Wonder if Oklahoma is good enough to kickstart a private business? Well, there is quite a number of facts going for it. Driven by oil and gas industries, Oklahoma's economy creates a welcoming business environment in the state. Lower living and energy costs as compared to many other states along with a central location of the state making it a great transportation hub, and inviting pro-business policies and incentives make Oklahoma a business-friendly state. Add to these advanced workforce development programs and you’ll get an ideal place to set up an enterprise from scratch or launch a startup project.
If you are determined to join the business ecosystem of Oklahoma and want your enterprise to stand strong on its feet from the very beginning, a limited liability company is by far the best choice of a business structure. Its flexibility and personal protections it brings are hard to underestimate. However, an LLC is a formal structure that requires state registration, and many beginner entrepreneurs think it’s difficult to establish. In our article below, we’ll prove you wrong and provide a detailed guide that will walk you through the formation process. Besides, we’ll give you a list of tasks to complete to properly maintain your business after formation.
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When you have a business idea and have already worked out a strategy for its realization in the state of Oklahoma, it’s high time to think about a formal part, which is business formation. The very first step to take on this path is to give your future company a name.
A company name is a sort of business card representing your enterprise to the market, competitors, and potential customers. It’s no wonder, any business owner wants the name that will make their company noticeable and distinguishable. So, we’ve made a brief list of quick tips on how to come up with the name that will suit your enterprise to a tee:
When inventing a name for your Oklahoma LLC, you are not too much bound by restrictions and can go creative. However, not to go overboard and sound ridiculous, silly, or irrelevant, there are still naming rules putting some limits to your creative endeavors. Those rules are stipulated in Section 2008, Title 18 of the Oklahoma Statutes and set forth the following:
Should you need some kind of license for your future LLC in Oklahoma, we strongly recommend checking if the chosen company names comply with the state laws to avoid any legal problems.
Once you’ve made up your mind about the LLC name versions you like, you should perform a name search before filing. It’s necessary to make sure the targeted business name is available. Available stands not only for “not occupied by any other company” but also for “not similar to any existing LLC name” in the state.
To do an LLC name check in Oklahoma, use a free name search tool on the Oklahoma Secretary of State’s website. You can monitor the chosen moniker in full or check it in separate words. Should the name appear occupied, you can still use it subject to the consent of the current name owner or subject to a court order that entitles you to use it.
In case the desired name is free, you can grab it and either use it for an immediate LLC registration or put it on hold for 60 days. To reserve a business name, it’s enough to file an application to the state office and pay a $10 fee.
You can file the name reservation form online right from anywhere or send it by mail to:
Oklahoma Secretary of State421 N.W. 13th, Suite 210
Oklahoma City, Oklahoma 73103
The name under which you file your LLC in Oklahoma is a registered or official name. Normally, it’s used in legal documents and circulates in public records. However, for marketing and operational purposes, you are allowed to use an alternate moniker different from the one entered in your formation documents. This is a DBA (doing business as), assumed, fictitious, or trade name. In a word, it’s a kind of nickname under which your company will appear and operate on the market. In Oklahoma, a “trade name” is the most popular term for a DBA.
Why a DBA is a good idea? First of all, you can omit an “LLC” part in DBA, thus, making your company name look more professional. Besides, you are free to invent something catchier and more original if your registered name sounds too formal. Yet, the biggest plus is that you can get multiple DBAs for a single LLC that will give you an opportunity to launch several product lines or build several brands under the roof of the same LLC structure. This way, growing a business, expanding your activities, or bringing your venture to the next level becomes much easier from the legal point of view.
You can start your small business as a “Caroll’s Hair Studio LLC” and operate under the DBA “Caroll’s Hair Studio”. Should you add more beauty services to your list, you can rename your company to “Caroll’s Beauty Center”, for example. Notably, you won’t have to make any changes to your formation papers. It’s enough to simply register a different DBA.
Speaking of a trade name registration in Oklahoma, it’s as easy as sending a basic trade name report to the Secretary of State’s Office. You can submit it via email or post it online, which is a quicker option. Each DBA application will cost you $25, which is a processing fee.
