How to Start an S-Corporation in Ohio (2023 Guide)

written July 21, 2023

It is important to understand the process of starting an S-Corporation in Ohio if you are planning to establish a small business. An S-Corporation offers many tax advantages and limited liability protections that can be highly beneficial to business owners.

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This guide will provide you with a step-by-step process on how to start an S-Corporation in Ohio in 2023, including all the necessary requirements and documents.

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Step 1: Choose a Name for your S-Corporation

First and foremost, you need to select a unique and distinguishable name for your S-Corporation. The name should not already be in use by another business in Ohio. You can check the availability of your desired name using the Ohio Secretary of State's website.

Step 2: Draft and File the Articles of Incorporation

After choosing a name, you need to draft the Articles of Incorporation. This is the legal document that officially forms your S-Corporation. The Articles of Incorporation must include important information such as the name of the S-Corporation, its purpose, the initial directors, and the number of authorized shares.

Once you have drafted the Articles of Incorporation, you need to file them with the Ohio Secretary of State’s office. You can file it online or by mail. Make sure to pay the required filing fee.

Step 3: Obtain an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is necessary for any business entity in the United States. It is like a social security number but for businesses. You will need the EIN to legally hire employees, open business bank accounts, and file taxes.

You can obtain an EIN for your S-Corporation by applying online through the IRS website. The process is free and usually takes only a few minutes.

Step 4: Create Corporate Bylaws

Corporate bylaws are internal rules that outline the day-to-day workings of your S-Corporation. They establish procedures for meetings, voting, and other important operational aspects.

It is recommended to consult with an attorney while drafting your corporate bylaws to ensure compliance with Ohio state laws and regulations. Bylaws are not required to be filed with the state but need to be stored with the corporation's internal records.

Step 5: Hold an Initial Board of Directors Meeting

After the formation of your S-Corporation, you need to hold an initial board of directors meeting. During this meeting, the directors will ratify the bylaws, elect officers, and discuss or approve any other important matters related to the corporation. Minutes of the meeting should be taken and stored with the corporate records.

Step 6: Register for State and Local Taxes

Before commencing business operations, you must register with the Ohio Department of Taxation and obtain the necessary state and local tax identification numbers. This includes sales tax, employee withholding tax, and unemployment compensation tax, if applicable to your business activities.

Be sure to research and determine which taxes are relevant to your S-Corporation based on the nature of your business.

Step 7: Obtain Required Licenses and Permits

Depending on the specific nature of your business, you may need to obtain certain licenses and permits. Ohio operates various regulatory agencies overseeing different industries. Identifying the necessary licenses and permits for your S-Corporation is crucial to ensure compliance with state and local regulations.

Step 8: Understand Ongoing Compliance Requirements

Owning and operating an S-Corporation in Ohio requires ongoing compliance with various state and federal regulations. Some common compliance requirements include filing annual reports, paying franchise tax, maintaining proper records, holding regular meetings, and complying with employment laws.

Conduct regular research, consult with professionals, and stay informed about any changes in laws or regulations to ensure your S-Corporation remains compliant.

Conclusion

Starting an S-Corporation in Ohio in 2023 requires careful planning and following a series of steps. The process involves choosing a name, drafting and filing the Articles of Incorporation, obtaining an EIN, creating corporate bylaws, registering for taxes, obtaining licenses and permits, and understanding ongoing compliance requirements.

Consider consulting with an attorney or other professional advisors to ensure proper completion of all regulatory and legal aspects of starting an S-Corporation in Ohio. With thorough preparation and adherence to the requirements, your S-Corporation can enjoy the benefits of tax advantages and limited liability protection.

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