Think about your LLC a year from now: raking in profits and taking Indiana by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Indiana.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Indiana startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Indiana
- Optional: LLC Name Reservation Fee
- $10 (online only)
- Required: Articles of Organization Fee
- $97.14 for online submissions and $100 for hard copies
Overall Indiana LLC Formation Costs
LLC Name Reservation Fee
Reserving a name isn’t mandatory for starting an Indiana LLC, so you’re welcome to skip this step if you aren’t interested or if you’re ready to start your business right away. But if you aren’t starting your LLC for a while and you’re worried that your name might get taken, a reservation can be helpful. $10 gives you exclusive name rights for 120 days, after which you can renew the hold by paying another fee. But if there’s nothing stopping you from filing your Articles of Organization, do that instead, as it will officially register your name.
Articles of Organization Fee
This is the big one, the most important form that you’ll file to start your Indiana LLC. As far as the state is concerned, your business doesn’t exist until you’ve successfully filed your Articles of Organization. It’s going to set you back $97.14 (for online filings) or $100 (for paper ones), but as long as your filing is accepted, you’ll never have to pay this fee again.
Not all LLCs require licenses, but depending on the type of business you run and where it’s located, you may need to apply for licensure before commencing operations. For example, athletic trainers operating in Indiana need to apply for a license through the Indiana Athletic Trainers Board. Plus, each city has its own licensure requirements, so your business may also need to be licensed locally. Costs vary for these licenses depending on the type. Check with the Indiana Professional Licensing Agency and your local government to see which licenses you might need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Indiana business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer, and it’s important to weigh all of your options before hiring someone. But with so many lawyers out there, this decision can be intimidating. That’s where a site like Avvo can help. Its lawyer database gives you access to rates, areas of expertise, locations, and contact information for hundreds of Indiana business attorneys, so you can make an informed decision.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Indiana. In this case, you would file a “Foreign Registration Statement” instead of the Articles of Organization.
All foreign business entities are required to foreign qualify in Indiana, or they could incur some pretty severe penalties. To avoid them, file the Foreign Registration Statement online or by mail. The filing fee is $105 for online applications and $125 for paper ones. It’s pricey but, like the Articles of Organization, as long as your filing is accepted, you won’t need to pay it again.
LLC Biennial Fees
So far, we’ve mainly discussed one-time fees, but Indiana LLCs also incur some recurring ones, primarily the “Business Entity Report.” This report must be filed every other year by the end of the month in which you formed your LLC. Filing online will cost you $32, and filing a hard copy costs $50. Plan on paying this every two years.
The federal government considers LLCs “pass-through entities,” which means that the company itself isn’t subject to corporate income taxes; its members simply file their own tax returns.
The state of Indiana doesn’t charge LLCs with a specific “franchise” or “privilege” tax either. However, there are a number of circumstances that would cause your LLC to pay business-related state taxes. Your business will need to pay a specialized tax if it:
- Will be selling products (sales tax)
- Has employees (withholding tax)
- Sells food and beverages (sales tax and food-and-beverage tax)
- Rents accommodations for less than 30 days (innkeeper’s tax)
- Rents motor vehicles (motor vehicle rental tax)
- Distributes gasoline or special fuel (prepaid fuel tax)
- Sells tires (tire fee)
- Sells fireworks (sales tax and safety fee)
- Sells prepaid wireless cards (911 fee)
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Miss any required fees or taxes and your LLC will be looking at “delinquent” status. The most common causes of delinquency are not filing a Business Entity Report or failing to maintain a valid registered agent. Business Entities Reports don’t carry late fees, but the state can administratively dissolve your LLC if your report is more than 120 days late. A late tax payment will result in a tax lien and Warrant for Collection of Tax, which may involve a collections agency or sheriff.
But delinquency is a dangerous status for your business for other reasons too. Delinquent companies cannot receive a Certificate of Existence, which is necessary for foreign qualification in other states, business loan applications, professional license renewal, and other business filings. Keeping up with your forms and fees will save you a lot of time, money, and stress down the line.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Indiana.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Business Entity Reports – so your business doesn’t fall out of good standing.