How to Start an LLC In Indiana
Indiana is considered one of the best states in the US for doing business. It is the top state in the Midwest and the fifth-best in the country. There are 458,674 active limited liability companies (LLCs) registered with the Indiana Secretary of State (SOS). Specifically, 416,161 domestic LLCs, 1639 domestic master LLCs, 40,811 foreign LLCs, and 63 foreign master LLCs. Interested persons can find information on these LLCs by conducting a lookup via the SOS Business Search tool. The search criteria include the business name, business ID, filing number, registered agent name, or incorporator or governing person name.
Between January and June 2023, approximately 43,167 LLCs were formed and registered with the SOS through INBiz. Specifically, 40,838 Domestic Limited Liability Companies, 59 Domestic Master LLC, and 2,270 Foreign Limited Liability Company registered online with the SOS. That same year, the SOS closed about 4,653 LLCs online.
All LLCs in the state are required to comply with the provisions of the Indiana Business Flexibility Act. To start an LLC in Indiana, prospective business owners must follow these steps:
- Step 1: Choose a business name: The SOS requires all intending LLCs to select a business name that is distinguishable from the names of other existing businesses.
- Step 2: Choose a registered agent: All LLCs must continuously maintain an Indiana registered agent and office. This registered agent is responsible for receiving important legal and tax documents on behalf of the LLC.
- Step 3: File the necessary paperwork: Domestic LLCs must file Articles of Organization with the SOS, while foreign LLCs must file Foreign Registration Statements.
- Step 4: Get an Employer Identification Number (EIN): An EIN is the corporate equivalent of a Social Security Number used by the Internal Revenue Service (IRS) for identification purposes. All LLCs in Indiana must obtain an EIN to conduct business in the state.
- Step 5: Obtain business license/permit: There is no general business license for all LLCs in Indiana. However, LLCs may need specific licenses depending on their business type, location, and specifications.
- Step 6: Submit local filings: All business owners must file annual paperwork with the county assessor’s office within their business location.
What is an LLC?
An LLC is a business structure that combines the advantage of the limited liability of a corporation and the flexibility and single taxation of a general partnership. LLCs do not have shareholders but members. Per IC 23-18-6-0.5, the minimum membership of an LLC is one member. None of the members of an LLC are personally liable for its liabilities and debts. Eligible LLCs can be taxed once (like a partnership) at the member or employee member level without facing the restrictions common with S-Corporations.
Step 1: Indiana LLC Name Search
Indiana Law requires names of new LLCs to be distinguishable from those of existing LLCs on the Secretary of State’s records. Potential entrepreneurs who want to determine if their preferred business name is available must conduct a name availability check. This can be done online via the Check Name Availability search tool or by calling (317) 232-6576. However, the search tool can only be used for preliminary searches. Therefore, users should not assume that their desired name is available until the final processing is completed at the time of filing. If the searched name is available, the requester may reserve the name for 120 days ( for a $20.00 fee) or file appropriate forms to create a business under that name.
Per IC 23-0.5-3-2(d), the name of a limited liability company 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).
Step 2: Choosing an LLC Registered Agent in Indiana
Per IC 23-0.5-4-1, all domestic and foreign LLCs must maintain a registered agent in Indiana. The primary role of the registered agent is to receive important legal and tax documents on behalf of an LLC, including service of process, notice, or demand. The requirements for choosing a Registered Agent in Indiana are as follows:
- The registered agent must be a person, a domestic filing entity, a general partnership, or a registered foreign entity (IC 23-0.5-4-3)
- The registered agent must have a registered office in Indiana.
- A business entity cannot be its own registered agent.
- The address of a registered agent cannot be a post office box number, except a rural route number is part of the address.
- The business owner must include the registered agent’s name and address in the formation paperwork while registering the LLC.
- The filing of a registered agent with the SOS must state the registered agent’s consent or a representation that the registered agent has consented (IC 23-0.5-4-3)
In Indiana, registered agent information is public record. Interested persons can find details about a registered agent representing an LLC online through the SOS Business Search tool. The registered agent’s name and principal office address will be available publicly, and a registered agent can choose to resign from representing an LLC in Indiana. The registered agent must file a Statement of Resignation of Registered Agent (Form 26285) online, by mail, or in person at the SOS office.
