When forming an Indiana LLC, the state filing fee is one of the main ones that must be paid when filing your Articles of Organization with the Secretary of State.
In this article, we'll talk about the mandatory and optional fees that await young business owners at the initial stage.
Also, to find out how to form an LLC seamlessly and correctly the first time, read How to Open an LLC in Indiana.
Table of Content
Conventionally, the cost to form an LLC in Indiana, as in any other state, can be roughly divided into basic and additional expenses.
Basic expenses include mandatory fees for all limited liability companies, regardless of the niche or industry, namely:
Additional costs include:
For a business entity to become an established limited liability company, certain forms/documents must be completed and filed with the Secretary of State. Such documents are known as Articles of Organization.
The state filing fee for Indiana LLCs is $95, and it takes:
Unlike some other states, there's no expedited processing in Indiana.
How do you file your Articles of Organization with the Secretary of State? Read this article to find out.
Under state law, every limited liability company must file annual reports. This must be done once every 2 years by the end of the anniversary month.
For example, an LLC that is established on April 10, must file its initial report by April 30th in the 2nd year after formation, every 2 years.
The document must be filed with the Secretary of State by any authorized person.
The cost of the filing service will depend on the filing format. Thus, if you apply online, the fee is $22,44. Whereas, applications by mail cost $30. These costs apply to for-profit organizations.
In their turn, for non-profit organizations, the filing fee is $10 (when applying by mail), and $7,14 for online filing.
Note that the state does not expect LLCs to pay for overdue annual reports. Consequently, after being overdue once, as a business owner, you risk having your company shut down altogether.
Any state requires owners to appoint and maintain a registered agent (also known as "resident agent," "statutory agent," or simply an "RA").
This is to ensure that all state/federal/local agencies have constant and uninterrupted communication with the business for tax or legal purposes.
To work as a resident agent, you don't need to obtain any special education. Therefore, as a business owner, you can be your own RA or appoint anyone you trust to the position and save your money.
RA service cost varies, ranging from $49 per year to $500 per year. Some companies will also provide their registered agent services for free for the first year if you choose to form an LLC with their help.
To avoid "tying" yourself to the office and reduce the risk of getting junk mail you should consider hiring a professional RA service. We recommend reading our "Best Registered Agency Services in Indiana 2022" to find a reliable registered agent service.
LLC name reservation can be performed prior to filing the Articles of Organization with the Secretary of State. The cost of the procedure is $10 for both online registration and by mail.
The name reservation period is 120 days. After that, you must pay an Indiana LLC renewal fee for the name so that no other business takes your version of the name. Note that you'll need to check its availability on the Secretary of State's website.
You will also need to get a domain to help promote your products/services online. And preferably, it should also match your "doing business as" (DBA) name.
If you are planning to expand or, otherwise, start a new business in Indiana, and it's not your home state, then you will need to register a foreign LLC.
The process of forming a foreign LLC goes as follows:
The document can be filed online or by mail. The cost will depend on the filing way ($108 for online applications, and $125 for applications by mail).
The processing time, as well as the cost, depends on how the application is filed with the Secretary of State. An online application will be processed within 1-2 days, and applications by mail - within 7 days.
Note that foreign LLCs in Indiana don't need to file the Articles of Organization to legally operate in Indiana - only business owners who originally formed an Indiana LLC do so.
To open more than one firm at a time, or a series of LLCs, you must also file your Articles of Organization with the Secretary of State. In this case, the filing fee is $250 + $30 for filing each series LLC.
How long will it take to form a series LLC? It all depends on the filing method. For online applications, the processing time is 1 business day, and 7 business days for applications by mail.
Note that a series LLC also requires business owners to appoint a registered agent (one specialist is enough).
According to Indiana law, every LLC owner is required to pay income tax on the funds they pay themselves. The standard rate is 3.23%, but this figure may vary in some counties. Thus income tax rates range from 3.23% to 6.13%.
LLC owners pay state income tax on any profits, minus state allowances or deductions. If an LLC is taxed as a corporation, the income tax will have to be paid, which is 4.9%.
Business owners who sell physical goods in Indiana must pay sales tax. There is a 7% tax at the point of purchase.
Sales tax does not apply to necessities (food, medicine, clothing). Talk to your local tax expert or accountant to see if the sales tax applies to your business.
Every member of an LLC, including income managers, pays a 15.3% self-employment tax on business profits.
Note that business expenses (business trips, lunches, etc.) are deducted from the calculation.
As for federal income tax, business owners must pay it on any profits, minus federal allowances or deductions.
A wide variety of business licenses and permits may be needed, depending on the business activity of the company. They are issued at the local, state, and federal levels.
The most common business license that may be needed at the state level is a Registered Retail Merchant Certificate (RRMC), which allows an entrepreneur to sell/rent a tangible personal property. You will need this certificate on display for each business location (if any).
Here are just a few business spheres that require LLC owners to get a business license:
Note that for complete information on the necessary business licenses and permits, you will need to consult your local licensing department or call the Secretary of State's sales tax information line at 317-232-2240.
The cost of business licenses depends on your business type. For example, if you plan to open a pet store, then you need to pay an annual license fee of $200, whereas, for a massage parlor, the cost of a license would be $177 per year.
Let's take a look at other Indiana LLC fees. From this section, you will find out what you may need to consider during the formation stage.
If there's a need to register a different (shorter and more convenient) name for your LLC, then you should file a DBA, i.e. fictitious name.
Steps for setting up a DBA are as follows:
Certified copies can be ordered online through the Secretary of State's website. The service will cost you $15 + $1 per page.
You can submit your request online, and get immediate results. If the request is sent by mail, it can take up to 5+ days to process.
A certificate of good standing confirms that your LLC is properly registered with the state.
The certificate will allow you to open a business bank account, set up credit/debit card processing of customer payments, apply for credit, transfer or sell your business, register to do business in another state, etc.
You can obtain the document only if your business meets all of the state's requirements, including
A certificate of good standing can be ordered online ($26) or by mail ($30).