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

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FAQs

Can I operate my LLC from home in Oklahoma?

Yes, you can operate your LLC from home in Oklahoma, but you may need to comply with local zoning laws and possibly obtain a home occupation permit. Additionally, if you’re using your home address as your business address, consider privacy implications.

How do I obtain a Federal Employer Identification Number (EIN) for my Oklahoma LLC?

Obtaining an EIN for your Oklahoma LLC is a straightforward process that can be done online through the IRS website or by mailing Form SS-4. This number is necessary for tax purposes, hiring employees, and opening a business bank account.

Do I need coding experience to launch a website for my LLC?

No. Platforms like Domain.com and GoDaddy are excellent starting points for this purpose, offering a wide range of domain names that can perfectly match your LLC’s branding. They also offer simple site builders, which include customizable templates, drag-and-drop interfaces, and integrated hosting services that do the work for you.

Are there annual state fees for maintaining an LLC in Oklahoma?

Yes, Oklahoma LLCs are required to pay an annual certificate fee of $25 to maintain good standing with the state. This fee is due every year and can be paid online through the Oklahoma Secretary of State’s website. There may also be renewal fees for some licenses or permits.

Can I convert my sole proprietorship or partnership into an LLC in Oklahoma?

Yes, you can convert a sole proprietorship or partnership into an LLC in Oklahoma by filing the appropriate formation documents with the Oklahoma Secretary of State and adhering to the state’s conversion procedures, ensuring a smooth transition of business structure.

Does Oklahoma have a DBA?

Yes, Oklahoma allows businesses to operate under a different name from their legal name by filing a “Doing Business As” (DBA) name, also known as a trade name. This process involves registering the DBA with the Oklahoma Secretary of State, enabling companies to conduct business under a secondary name.

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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 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.

Those forming an LLC in Oklahoma shouldn’t run into too many issues as the state’s process of LLC organization is straightforward and doesn’t require any founders to complete any unusual steps.

Starting an LLC in Oklahoma step-by-step

1. Select a name for your Oklahoma LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of Oklahoma:

1. An LLC’s name must be distinguishable from the names of existing business entities on file with the Oklahoma Secretary of State.
2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “Limited Company”, “LC”, “L.C.”, “LLC”, or “L.L.C.” The abbreviations “Co.” and “Ltd.” may be substituted for the words “Company” and “Limited”, respectively.

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

Check name availability

Confirm that your chosen LLC name is available to use in Oklahoma with a search of the Oklahoma Secretary of State Business Entity Database.

Reserve your LLC name with the Secretary of State

Reserving your LLC name with the Oklahoma Secretary of State is a good idea because it disallows another business in the state from using it before you are prepared to file Articles of Organization.

File an Application for Reservation of Name with the Secretary of State online or by postal mail. The reservation application filing fee is $10.

2. Designate a registered agent

As in every U.S. state, forming an LLC in Oklahoma 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 Oklahoma OR if the individual or business is based out-of-state, they must have a business office in Oklahoma.

3. File Articles of Organization

An LLC is formed in Oklahoma through the filing of Articles of Organization of an Oklahoma Limited Liability Company with the Oklahoma Secretary of State.

The Articles of Organization must provide the following information:

• LLC’s name, principal office address, and email address
• Whether the LLC is perpetual or will end at a set date
• Registered agent name and address
• Name and signature of an LLC member, manager, or legal representative

You can file the articles online or print a PDF copy and file by postal mail. The filing fee is $100.

4. Create an operating agreement

Although not a legally mandated step for forming an LLC in Oklahoma, 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

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.

File an annual certificate

All LLCs active in Oklahoma must file an annual certificate (similar to the annual report that must be filed in many states) with the Secretary of State each year by the anniversary of the effective date of its Articles of Organization or of its authorization to do business in the state (foreign LLCs). The annual certificate can be filed online using the Secretary of State Entity Filing web application or through the mail. The filing fee is $25.

Obtain business licenses and permits

An LLC active in Oklahoma may be required to obtain one or more state or local business licenses, permits, or certifications depending on its type of business and primary location.

Sales and Use Tax Permit: One critical permit for LLCs in Oklahoma is the Sales and Use Tax Permit. This permit is mandatory for all businesses involved in the sale or lease of goods and services subject to sales tax within the state.

The process to obtain this permit includes a fee of $20 plus a handling fee, and applicants are required to provide their Secretary of State Filing Number and Employer Identification Number (EIN) during the application process.

Occupational licenses: Depending on the nature of your business, you might need to obtain various occupational licenses or permits. These are typically related to the specific services or products your business offers and are regulated by state boards or agencies overseeing professions and industries.

Visit the Oklahoma Department of Commerce Business Licensing & Operating Requirements site for information on how to fulfill state business licensing obligations.

Local licenses: Additionally, businesses may need to secure local licenses or permits. The requirements for these licenses can vary significantly from one municipality or county to another. Therefore, it’s crucial to check with the local city or county clerk’s office where your LLC will operate.

They can provide information on any local regulations, zoning laws, and licenses that might be necessary for your specific business location and type of business. For information on local licensing requirements, contact a city or county clerk in the area where your LLC is located.

