreneurs might find it challenging to decide which kind of business to start or how to start a business in Indiana because of the complexities involved. The right business to do depends on several factors like location, budget, scalability, market size and demand, and interests. Hence, market research is the best way to decide what business idea to explore.

How to Do Market Research

Market research is a technique companies use to collect information about their target audience when considering a specific business idea. With market research, business owners can understand their target customer’s problems and desired solutions so they can create products to fit their needs. Market research is also essential for identifying low-hanging fruit in the sector to ensure their own business stands out. The two main ways to gather information during market research are:

Step 2: How to Write a Business Plan

A business plan is a written document that acts as a blueprint for a business idea. Large-scale, medium, and small business owners use business plans to guide each stage of starting and managing their businesses. Business plans are commonly categorized into traditional or lean startup business plans. A formal business plan requires providing detailed information in each section. In contrast, a lean startup business plan summarizes only key elements in each section. This is a typical example of the components of a lean business plan:

Step 3: Do I Need a Business License in Indiana?

Indiana does not have a single, comprehensive license for all businesses operating in the state. However, many companies may be subject to regulatory requirements involving several state agencies. The Indiana Department of Business and Neighborhood Services provides a list of business licenses for entities in the City of Indianapolis. Individuals can also review the Business Owner’s Guide for specific permits that may be required for their companies. 

How Much Does a Business License Cost in Indiana?

There is no standard fee for business licenses in Indiana because no ONE license covers all businesses in the state. Therefore, the cost of a business license varies by profession and business type. For example, a dental license costs $250, while a massage therapy license costs $100. 

How to Register for a Sellers Permit in Indiana 

A seller’s permit is also called a sales tax in Indiana. The Indiana Department of Revenue (DOR) requires all businesses that sell goods or tangible personal property to register for a sales tax. The tax rate is 7%. Registration can be done online through INBiz. Here is how to register for a seller permit in Indiana:

Registration for a seller’s permit costs $25; an application and a separate $25 fee may be required for each location. Once the registration is completed and processed, the DOR will issue the seller a Registered Retail Merchant Certificate (RRMC). The certificate must be displayed at the business location. The validity of the RRMC is two years, with automatic renewals at no cost. The RRMC only expires when the business refuses to pay tax. 

Step 4: How Much Does it Cost to Start a Business in Indiana? 

According to the U.S. Small Business Administration (SBA) report, most microbusinesses cost about $3,000 to start, while most home-based franchises cost between $2,000 and $5,000. The SBA provides a startup worksheet for new entrepreneurs to calculate their startup costs. The cost of starting a business in Indiana varies depending on factors like business structure, type, location, number of employees, and operation. For example, a Limited Liability Company (LLC) must pay the following fees while registering with the Indiana Secretary of State (SOS):

Other factors that also impact start-up costs include professional services and coverages like professional liability insurance and commercial property insurance (where it is a brick-and-mortar business), general liability insurance, and personal liability protection where applicable.

How to Get Business Funding in Indiana 

Business funding refers to how an establishment can raise capital to finance its operations, growth, and expansion. Most businesses get funds through the following means:

How to Self-Fund a Business in Indiana 

Self-funding is also known as bootstrapping. It is a process by which business owners use their own money to finance their businesses. Individuals can self-fund their businesses by collecting capital from family and friends for capital, using their savings accounts, or even tapping into their 401(k) to fund their business bank account. Self-funding allows business owners to retain complete control over their businesses, but they also take on all the risk themselves. Speaking with a financial advisor before tapping into personal funds is advisable. 