Once formed, your Oklahoma LLC will become a legal entity that will function independently and have a number of obligations to fulfill and rules to follow. Those are the duties and regulations set forth by the government and state authorities. Those authorities, in their turn, want to be sure your LLC keeps an eye and diligently observes their requirements. This is where a registered agent function comes into play.
As the name suggests, it’s your company’s legal representative in the state. With LLCs, though, this function is established exclusively for mail processing purposes. A registered agent is in charge of receiving and handling your LLC’s legal mail or so-called service of process. This notion covers lawsuits, tax notes, state requests, court notifications, and other official papers addressed to your company.
By receiving your crucial letters and informing you about important notices in time, a registered agent is a guarantor of your LLC’s good standing with the state. Should you miss a letter from the court, there is a risk you’ll lose the lawsuit by default judgment. Should you fail to catch up with reporting or filing requirements, your LLC might get fined. While it seems there is nothing special about correspondence, it means a lot for your LLC’s compliance status. So, mail handling should be treated seriously.
Despite the ultimate importance of this role, the requirements for this position are not very strict. In Oklahoma, any physical person over 18 years old could serve as your registered agent, irrespective of their educational or professional background. The main rule is that a person should be a state resident with a registered street address in Oklahoma. Likewise, a legal entity registered and operating in the state could be an agent for your LLC too.
To quickly find a service that will match your needs to a tee, check our detailed Best Registered Agent Service ranking that covers the best industry operators.
Speaking of legal entities, given the number of LLCs operating in each US state including Oklahoma, there are companies dedicated to providing registered agent services. Their work is payable on an annual basis and the payment usually varies from about $100 to $150 on average. Besides, you can serve as your own registered agent if you permanently live in Oklahoma or have a registered office there.
Serving as a Oklahoma registered agent for your own LLC looks like a straightforward and effortless choice. There is no need to search high and low for a person or entity you could trust. You don’t have to pay anyone for the service. You can do the job from the comfort of your home or regular office. And no one will have access to your confidential docs. In the end, no one will cope with the task better than you, right? While it sounds natural to many beginner businessmen, we don’t think it’s your best choice.
What you’ll get with a hired registered agent, on the other hand, is:
To us, the above-mentioned aspects sound persuasive enough to make a third party a much better alternative to serving your own registered agent. More than that, we suggest that you consider a professional service for this role that will handle this function better than anyone. The majority of dedicated services are national and will cater to your needs in any US state, should you want to expand your business at some point.
When you get your LLC name checked and registered agent appointed, the LLC formation itself is fairly easy. You just need to file your formation documents with the state and get them approved. And a formation document for an LLC is the Articles of Organization. Generic by nature, this paper will bring your legal entity to life and make it an eligible part of the existing business environment. So, as simple as it is, it’s a vitally important paper.
While the filing process is not something that you can’t do by yourself, there is nothing wrong with the desire to delegate this job. And there is a whole bunch of companies that will be ready to help. In our Best LLC Service article, we’ve made a review of the top-rated formation services to suit varying business needs and different budgets.
The document is regulated by the Oklahoma Statutes that stipulate the following in relation to the Articles of Organization content:
Most often than not, official state portals offer free downloadable templates of the Articles of Organization in Oklahoma. So, it won’t take you more than a few minutes to fill it in. Then, you can either file it online via the Secretary of State’s website or mail it to the office. You can even bring it to the state department in person if you reside in Oklahoma.
Each state has a fixed filing fee that falls anywhere from $40 to $400 in some states. Oklahoma hits the midground in this concern. A state filing fee here specified in the Secretary of State’s Fee List is $100.
Unlike in other states where filing might take whole weeks, in Oklahoma, you’ll have to wait for two business days to get your approved formation documents back. This term is valid for online filing. If you send your docs by mail, get ready to wait for up to two weeks, though. Meanwhile, if you want to receive the approved Articles of Organization the same day, you can bring the papers in person and pay $25 in extra for the same-day filing.