How Do I Change my Registered Agent for my LLC in Indiana?
LLCs who want to change their registered agents can do so online or submit a Statement of Change of Registered Agent (Form 56367) to the Indiana Secretary of State Business Division. There is no fee for filing this form. This form can be submitted online, by mail, or in person. Commercial and non-commercial registered agents who want to change their names, address, or email address on file with the SOS must file the following forms:
- Registered Agent Statement of Change by a Commercial Registered Agent (Form 56368)
- Registered Agent Statement of Change by a Non-commercial Registered Agent (Form 56373)
Step 3: LLC Filing Requirements in Indiana
The Indiana Secretary of State (SOS) has specific filing requirements to that must be met before any LLC registration can be approved. These filling requirements are:
- LLC articles of organization: The SOS requires all business owners to file articles of organization to conduct business in Indiana. Per IC 23-18-2-4, the articles of organization must contain the following information:
- The name of the LLC must contain the phrase “limited liability company” or be abbreviated as “LLC” or “LLC.”
- A statement regarding provisions for manager (s), if any
- The LLC’s dissolution date or a statement that the LLC is perpetual until a certain period
- The street address of the LLC’s registered office in Indiana and the name of the LLC’s registered agent at that office
- Any other information the LLC members choose to include.
- LLC operating agreement: Per IC 23-18-4-5, LLC members can enter into an operating agreement to regulate or establish any aspect of the business affairs. An operating agreement is any written or oral agreement of the members regarding the affairs of an LLC and the conduct of its business that is binding upon all the members (IC 23-18-1-16)
- Age requirements: Indiana law has no age restrictions for forming an LLC in the state. However, there are certain occupations prohibited for minors in Indiana. Review the Prohibited and Hazardous Occupations for Minors page on the Indiana Department of Labor website for more information on jobs minors should not undertake within an LLC.
Do You Need an Indiana Address for an LLC?
The Indiana Secretary of State (SOS) requires all LLCs operating in the state to have a designated street address, regardless of whether the business is run from an office building or home. All business owners must maintain a registered office in Indiana to be able to register their LLCs with the SOS. The street address of the LLC’s registered office must be included in the formation paperwork before their registration is approved.
How to Get a Virtual Address for an LLC in Indiana
Small businesses that do not have commercial office space usually use virtual addresses to receive business mail and packages. A virtual address is an actual street address that an LLC can use as its virtual mailbox. Several third-party vendors provide virtual addresses for businesses in Indiana, and interested persons can use a search engine to find these vendors. Virtual address providers have different pricing models depending on how much mail the LLC receives. Compare pricing from at least three providers before settling for one. Opt for a virtual address package that fits the needs of the LLC.
How to File for an LLC in Indiana
Individuals can file for an LLC (domestic or foreign) online, by mail, or in person at the Indiana Secretary of State’s office. Mail applicants can send an Articles of Organization (for domestic LLCs) or Foreign Registration Statement (for foreign LLCs) to:
Indiana Secretary of State Business Services Division
302 W. Washington Street
Room E018
Indianapolis, IN 46204
Phone: (317) 234-9768
In-person applications are strictly by appointment. The office is usually open between 8:00 a.m. and 5:00 p.m., Monday through Friday (except state holidays).
The filing fee for Articles of Organization is $100, while that for Foreign Registration Statement is $125. Payments can be made by check, money order, credit card, or cash, depending on the filing method.
How to Create an LLC Online in Indiana
Indiana allows individuals to create an LLC online using the INBiz tool. Users with the required information may create an LLC within 15 minutes using this tool. Here is how to form an LLC online in Indiana:
- Create an INBiz account and log in with an email and secured password.
- Select Start a Business from the Online Services menu or the quick link on the home page.
- Select a business entity and click on the Continue box.
- Complete the following sections:
- Business Information
- Registered agent information
- Governing person information
- Attachments
- Review
- Signature
- Payment
Upon applying, the Secretary of State will review the submission and notify the applicant via email of the next steps.