How to Find Investors in Indiana 

Finding investors in Indiana can be very tasking but is crucial for the success of a business. Here are ways many business owners find investors for a running business or a business idea:

How to Get a Loan to Start a Business in Indiana 

Entrepreneurs can get business loans from several state and federal organizations. For example, The U.S. Small Business Administration (SBA) offers several loan programs to small businesses in Indiana. The federal government backs SBA loans which usually has lower interest rates and longer repayment terms than other loan types. Some examples of SBA loans available to small businesses in Indiana are:

Business owners can also get loans through the State Small Business Credit Initiative (SSBCI) introduced by the Indiana Economic Development Corporation (IEDC) 

How to Find Indiana Business Grants

A business grant is “free money” given by foundations, governments, corporations, or trusts that do not have to be paid back. Business owners may be eligible for grants to help grow their businesses. Individuals can find business grants on the websites of the following organizations:

Can I Start a Business with No Money in Indiana?

It may be possible to start sole proprietorships and general partnerships with little or no money. However, limited liability companies (LLC), limited partnerships, and corporations cost money because certain formation documents must be filed with the Indiana Secretary of State (SOS). Filing entities can reduce costs if they file their documents online. For example, businesses that file their Business Entity Reports by mail or in person must pay a $30 filing fee, but online filers pay $22.44.

Step 5: Choosing a Business Structure in Indiana 

A critical step in starting an enterprise in Indiana is deciding which business structure best meets a person’s business goals. A business structure determines how a business will be formed, how much liability the business owners will be exposed to, how much taxes to pay, and how much control of the organization the business owner will have. The types of business structures available in Indiana are: 

How to Start a Sole Proprietorship in Indiana 

A sole proprietorship is a business structure in which a single person owns and runs business activities. The business does not exist separately from the owner (sole proprietor). The sole proprietor assumes complete responsibility for all debts and liabilities of the company. Unlike other business structures, sole proprietorships do not need to register their businesses with the Indiana Secretary of State (SOS). However, they must submit a business tax application with the Indiana Department of Revenue (DOR) if they sell products or tangible items, tires, fireworks, food, and beverages, rent accommodations for less than 30 days, rent motor vehicles, or have employees. Sole proprietors who want to conduct business under a name other than their name must file an assumed name with the Recorder in the county where they are situated. 

How to Start a Corporation in Indiana

A corporation is a business structure incorporated under the Indiana Business Corporation Law. It is a legal entity separate and distinct from its owners. Per IC 23-0.5-3-2, a corporation’s name must have the word “corporation,” “company,” “incorporated,” or “limited,” or the abbreviation “Co.”, “Corp.”, “Inc.” or “Ltd.” the name of a professional corporation must contain the words “Professional Corporation” or “Professional Service Corporation” or abbreviations of these words. There are two types of corporations in Indiana: 

Individuals can set up a corporation in Indiana by filing formation paperwork with the Indiana Secretary of State (SOS). Domestic for-profit corporations and professional corporations must submit Articles of Incorporation Domestic Corporation (Form 4159) – Domestic For-Profit Corporations and Professional Corporations, which costs $100. In contrast, foreign for-profit corporations must file a Foreign Registration Statement (Form 56369), which costs $125. These forms can be filed online, by mail, or in person. The filing fee can be made by credit card, cash, check, or money order, depending on the filing method. In-person applications are by appointment. The SOS office is usually open from 8:00 a.m. to 5:00 p.m. (except state holidays), Monday through Friday. 

How to Start an LLC in Indiana 

A limited liability company (LLC) is a business structure that combines the benefits of the limited liability of a corporation and the flexibility and single taxation of a general partnership. LLCs have members, not shareholders. Per IC 23-18-6-0.5, the minimum membership of an LLC is one member. LLC members are not personally liable for the company’s liabilities and debts. Eligible LLCs can be taxed once (like a partnership) at the employee or member level. Per IC 23-0.5-3-2(d), an LLC’s name must have the phrase “limited liability company” or be abbreviated as “LLC” or “LLC.” A master limited liability company’s name must comply with IC 23-18.1-6-7(b), while that of a series with limited liability must comply with IC 23-18.1-6-7(c) and IC 23-18.1-6-7(d).