Many startuppers and first-time entrepreneurs skip this step or don’t give it enough attention, which is wrong. An Operating Agreement is a company bylaw and it’s not a law requirement in Oklahoma. Yet, it doesn’t mean the document is not important. In fact, this internal paper is a warranty for the smooth and problem-free operation of your business since it’s an Operating Agreement that executes and fixes all covenants and contracts between the LLC owners. It’s a sort of detailed instructions on how members should behave in certain vital business situations and how they should manage and operate their business overall. Notably, the lack of an Operating Agreement implies that your business is governed by default laws that are not always aligned with your LLC needs and strategies. Hence, an executed Operating Agreement is your chance to run your enterprise your way.
Basic rules for this document are again established in the Oklahoma Statutes. The key points this document covers are as follows:
It’s worth noting that when discussing and working out the clauses and conditions of an Operating Agreement, the LLC co-owners come to a mutual understanding and get a common vision of the future business operation and control. This allows avoiding any critical disagreements and disputes in the future.
Similar to individuals, businesses are taxpayers. And just like individuals get Social Security Numbers to identify themselves as taxpayers, businesses get EINs for the same purpose. An EIN stands for an Employer Identification Number or a Federal Tax ID in other words. It’s a nine-digit code assigned to a legal entity that makes it visible and traceable for the federal and state governments including tax authorities and other financial organizations.
While single-member LLCs can get EINs optionally, for multi-member LLCs, this number is required by law. However, our recommendation is that you obtain it for your company anyway. Not only is it yet another aspect of maintaining your LLC’s formal and legal independence, but also you might need to have it for a few other reasons:
Getting an EIN in Oklahoma is as easy as one, two, three. Just visit the website of the Internal Revenue Service, fill in an online form, and get your number back the same day. That’s it! You don’t need any assistance from third parties and can do it in mere minutes.
When your LLC is formed and duly supported by an Operating Agreement and an EIN, there are still a few more aspects you should set your eyes on. These are so-called backup elements that will further strengthen your LLC’s positions in a real business environment.
A dedicated checking account for business is yet another brick in the wall of your LLC’s legal independence. The benefits it brings to your company include:
All in all, you should have separate accounts for your individual matters and for business, full-stop. This way, you’ll keep your corporate veil intact and prevent your personal funds from being seized to settle the business liabilities.
Business is a risky thing. No matter how hard you try from the start and plan all your actions, there are still risks and situations you can’t 100% foresee and prevent. Yet, you can dampen the consequences of those emergencies for your business by purchasing business insurance.
What you do need to think over in every detail is the types of insurance that will be appropriate for your industry and the coverage that will compensate your potential losses to the maximum. The most common types of business insurance include general liability and commercial property insurance, professional liability insurance for the added defense against malpractice damages, and worker's compensation insurance relevant for the businesses using the hired workforce.
As for the policy coverage and other more specific types of insurance that will best match your business activities, you’d better consult with a business insurance expert.
While there are aspects vital for your business transactions, there are also certain requirements set forth by the state that you need to comply with to keep your company eligible.
Licensing is a sensitive issue for many businesses, no matter the industry. Licenses are regulated at federal, state, and local levels. The type of license or permit you might need to conduct your business in Oklahoma directly depends on the type of activity you are engaged in. To learn more about licensing requirements in Oklahoma, you can check the licensing page of the Oklahoma Department of Commerce. Besides, engaging a business accountant or professional business consultant wouldn’t go amiss.
It’s not a secret that LLCs are taxed as pass-through entities, and income taxes of the company are payable on the personal tax returns of its owners. On top of that, your Oklahoma LLC will be subject to Social and Medicare taxes and employee-related taxes if you plan to get hired staff.
There might be more taxes on your plate depending on the type of business you run. To learn more about that and work out the most efficient taxation scheme for your company, it’s advisable that you consult with a tax expert specialized in LLCs.
Oklahoma Statutes requires that LLCs submit Annual Certificates to update their business info. That certificate or annual report as they call it in other states could be filed online or transferred by regular mail along with the payment of a $25 fee.
A limited liability company is a welcoming legal structure for many businesses. Start an LLC is easy. Select your state to start.