How to Start an LLC in Indiana (Step-by-Step Guide)

When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.

An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

Compared to some other states, starting an LLC in Indiana is a relatively straightforward process and entrepreneurs shouldn’t run into any major issues founding their business in the Hoosier state. To avoid a misstep in the filing process, follow these steps to start an LLC in Indiana.

Starting an LLC in Indiana step-by-step

1. Select a name for your Indiana LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the state of Indiana:

1. An LLC’s name must be distinguishable from the names of existing business entities on file with the Indiana Secretary of State.
2. An LLC is required to contain one of the following phrases or abbreviations at the end of its name: “Limited Liability Company”, “LLC”, or “L.L.C.”

Need help coming up with a business name? Check out our free business name generator.

Reserve your LLC name with the Indiana Secretary of State

After selecting a name for your LLC, you may reserve it with the Indiana Secretary of State to ensure that another business entity doesn’t use the name before your LLC is legally formed.

First, use the Indiana Secretary of State Business Search to confirm that your chosen name is available. Then, file a Reservation of Business Name online at the Secretary of State website. A name may be reserved for 120 days and the filing fee is $20.

Read more: How to perform an Indiana business name search

2. Designate a registered agent

As in every U.S. state, forming an LLC in Indiana requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.

The registered agent must either be a state resident or business entity with a street address in Indiana OR if the individual or business is based out-of-state, they must have a business office in Indiana.

Read more: How to Find the Best Registered Agent in Indiana

3. File Articles of Organization

An LLC is created in Indiana by filing Articles of Organization with the Indiana Secretary of State Corporations Division. Filing the articles can be done online or by postal mail. The filing fee is $100 and payment can be made by credit card.

Your Indiana LLC’s Articles of Organization should include the following details:

• LLC name and address
• Registered agent name and address
• A statement specifying whether the LLC is member-managed or manager-managed
• A statement specifying the LLC’s intended duration (perpetual or temporary)
• A statement providing the reason for forming the LLC, which can be a general statement
• LLC organizer signatures

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Indiana, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.

The operating agreement should do the following:

1. Describe the LLC’s business structure
2. Establish the individual responsibilities and obligations of LLC members
3. Detail how the LLC will be run
4. Name and address of the registered agent
5. Management of the LLC

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

5. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).

The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

6. Fulfill your legal obligations

Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.

Biennial Reports

All LLCs active in Indiana, including those formed in the state and foreign LLCs, are required to file a Business Entity Report with the Secretary of State once every two years.

Due date

The report is due every other year within the anniversary month of the LLC’s formation (i.e. the month when its Articles of Organization were filed).

Filing fee

The Business Entity Report can be filed online or through the mail. The online filing fee is $32 and the mail filing fee is $50.

Read more: What is an annual report?

Obtain necessary business licenses and permits

Although a general business license is not required by Indiana for LLCs, the need for licenses or permits varies depending on your area and the type of business you do.

Most businesses will need to obtain a seller’s permit or Registered Retail Merchant Certificate (RRMC), which allows you to collect the state sales tax and make payments to the state of Indiana. There is a $25 fee to file for this permit.

Identify state licenses by industry

Read through the Business Owner’s Guide provided by the Indiana Department of Business and Agriculture for detailed information on state business licenses.

The first step in figuring out your licensing requirements is to take a thorough look at your business operations and industry. Determine what goods or services your LLC will provide first, which will help you determine if you need any occupational or professional licenses. If your industry has this extra regulation, you must go through the appropriate agency and steps.

Identify local license requirement

There may also be local licensing requirements that apply to your Indiana business. Cities and counties can impose their own licensing requirements, including zoning rules. It is important you get any local permits required of you, along with state ones.

Read more: How to Get a Business License

Understand state taxes

In Indiana, LLCs are typically treated as pass-through entities, which means the LLC itself doesn’t pay federal income tax. Instead, the profits and losses “pass-through” to the individual members, and they report these on their personal tax returns.

Indiana tax rates

The state does not impose a separate income tax on LLCs; instead, members are responsible for paying Indiana’s individual income tax rate (currently 3.23%) on their respective shares of the LLC’s profits.

Federal taxes for LLCs

For federal income tax purposes, all members of an Indiana LLC, regardless of where they reside, are required to report and pay federal income tax based on their personal income tax brackets. Members who actively participate in the LLC’s business must also pay self-employment tax, which covers Social Security and Medicare benefits, on their share of the LLC’s net earnings.

State sales tax

If the LLC sells tangible personal property or certain taxable services within Indiana, it must register for a seller’s permit and collect and remit sales tax to the state. Additionally, some Indiana cities and counties may impose additional local income taxes or other business-related taxes, which can vary depending on your LLC’s location.

Franchise tax no longer exists

It’s worth noting that as of 2021, Indiana no longer imposes a franchise tax on LLCs. Additionally, LLCs have the option to elect corporate tax treatment by filing Form 8832 with the IRS, but this choice comes with additional formalities and potential tax disadvantages that should be carefully considered.