A business owner can form an LLC online, by mail, or in person at the Indiana Secretary of State’s office. Domestic applicants must file Articles of Organization (Form 49459), while foreign applicants must submit a Foreign Registration Statement (Form 56369). The filing fee for Form 49459 is $100, while that for Form 56369 is $125. Depending on the filing method, payment can be made by check, money order, credit card, or cash. To form an LLC online, the applicant must create an INBiz account and log in with an email and secured password. They must then go to the Online Services menu and select “Start a Business.” Select a business entity click on the Continue box, and follow the prompts. Upon submitting the application, the SOS will review the submission and notify the applicant via email of the next steps.

How to Start a Business Partnership in Indiana 

Per IC 23-4-1-6, a partnership is a business structure that involves two or more persons co-owning a business for profit. All registered partnerships in Indiana must comply with the provisions stated in the Uniform Partnership Act. Below are the types of business partnerships available in Indiana:

The filing fee for domestic forms is $100, while foreign forms cost $125. Payment can be made by check, money order, credit card, or cash, depending on the filing method.

How to Start a Non-Profit in Indiana 

A nonprofit corporation is an entity that engages in activities that do not financially benefit its members. Nonprofits operating in Indiana must be organized in compliance with IC 23-17. Individuals who want to create a nonprofit corporation in Indiana must file Articles of Incorporation Domestic Non-profit Corporation (Form 4162) with the Indiana Secretary of State. Foreign applicants must file Foreign Registration Statement (Form 56369). The filing fee for Articles of Incorporation is $50, while Foreign Registration Statement filings cost $75. Applications can be made online, by mail, or in person at: 

Indiana Secretary of State Business Services Division

302 W. Washington Street

Room E018

Indianapolis, IN 46204

Phone: (317) 234-9768

Nonprofits must apply for tax-exempt status with the Internal Revenue Service (IRS) and file with the Indiana Department of Revenue (DOR) to be free from certain tax obligations.

Step 6: Choosing a Business Location in Indiana 

Choosing a business location is a critical step to starting a business in Indiana. According to the U.S. Small Business Administration (SBA), a business location determines the regulations, state and local taxes, government incentives, and local zoning laws a business will be subject to. The cost of starting a business in Indiana varies significantly by location. For example, the cost of property in the neighborhood, business licenses, business insurance rates, the cost to source hire employees, rental rates, utilities, and other professional services may vary depending on where the business is located. 

What Kind of Business Can I Run From Home in Indiana?

A home occupation is a business, profession, or activity conducted in a dwelling unit with the intention of making a profit. The home occupations that are permitted in Indiana dwelling units vary by city/county. However, the following uses qualify as permitted home occupations in most cities/counties:  

The uses specified below are not permitted as home occupations in Indiana:

How Do I Start A Small Business From Home in Indiana 

Indiana law permits residents to run businesses from their homes. Interested persons must apply for permits at the Department of Planning and Development (this can go by a different name in other cities/counties) to be able to conduct home occupations in their cities/counties. Activities of the home occupation must be in compliance with the provisions of the city/county zoning ordinances. The standards for home-based businesses in Indiana are: 

Starting a Business Online in Indiana 

An online business is a business where buying and selling takes place remotely. Individuals who want to run their online businesses from home must obtain a permit from their City/County Department of Planning and Development. Specific online businesses may have to obtain business and professional licenses from different licensing agencies in Indiana. For example, anyone or entity selling beer, wine, or liquor for consumption online must obtain a business license from the Alcohol Tobacco Commission. Remote businesses that are limited liability companies (LLCs), partnerships, and corporations must be registered with the Indiana Secretary of State. Some online businesses may have to apply for business taxes online on the Indiana Department of Revenue (DOR) website. Per IC 6-2.5-2-1(d), remote sellers must obtain a registered retail merchant’s certificate and collect and remit applicable sales tax if their gross revenue from sales into Indiana exceeds $100,000 and/or have 200 or more separate transactions in the state.

