Real estate investment has always been a financially rewarding business, and as more people are looking for a long-term root of investment, rental property businesses are gaining a significant share of the market. If you’re looking to start a rental property business in Ohio, you may want to consider setting up a Limited Liability Company (LLC). The primary advantage of forming an LLC is the level of liability protection it provides the owners. Additionally, it offers the ease and flexibility to manage the business.
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Step 1: Conduct a Preliminary Research
Before registering as a rental property LLC in Ohio, you should conduct a thorough research as Ohio laws come with their requirements for LLCs. Start by searching the internet for reliable information sources, talk to a CPA or an attorney with experience in forming LLCs, or visit the Secretary of State’s office website to analyze the prevalent procedures and relevant forms required for the registration.
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It’s also essential to determine the structure of your LLC early on in the research. LLCs can be structured two ways, single-member LLC and multi-member LLC. A single-member LLC has only one owner, and a multi-member LLC has two or more owners. Ohio LLC laws don’t limit the number of members that can form a multi-member LLC.
Step 2: Choose a Name that Adheres to Ohio Requirements
Picking an excellent business name for your LLC is essentail in getting off to a good start. The name you choose for your LLC should not only represent your business, but it also needs to adhere to Ohio naming conventions. There are Ohio naming requirements that you need to be cognizant of:
- The name “Limited Liability Company” or use an acronym (LLC) should be included in your LLC's name.
- Avoid names that sound like a government agency or violate any certain purposes.
- Ensure a thorough search is conducted before you finalize a name to avoid conflict with already existing businesses.
To ensure your chosen name is not taken, carry out a name search with the Ohio Secretary of State's office. If available, you can request to have your business name be reserved for one hundred and eighty days for a fee of $50.
Step 3: Get a Registered Agent
To start an LLC in Ohio, you must have a registered agent. A registered agent, also known as an in-state agent or resident agent, is an individual or business entity that receives official papers and communications on behalf of the LLC. Appointing a registered agent is vital because should a legal dispute arise, they can be notified and authorized of the legal and tribunal-related circumstances involving your business.
An Ohio resident can also be your LLC’s registered agent, but their main requirement is to have a physical street address in Ohio. It would be best to consider using professional third-party registered agent services in Ohio as they provide secure and reliable services and keeps your officals documents in one location.
Step 3: File Your Articles of Organization
To officially form an LLC, you’ll need to file articles of organization with the required state agencies amid licensing fees. In Ohio, the filing office is Ohio Secretary of State Corporations Division. The collected fees are amounting to $99. Apart from the standard knowledge-based identification details, include in the document, should be included like:
- The name of your LLC
- The names, addresses, and signatures of all the LLC members.
- Date of LLC formation
- Duration and you may want to mark the timeline if your business is permanent or just temporarily.
- Name and address of your registered agent.
After filling and submitting paperwork, you can expect the company office to process these instructions within 3 -7 business days. Expediting the process will cost an additional $100.
Step 4: Draft Your LLC Operating Agreement
Finally, once all the steps above are completed, you can now draft your LLC operating agreement. An LLC operating agreement is a legal document that statutory rules of operations when governing the company, and provides clauses with legal allocation and overriding authority. creating an LLC operating agreement in Ohio is technically optional as it’s not a requirement set by Ohio law.
Forming an Online Rental Property LLC in Ohio can generate a passive income source as no personal experiences are required to start. It must be kept in mind to were not personal responsible for your assets if it fails, given you followed the rules set by Ohio minority. Having carried out these steps, and adhered and considered relevant regulations for Ohio LLC, are essential steps when it comes to creating and running a successful LLC.
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