Can You Have Multiple Businesses Under One LLC in Indiana?
Yes, a business owner can have multiple businesses under one LLC in Indiana. This is commonly known as series limited liability companies. All the operations of a series LLC in Indiana must comply with the provisions outlined in IC 23-18.1. Domestic business owners can form series LLC by filing Articles of Organization Domestic Master Limited Liability Company (Form 56269) online, by mail, or in person with the Indiana Secretary of State (SOS). The filing fee is $250, payable by cash, credit card, check, or money order. Foreign business owners must file a Foreign Registration Statement (Form 56369) to establish a series LLC in Indiana. The filing fee is $125.
How Long Does it Take to Set Up an LLC in Indiana?
The fastest way to file formation paperwork in Indiana is online. Online filing of formation documents takes about 15 minutes if the filer has all the required information. It takes between 2 and 3 weeks to form a limited liability company in Indiana by mail. In-person applicants should expect the same delivery turnabout as mail applicants.
Step 5: How to Get an EIN for an LLC in Indiana
An Employer Identification Number (EIN) is a nine-digit number that IRS assigns to identify business tax accounts. LLCs must use their EINs on all forms they send to the IRS and the Social Security Administration (SSA).
Individuals can get an Employer Identification Number (EIN) for LLCs from the Internal Revenue Service (IRS). The application for an EIN can be made for free online, by fax, or by mail. Most business owners prefer to use the online method to apply for EIN. Upon completing the application, the EIN will validate the provided information and issue an EIN immediately. Mail and fax applicants must submit an Application for Employer Identification Number (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.)
Fax applications are usually processed within four (4) business days, while EIN application received by mail is processed within four weeks.
International applicants can get EIN for their LLCs by telephone at (267) 941-1099. All calls must be made between 6 a.m. and 11 p.m. (Eastern Time) Monday through Friday. Only individuals authorized to receive the EIN and answer questions concerning the Form SS-4 must request the EIN by phone. Business owners can complete the Third Party Designee section if they want to authorize the named individual to receive their EINs and answer questions about completing the form. Review the IRS’ Employer Identification Numbers (EINs) Publication for more information on how to get EIN in Indiana.
Step 6: Do LLCs Pay Taxes in Indiana?
Indiana law requires all LLCs to pay taxes after registering their business with the Secretary of State. LLCs are required to pay state and local income taxes (IC 6-3 and IC 6-3.6) on any profits earned in Indiana. Also, LLCs must pay sales tax on tangible property sold or shipped from the state. All businesses with employees must adhere to Indiana’s employment tax requirements. Some LLCs may be subject to other taxes like income or withholding taxes. Review the Indiana Tax Handbook for New & Small Business Owners for more information on LLC tax requirements in the state.
How Are LLCs Taxed in Indiana?
The Indiana Department of Revenue (DOR) taxes LLCs based on their income, what they sell, and if they have employees. For example, LLCs who sell goods or tangible personal property in Indiana must register for sales tax. The tax rate is 7%. Once the registration is completed and processed, the DOR will issue a Registered Retail Merchant Certificate (RRMC) to the LLC. This certificate must be displayed at the business location. LLC members must pay Indiana’s individual income tax of 3.23%. Each member must file Form IT-40 to report their portion of LLC income. The members would have to pay their portion of the 4.9% corporate income tax by filing Form IT-20 if the LLC has elected to be taxed as a C-corp.
Tax Benefits of an LLC in Indiana
The following are the tax benefits of an LLC in Indiana:
- Flexibility: The taxation process of Indiana LLCs is very flexible. An LLC can be taxed as a sole proprietor, partnership, C corporation, or an S corporation. This flexibility allows business owners to choose the most beneficial tax approach for their LLCs.
- Avoiding double taxation: LLCs who elect to be taxed as sole proprietorships or partnerships tend to avoid double taxation. Double taxation occurs when a company pays taxes on its business income, and the shareholders also pay taxes on their personal dividends. LLCs who do not elect to be taxed as a corporation will only be taxed once.
Do You Have to Renew LLC Every Year in Indiana?