Understand taxes

Like all states, Oklahoma allows LLCs to be treated as pass-through entities, in which all profits and losses are reflected on the personal income taxes of the owners.

Pass-Through Entity Tax: However, the state also levies a Pass-Through Entity Tax that is uncommon. LLCs that are classified as pass-through entities are subject to a 4% Pass-Through Entity Tax on their net income. This is the same rate as the 4% corporate income tax for businesses registered as C-corporations, though the calculations and maximum payments differ.

Federal self-employment tax: Additionally, there’s the matter of self-employment taxes, which are relevant for LLC owners. Since the earnings from the LLC are passed through to the individual owners, these earnings are subject to federal tax, including self-employment, which covers Social Security and Medicare.

This is an important consideration for LLC members, as it affects their personal tax liabilities and requires careful planning to ensure compliance and optimize their tax position.

Register with the Oklahoma Tax Commission: Certain LLCs active in Oklahoma must register with the Oklahoma Tax Commission in order to fulfill various state tax obligations. This includes LLCs that collect sales tax on retail goods and services and LLCs with employees.

You can register to pay state taxes online using the Oklahoma Taxpayer Access Point (TAP) website.

Understand BOI reporting

The Corporate Transparency Act (CTA) of 2021 introduced the national Beneficial Ownership Information (BOI) requirement to enhance transparency and combat financial crime. This mandate requires corporations, LLCs, limited partnerships, and other legal entities formed or registered in the US, including Oklahoma, to disclose information about their beneficial owners.

The reporting process involves submitting the required information electronically through FinCEN’s secure portal.

The deadlines for filing vary:

• Entities formed or registered before January 1, 2024, have until January 1, 2025, to submit their initial report.
• Entities formed or registered in 2024 must file within 90 days after receiving notice of their business formation.
• Entities formed or registered on or after January 1, 2025, have 30 days to file. Any changes to the reported information must be updated within 30 days.

Learn more about BOI Reporting.

Post LLC tasks

Set up business bank accounts

While LLCs don’t legally need their own bank account, a fundamental principle for maintaining the legal structure’s integrity and protection is separating personal and business finances.

Opening a business bank account provides a:

• Clear demarcation of funds, which is crucial for accurate bookkeeping, tax preparation, and financial management.
• Simplified process of tracking business expenses, managing cash flow, and preparing financial statements.
• Way to preserve the personal liability protection that comes with the LLC structure, ensuring that personal assets remain protected in case of business liabilities or legal actions.

Consider online banking solutions: When it comes to selecting the best bank account for LLCs, businesses increasingly turn to digital-first banking solutions that offer convenience, lower fees, and enhanced features tailored to small businesses’ needs.

Platforms like Found, Relay, and Mercury are popular choices among LLC owners. These digital banking platforms are designed with the entrepreneur in mind, offering streamlined, accessible, and cost-effective banking options for LLCs navigating the complexities of today’s business environment.

Obtain a Certificate of Good Standing

Certificates of Good Standing are available to businesses in Oklahoma. These certificates aren’t mandatory, but they may be requested by a business vendor or a new partner to ensure your business is on good terms with the state. Obtaining a Certificate of Good Standing in Oklahoma can be done through the Secretary of State either online or by mail at no cost.

Build a website

Today, a website is crucial for any business, including your new LLC. The first place customers will look for anything is online, and you want to be sure they can find information on your services, products and where to find you.

To make this easily available online, you can start a website with next to no technical knowledge. Here’s how:

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.

Costs to set up an LLC in Oklahoma

• Incorporation fees: The primary expense for initial setup is the Oklahoma Articles of Organization Filing Fee, which is $100, with an additional $4 fee if the payment is made by credit card. This fee is payable to the Oklahoma Secretary of State and is a mandatory step in officially forming your LLC.
• Annual Report filing fee: The main recurring cost will be your Annual Certificate Fee of $25, which is required to be paid every year to the Oklahoma Secretary of State. This fee is crucial for keeping your LLC recognized as an active and compliant entity within the state.
• Registered agent service fees (optional): You may choose from various optional services that could benefit your LLC. One common choice is a registered agent service, ranging from $50 to $200 per year. Some entrepreneurs prefer to hire a commercial service to manage this role to ensure someone is always available to receive notifications and to ensure confidentiality.

Foreign LLC registration

An LLC formed outside of the state that intends to do business in Oklahoma must register with the Oklahoma Secretary of State.

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

1. Comply with Oklahoma LLC naming guidelines and confirm that your LLC’s name is available for use in the state with the Oklahoma Secretary of State Business Entity Database. If the name is unavailable in the state, you must fill out and attach a Statement of Fictitious Name Report along with the application.
2. Appoint an Oklahoma registered agent.
3. File an Application for Registration of a Foreign Limited Liability Company with the Oklahoma Secretary of State. The application can be filed online or by mail. The filing fee is $300. The application must be accompanied by either a Certificate of Good Standing or a Certificate of Existence from the LLC’s home state that is less than 60 days old.