Indiana is among a number of states where creating an LLC is not difficult, but guidelines still have to be followed. Many states are business friendly and want to welcome LLCs and other business entities, but they still have requirements. Those legalities protect the businesses, but they also protect the consumers from problems that might arise without proper guidelines and regulations. For anyone who is starting an LLC, Indiana is one of the locations to consider when it comes to a new business entity.

Getting Started

Naming the LLC

Like many states, Indiana gives people the option to search online to find whether a particular business name is taken or available. For names that are already taken, other options may be available that are similar. However, there are also prohibited and restricted words that cannot be used by any company. The prohibited words are those that are tied to federal and state entities, and may cause confusion among consumers if they are used by LLCs. Restricted words can be used, but only in certain circumstances. Filing a name with a restricted word requires more paperwork. While choosing a name, an LLC should consider whether the domain name is available, as well.

Selecting a Registered/Statutory Agent

A registered agent is someone who has been authorized by the LLC to receive official correspondence. This can be someone within the LLC or a third party, as long as they meet the requirement of being a resident of Indiana. It’s also possible to use a corporation as a registered agent, as long as the corporation is authorized to do business in the state. By meeting those requirements, an LLC can name a person or corporation they trust as their registered agent and have peace of mind when it comes to who is handling or viewing their correspondence.

Filing Articles of Organization

Indiana allows an LLC to file its Articles of Organization for a Domestic LLC online, so it is easier for businesses to get started. The online filing fee is $90. Articles of Organization are, essentially, all the important information about the business and what it does, which is very helpful for tax and insurance purposes, along with licensing and permitting requirements.

Creating an Operating Agreement

Like many states, Indiana does not require an operating agreement. There are still people who will create one just because they feel better having that documentation. There is certainly nothing wrong with that, and some states still require that agreement. However, Indiana is not one of those states, so there is no reason to create an operating agreement based on anything the state will require.

Running Your Business

Getting Your EIN

What’s an EIN?

An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business.

You’ll need an EIN to

  1. Open a business bank account.
  2. File Federal and State Taxes
  3. Hire employees.

Before you get your EIN:

  1. Make sure your new business has been properly formed before applying.
  2. Be wary of paid sites. EINs are free direct from the IRS.

How do I get an EIN?

  1. Apply online: The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen.
  2. Call: You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday.
  3. Snail Mail – You can download the form and mail it in.

Keep Business and Personal Accounts Separate

  1. Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life A LOT easier come tax time.
  2. Get a business credit or debit card. This will help you keep your expenses separate and easier to track.

Accounting

No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend.

A good accounting system is necessary to:

  1. Track income and expenses, so you can easily see if you’re making money
  2. Makes filing income taxes so much easier.

Always try and find something that will:

  1. Sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync.
  2. Automatch vendors, customers and other accounts.
  3. Let you accept credit cards and ach drafts with ease.

Indiana LLC Taxes

Among the things an LLC needs to set up in Indiana are taxes.

Unemployment

One of the required taxes is the unemployment insurance tax, which every LLC will have to pay.

Sales Tax

Every LLC should check into a setup for sales tax. For an LLC that is not selling any taxable goods or services, though, sales tax may not be necessary.

Income

For an LLC, the employee withholding tax is required.

Additionally, permits or licenses are needed. It is also important to consider that permits and licenses will not be the same for all businesses, to focusing on what is really needed and understanding licensing requirements for the state matters. That can allow for an LLC to avoid running afoul of the law. An EIN is also necessary in order to pay taxes, hire employees, and open a bank account in the name of the LLC.

Getting Insurance for your LLC

The one type of protection Indiana requires for LLCs with employees is Workers’ Compensation insurance. This can protect the employees if they are injured, but it also helps to protect the business when claims are made. While there is no specific requirement for other types of insurance, it can be important for an LLC to be adequately protected. That can mean general liability and other types of insurance that are not required but that can be very important to an LLC’s long-term health.

Keeping Your LLC Compliant

Indiana has hiring requirements, and a biennial report that an LLC must file. This is done every other year, by the end of the month the LLC was created in. The filing fee is $50. A Certificate of Good Standing is also available for companies that want one and that meet the requirements. An LLC that follows all the requirements for hiring protects its employees, and also protects itself against bad business practices and the problems that can come from them.

How to File a Foreign LLC in Indiana

Filing a foreign LLC is possible, for a fee of $90. The LLC must also meet requirements, and must file the appropriate paperwork and any other requested documentation.