Register with the Indiana Department of Revenue

Many Indiana LLCs, including those that collect sales tax and those with employees, must register with the Indiana Department of Revenue. Registration can be completed online or through the submission of a completed paper application through the mail or in person at the DOR office.

Understand BOI reporting

As of January 1, 2024, there is a new BOI law that applies federally to all LLCs. This rule introduces a crucial reporting requirement for a variety of business entities, including the majority of LLCs.

Information required

Companies must report information on their beneficial owners—those who own or control the business—in accordance with this regulation. Names, addresses, dates of birth, Social Security numbers, and unique identifying information about the company itself are all included in the reporting requirement.

Process to submit

Reports have to be electronically submitted via the secure FinCEN portal in order to be in compliance with the requirement. The initial report deadline for companies formed before January 1, 2024 is extended to January 1, 2025; companies formed in 2024 have 90 days from the date of formation notification to file; and companies formed on or after January 1, 2025, have 30 days from the date of formation to file.

You only need to do this once, unless the BOI information changes or your business changes down the line. There are penalties for not filing, so be sure you do it by the appropriate deadline.

Learn more about BOI Reporting.

Post LLC tasks

Set up business bank accounts

Separating your personal and business finances is essential for the success and legitimacy of your LLC.

To achieve this, it’s crucial to set up a dedicated business bank account. Having a separate bank account for your LLC provides several benefits, including easier bookkeeping, liability protection of personal assets, and increased professionalism.

Research various banking options

Research different banks in Indiana and compare their offerings, such as fees and services, to find the best fit for your LLC’s banking needs.

Some online options may also be tailored to small businesses and LLCs like Found, Relay, and Mercury.

Schedule an appointment with the chosen bank and bring all the necessary documents to open your business bank account. You may also ask if they offer lines of credit or credit cards for the future.

Obtain a Certificate of Good Standing

A Certificate of Good Standing, also known as a Certificate of Existence, is an official document that proves your LLC’s compliance with state regulations. It confirms that your LLC has been properly formed and is current with all necessary filings and payments.

Obtaining a Certificate of Good Standing is often required when seeking financing, entering into contracts, or expanding your LLC’s operations.

You can obtain your Certificate of Existence online ($26 fee), by mail ($15 fee), or by fax ($35). Online applications are processed immediately, while others can take up to 5 business days or be expedited for a fee. These certificates must be renewed each year.

Build a website

When establishing an online presence for your LLC, it’s crucial to follow several key steps to help your small business grow. Aren’t sure where to start? Follow these steps to get started:

1. Search for and purchase a domain name.
2. Sign up for web hosting.
3. Pick a web builder like Domain.com or GoDaddy to create a site with no coding experience necessary.
4. Tailor your site to your customers, adding appropriate pages, content, and images.
5. If you’re selling goods, add an e-commerce section to your site.
6. Review, test, and publish your site.

Quick tips to create an effective site

• Focus on creating a visually appealing and easy-to-navigate website.
• Provide accurate content that represents your LLC and its offerings.
• Display your LLC’s contact information prominently on the website, including phone numbers, email addresses, and physical addresses.
• Consider adding an online store so you can sell products through your site.

Cost to set up an LLC in Indiana

Average cost to set up an LLC in Indiana: $127-$332

Starting an LLC in Indiana involves certain costs. While the exact expenses can vary based on your specific requirements and preferences, there are some common considerations.

• Incorporation fees: The Indiana Secretary of State charges a fee for filing the Articles of Organization to form your LLC, which is $100 by mail and $95 online, or more when expedited.
• Filing fees for Business Entity Report: Every other year, you will also need to file a Business Entity Report, which is $32 when done online and $50 by mail. Licenses and permits may have annual or biannual renewal fees to keep track of as well.
• Registered agent service fees (optional): LLC owners can serve as their own registered agents, but some choose to put a professional registered agent service in their place. If you choose to hire a service, you’ll pay an annual fee for them to collect official documents, scan them, and send them to a personalized portal for you to review. These services vary in price but expect to pay somewhere between $50 to $200.

Foreign LLCs

LLCs formed in a state other than Indiana that plan on doing business in the state must register with the Indiana Secretary of State.

Follow these steps to legally do business in Indiana as a foreign LLC:

1. Comply with Indiana LLC naming guidelines and confirm that the business name is available for use in the state by searching the Indiana Secretary of State Business Search.
2. Appoint an Indiana registered agent to handle service of process in the state.
3. File a Foreign Registration Statement with the Indiana Secretary of State. You can file the statement online or through the mail. The filing fee is $125.
   • Along with the Foreign Registration Statement, you must include a Certificate of Good Standing or Certificate of Existence from the state in which the LLC was formed. The certificate must be dated within 60 days or less of its filing with the Secretary of State.