Forming an LLC in Indiana
By Catherine Hodder, Esq. | Legally reviewed by Ally Marshall, Esq. | Last updated November 18, 2022
Do you want to set up an Indiana LLC? A limited liability company, or LLC, is a popular business entity for entrepreneurs. The advantage of an LLC business structure is that it offers personal liability protection and pass-through taxation to small business owners. If you are interested in creating an Indiana LLC by yourself, follow this step-by-step guide to LLC formation.
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Steps to Form an LLC in Indiana
Name Your LLC
Indiana has rules for business entity names. It must be different than any name of an existing business entity formed in Indiana, and the LLC name must contain one of the following endings
- Limited Liability Company (or one of its abbreviations)
- LLC
- L.L.C.
Search for Your LLC Name
First, search the business name with the Indiana Secretary of State on the INBiz Business Search website. The search will let you know if the name is in prior use. If you aren't ready to file the paperwork at this time, you can apply for a name reservation on the INBiz site for a $20 fee. The reservation is good for 120 days.
When creating a business name, you should also check the internet for registered domain names and trademarked names. You don't want to infringe on another business's name or trademark. You can check for domain name registration on the InterNIC and ICANN websites. The United States Patent and Trademark Office (USPTO) has a Search Trademark Database to determine if a trademark is registered.
Protect Your LLC Name
You also want to protect your business name. Two ways to do that are registering the domain name and trademarking the name. The domain name can be searched online and purchased through various vendors. You can apply for trademark registration of your business name at the USPTO website.
Get a Registered Agent
The State of Indiana requires an LLC to have a registered agent for service of process before formally filing with the state. A registered agent is designated to receive process (legal documents) on behalf of the LLC. An Indiana registered agent can be an individual or a company (domestic or foreign), but it must have a physical address in Indiana. It must be a street address. A P.O. box is not allowed.
Although you can act as your own registered agent, some entrepreneurs choose a professional registered agent service company or use a lawyer as their registered agent. An Indiana corporation can only have one registered agent; the business itself cannot act as its own agent.
File Your Articles of Organization
You can download a PDF application for Indiana's Articles of Organization for a Limited Liability Company (Form 49459). Or you can file online using the INBiz website. The filing fee is $95, and credit cards are accepted. If using the PDF application and mailing in, the cost is $100.
When drafting the LLC articles of organization, include:
- Name of limited liability company
- Name of registered office and address
- A statement that the LLC will be perpetual until dissolved or indicate a date of dissolution
- Who will manage the LLC (managers or members)
- If it is a single-member LLC (SMLLC)
The LLC organizer signs the articles of organization which could be the business's principal or a professional registered agent. An LLC formation service company can help with the articles of organization and filing of your LLC.
Draft an Operating Agreement
An operating agreement sets forth the rules for managing the LLC, similar to the bylaws of a corporation. In the operating agreement, you establish who owns the LLC, who runs the LLC, and how to distribute profits and losses. Indiana does not require your LLC to have an operating agreement to be legitimate, but it is a good idea for your business to have one.
When drafting an Indiana limited liability operating agreement, include the following points:
- Percentage of members' ownership
- If the LLC is run by member-managers or manager-members
- Voting rights and responsibilities
- Powers and duties of members and managers
- Distribution of profits and loses
- Holding meetings
- Buyout and buy-sell rules (procedures for transferring interest or in the event of a death)
The members may manage an LLC or hire an outside manager. You will indicate which you have chosen on your registration application.
When opening a business bank account or requesting a loan, a bank may want to review your LLC's operating agreement and the Indiana articles of organization.
Get an EIN
An Employer Identification Number (EIN), or tax identification number (TIN), is a federal number the Internal Revenue Service issues to identify your business. It is like a Social Security number for your business. If you have employees, you must file to receive an EIN on the IRS website. You must also apply for an EIN if the LLC has more than one member. You are subject to all federal tax-withholding rules.
Set Up Business and Tax Accounts
When setting up any business, investigate your LLC's federal and state tax obligations. You must create account for tax payments and withholdings, especially if you have employees.
Business and Tax Requirements in Indiana
Your new LLC must register a new business tax account on the Indiana INBiz website. You can set up accounts for withholding taxes and sales and use tax. This business tax application can also be completed by hand using Form BT-1.
State Business Tax
If the LLC is a C corporation with the IRS, the LLC pays a state business tax. The corporate tax rate is 8.5%. If the LLC is a pass-through business entity, the members report profits and losses on their personal income tax returns.
The members report LLC profits and losses on their personal tax returns if the LLC is a pass-through tax entity. If so, there is no state tax on the LLC itself. However, if the LLC elects for C corporation status with the IRS, the LLC pays a state tax.
State Employer Tax
If your LLC has employees, you set up an Indiana employer tax account as part of the new business registration on the Indiana INBiz website or by using Form BT-1. It may direct you to sign up for INTIME online, the Indiana Department of Revenue tax portal.
Sales and Use Taxes
If your LLC sells goods in Indiana, you indicate that when registering your business tax account. As the seller, you collect the sales tax from the purchaser and remit it to the state.
Business Licenses and Permits
Check with your town or county for business licenses and permit requirements. Depending on your type of business, for example, a restaurant selling food to the public, you need specific local business licenses and/or permits.
Registration in Other States
If you want your LLC to operate in other states, you must register your LLC as a foreign LLC authorized to do business in that state. Additionally, you must follow that state's rules for registering business tax accounts, especially if you hire employees and have a business in that state.
Biennial Requirements in Indiana
Instead of annual reports, Indiana LLCs must file a biennial business entity report with the Secretary of State to remain in good standing. File this report online through your INBiz account or complete Indiana Business Entity Report, Form 48725. File your biennial Business Entity Report every other year in the month you formed the LLC. For example, if you created your LLC on July 1, 2022, you file the report during the month of July 2025.
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