Entrepreneurs who want to conduct business in Indiana must meet the following legal requirements:

How to Get an EIN Number in Indiana 

The Indiana Department of Revenue (DOR) requires all entities to have an Employer Identification Number (EIN) before they can apply for business taxes in the state. The Internal Revenue Service (IRS) is responsible for issuing EINs to Indiana businesses. Business owners can apply for EIN online, by fax, or by mail. Fax and mail applicants must submit Form SS-4 to the appropriate fax number or mailing address: 

(For US applications)

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

(For applicants with no legal residence or place of business in the US)

Internal Revenue Service

Attn: EIN International Operation

Cincinnati, OH 45999

Fax: (855) 215-1627 (within the US.)

Fax: (304) 707-9471 (outside the US.)

Non-US applicants can obtain EIN by telephone at (267) 941-1099. All calls must be made Monday through Friday from 6 a.m. to 11 p.m. (Eastern Time). 

How to Get an Indiana Registered Agent 

Per IC 23-0.5-4-1, all domestic and foreign businesses transacting in the state must maintain a registered agent in Indiana. The primary function of a registered agent is to receive vital legal and tax documents (like service of process, notice, or demand) on behalf of a business. The agent can be an Indiana resident, a domestic filing company, a general partnership, or a registered foreign entity (IC 23-0.5-4-3). The registered agent must have a registered office in Indiana which should be a physical address and not a post office box number, except a rural route number is part of the address. Business owners can get registered agents online via third-party platforms. After deciding on the registered agent to work with, the business owner must include the agent’s name and address in the formation paperwork while registering their company with the Indiana Secretary of State (SOS). The typical cost range for a registered agent service is between $100 and $300 annually.

Patents, Trademarks, and Copyrights in Indiana 

Patents, trademarks, and copyrights are intellectual properties that protect a person’s original work. Patents protect people’s inventions and improvements to them. Copyrights protect literary, artistic, and musical works. Trademarks protect brand names and/or designs that are related to products or services. Copyrights and Patents are governed only by federal laws, while state and federal laws govern trademarks. 

A trademark is any symbol, word, phrase, or device a person uses to identify and distinguish their products from those of others. The Indiana Secretary of State (SOS) maintains a searchable database of trademarks registered in the state. Individuals should use this search tool to check for the availability of their trademarks before registering for one. Applications for a trademark can be made online through the INBiz. Trademarks are effective for just five (5) years and can be renewed six (6) months before the expiry date. The SOS will notify the registrants of pending expiration at least six months before the expiry date. Applicants must attach one specimen that reveals the actual use of the mark and one drawing specimen revealing the design elements of the mark (if the trademark carries a design). The application fee of $10. Also, business owners must determine if the trademark is already used in other states. Use the USPTO Trademark Electronic Search System (“TESS”) to check if a trademark is available nationwide. 

Businesses can register for patents online on the USPTO website. Copyrights can be registered online or by mail at the United States Copyright Office. Registration involves:

Mail applicants must send the required forms to:

US Copyright Office

Library of Congress 

Copyright Office-TX 

101 Independence Avenue SE 

Washington, DC 20559-6000

Indiana Business Tax

Indiana Department of Revenue requires all entities conducting business in the state to pay taxes. Depending on the nature of the business, business owners may need to file several different types of taxes. Examples of taxes available to businesses in Indiana are:

Are Business Records Public in Indiana?

Yes, The Access to Public Records Act (APRA) provides that anyone can access business records maintained by any public agency. Therefore, individuals can request to view or obtain copies of business records online or in person at the Indiana Secretary of State’s office. Online requests can be made via the SOS Business Search tool. The search criteria are by business name, business ID, filing number, registered agent name, or incorporator or governing person name. The search results typically reveal the business’ name, ID, name type, entity type, principal office address, registered agent name, and status. Per IC 5-14-3-4, certain business records may not be available to the public. Confidential business records include trade secrets information and employees’ Social Security numbers, telephone numbers, email addresses, and dates of birth.