Indiana Secretary of State (SOS) does not require business owners to renew their LLCs yearly. However, LLCs must file business entity reports biennially. The filings are due during the anniversary month of the LLC’s formation or when the business owner was granted authority to do business in the state. Typically, the SOS will send a reminder notice the month the report is due. The business entity report can be filed online, by mail, or in person at the SOS Business Services Division. Mail and in-person applicants must be willing to complete a Business Entity Report (Form 48725). The filing fee is $50, payable by credit card, check, money order, or cash.
Additionally, Indiana requires all LLCs to file business personal property annually with the county assessor’s office within the community they operate their business. Filings can be done via the Personal Property Online Portal (PPOP-IN) or by mail by submitting the required forms. LLCs whose business personal property costs do not exceed $80,000 can file for a business personal property exemption.
How Much Does It Cost To Start an LLC in Indiana
LLC owners must pay specific fees to be able to conduct business in Indiana. Below is the breakdown of the expenses likely to be accrued while filing an LLC in Indiana:
- Filing fees: The Indiana Secretary of State (SOS) charges $100 for filing Articles of organization. Foreign LLCs must pay $125 for filing a foreign registration statement with the SOS.
- Business entity report: LLC owners must file business entity reports with the SOS biennially. The filing fee is $50.
- Registered agent fees: Indiana law requires all LLCs conducting business in the state to maintain registered agents. The major role of a registered agent is to receive important legal and tax documents on behalf of an LLC, including service of process, notice, or demand. The cost to hire a registered agent is between $50 and $100 per year.
- Business license fees: Indiana does not have a single business license for all LLCs conducting business in the state. However, LLCs must apply for specific licensing depending on their business type. For example, an LLC that sell, lease, or install alarm systems in the city of Indianapolis must have an Alarm Company license, which costs $250. Any LLC that provides lodging for profit, either regularly or occasionally, must carry a Hotel/Motel License, which costs $291.
- Sales tax: The Indiana Department of Revenue requires all LLCs who sell goods or tangible personal property in Indiana to register for sales tax. Registration for sales tax costs $25, and a separate $25 fee is required for each business location.
- Optional fees: There are some optional fees a business owner may have to pay while trying to create an LLC in Indiana. These fees are:
- Name reservation: Most business owners reserve the name they wish to use for their LLCs if they are not ready to register them. This name reservation costs $20 in Indiana, and the name will be reserved for 120 days.
- Assumed name: LLCs who want to register their company under a name that is not their legal name can file a Certificate of Assumed Business Name (Form 30353) with the SOS. This form costs $30 per name.
- Articles of amendment: Domestic LLCs can amend information in their articles of organization by filing Articles of Amendment with the SOS. The filing fee is $30. Foreign LLCs would have to file a Foreign Registration Amendment, which also costs $30.
Can You Form an LLC In Indiana For Free?
No, but individuals can cut costs by filing appropriate documents with the Indiana Secretary of State (SOS) online. For example, LLCs who file their Business Entity Reports by mail or in person must pay a $30 filing fee, but online filers pay $22.44. Contact the SOS for more information about forming an LLC in Indiana for free.
How to Start an LLC in Indiana for Free/At Minimal Cost
The Indiana Secretary of State (SOS) does not provide possible options for filing an LLC at no cost. However, business owners can complete the process at a minimal cost by filing the necessary documents online. Also, business owners should avoid reserving a name for their LLC to reduce costs. They can go ahead to register their LLC If the name they intend to use is available. Another way to cut costs is to ensure all the information provided on the Articles of Organization or Foreign Registration Statement is correct to avoid filing amendment forms.
What Businesses Should Consider Forming an LLC in Indiana?
According to the U.S. Small Business Administration (SBA), an LLC is a good choice for medium- or higher-risk businesses. Also, business owners with significant personal assets that require protection or owners who want a lower tax rate can consider forming an LLC in Indiana.
What are the Benefits of An LLC in Indiana
There are several structures to choose from when conducting business in Indiana. However, business owners opt for LLC due to the following benefits:
- Separate legal identity: An LLC is separate from its members. Therefore, the company has its own rights, liabilities, and responsibilities. A lawsuit can be filed in the name of the LLC. The company can also lend money, make its own contracts, invest funds, and own real or personal properties.
- Limited liability: LLC members enjoy limited liability because the company is a separate entity. This means that the individual assets of the members cannot be used to satisfy the company’s debt and obligations. Members can only make losses on the amount they invest in the LLC.
- Perpetual existence: An LLC has perpetual existence unless the written operating agreement states otherwise. This means the company will continue to exist regardless of what happens to a member. A member’s retirement, death, or withdrawal from the LLC cannot trigger the dissolution of the company.
- Flexible management structure: LLCs are flexible such that members have many options for the management structure. Per IC 23-18-4-1, LLC members are responsible for managing business affairs. However, this control can rest on managers who can be members or non-members if the written operating agreement and/or its articles of the organization state so.
- Pass-through taxation: An LLC’s profits, losses, deductions, credits, and income flow through to the members. These members pay personal income taxes on their share of the business. The LLC does not pay tax at the entity-level taxation except if it chooses to be taxed as a C corporation.
How Does an LLC Work in Indiana
Per IC 23-18-2-4, An individual can form a limited liability company (LLC) by causing articles of organization to be filed with the Indiana Secretary of State (SOS). Articles of organization of an LLC may be amended by filing Articles of Amendment (for domestic LLCs) or Foreign Registration Amendment (for foreign LLCs) with the SOS. Per IC 23-18-4-8, an LLC must keep the following records and information at its principal office:
- A copy of the articles of organization and all amendments
- Copies of any written operating agreements and all amendments and copies of any written operating agreements are no longer in effect
- A list with the full name and last known mailing address of each member and manager of the LLC from the date of organization
- Copies of the LLC’s income tax returns and financial statements for the three (3) most recent years
Per IC 23-18-6-6.1, a member cannot withdraw from an LLC before its dissolution unless the written operating agreement states otherwise. To dissolve an LLC, members must file articles of dissolution with the SOS. Upon dissolution, the LLC’s assets must be distributed to creditors and members unless otherwise provided in a written operating agreement.
LLC vs. S Corp in Indiana
An LLC is a business structure, while an S-corporation is a tax classification available to eligible businesses. LLCs can have unlimited members, while the shareholders of S corps cannot exceed 100. Non-U.S. citizens/residents can be LLC members, while S corps’ shareholders must be US citizens/residents. Individuals must file the appropriate paperwork with the Indiana Secretary of State (SOS) to create an LLC in Indiana. In contrast, an Election by a Small Business Corporation (Form 2553) must be filed with the Internal Revenue Service (IRS) to become an S corporation. S corporation owners can only be individuals, certain trusts, and estates but cannot be owned by corporations and partnerships. In contrast, LLCs can be owned by a C corporation or a partnership.
LLC vs. Sole Proprietorship in Indiana
LLCs and sole proprietorships are two of Indiana’s most common business structures for individuals and small businesses. An LLC exists separately from its owners (called members). These members are not personally responsible for business debts and liabilities. In contrast, a sole proprietorship is a business owned and run by one person (called a sole proprietor).
The sole proprietor assumes responsibility for profits, debts, and liabilities. Business owners must file paperwork with the Indiana Secretary of State to form an LLC. Conversely, sole proprietorships do not face the exact requirements. However, sole proprietors who want to conduct business under a name other than their name must file an assumed name with their County Recorder. An LLC can be taxed as a sole proprietorship, a partnership, or a corporation, but a sole proprietorship does not enjoy such flexibility.
LLC vs. Corporation in Indiana
An LLC and a corporation are two different business structures with their own strengths and weaknesses. Owners of an LLC are called members, while owners of a corporation are called shareholders. Generally, corporations have more stringent reporting and recordkeeping obligations and more standardized and rigid operating structures. Than LLCs. LLC owners operate their businesses with more flexibility. The two types of LLCs in Indiana are single-member LLCs and multi-member LLCs. In contrast, a corporation is divided into for-profit corporations, nonprofit corporations, and professional corporations.
Per IC 23-0.5-3-2, an LLC’s name in Indiana must contain the phrase “limited liability company” or the abbreviation “LLC” or “LLC.” Conversely, 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. LLCs are required to file Articles of Organization (for domestic LLCs) or Foreign Registration Statement (for foreign LLCs) with the Indiana SOS. In contrast, corporations are required to file the following paperwork with the SOS depending on their types:
- Articles of Incorporation (Form 4159) – For-Profit Corporations (Domestic) and professional corporation
- Foreign Registration Statement (Form 56369) – For-Profit Corporations (Foreign)
- Articles of Incorporation (Form 4162) – Non-Profit Corporations (Domestic)
- Foreign Registration Statement (Form 56369) – Non-Profit Corporations (Foreign)
Corporations undergo double taxation. They are usually taxed at the corporate and employee levels when a wage is paid or at the shareholder level when distributed as a dividend. Eligible corporations can elect to become S-corporations to avoid double taxation. In contrast, LLCs do not have an IRS tax classification. Single-member LLCs are usually taxed like sole proprietorships, and multi-member LLCs are taxed like partnerships. In either case, business profits and losses pass through to the members, who pay personal income taxes.
Business License vs. LLC in Indiana
An Indiana business license does not perform the same function as an LLC. A business license cannot be substituted for an LLC; individuals need both to operate an LLC in Indiana. a business license is an official document issued by government entities that authorizes a business to operate in a particular area. In contrast, an LLC is a business structure that is beneficial for legal and taxation purposes. Registration for a business license is not handled by the Indiana Secretary of State (SOS), while registration for an LLC is handled by the SOS. Typically, business licenses are handled by government licensing agencies or at the city or county level.
Do I Need a Business License if I Have an LLC in Indiana?
Yes, all LLCs must have business licenses to be able to conduct business in the state. Indiana does not have a single, comprehensive business license, but LLCs must have specific licensing depending on their business type. The Indiana Department of Business and Neighborhood Services provides a list of business licenses for LLCs in the City of Indianapolis. Business owners can also check the Business Owner’s Guide for specific business licenses that may be required for their LLCs.
How to Dissolve an LLC in Indiana
Indiana LLC’s that want to dissolve their business must file with the Indiana Secretary of State (SOS) first. Filings can be done online, by mail, or in person in compliance with IC 23-18-9. However, this process only ends the obligations of the business to the SOS. The business owner still has to properly close the business with all other agencies in which their business is registered.
Domestic LLCs must file Articles of Dissolution (Form 49465) with the SOS. Foreign LLCs must file a Statement of Withdrawal of a Foreign Entity (Form 56374). The filing fee for Form 49465 and Form 56374 is $30 each. Payment can be made by credit card, money order, check, or cash. All Local county assessors must be notified of any business closure. Per IC 23-18-9-7.5, an LLC can revoke its dissolution within 120 days of its effective date.
LLCs who intend to dissolve their businesses might be required to close their tax accounts with the Indiana Department of Revenue (DOR). Businesses that refuse to close their tax accounts would continue to receive bills for estimated taxes from the DOR. LLCs can close their tax accounts online through INTIME, fax, or mail. Fax and mail applicants must file an Indiana Business Tax Closure Request (Form BC-100) with the DOR. completed form can be faxed to (317) 232-1021 or mailed to:
Indiana Department of Revenue
Tax Administration Processing
PO Box 6197
Indianapolis, IN 46206-6197
LLCs whose businesses have been administratively dissolved can reinstate their businesses by submitting the following forms to the DOR:
- Affidavit for Reinstatement (AD-19 for Indiana entities or AD-19(2) for out-of-state entities)
- ROC-1 Correct/Change or Responsible Officer Information Form
After submitting the appropriate forms, Wait for the DOR to send a Certificate of Clearance. Then submit the certificate alongside the following forms to the SOS:
- Completed Application for Reinstatement
- Completed Business Entity Report
- Foreign LLCs must submit a certificate of existence issued within the last 60 days by the proper authority in the state where they were originally incorporated.
- Appropriate Business Entity Reports filing fees plus the reinstatement fee of $30