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.
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.
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|LegalZoom||$79 + state fee||Brand||Fair||Yes|
|🥇 ZenBusiness||$49 + state fee||Overall Value||Excellent||Yes|
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Bare Minimum Cost to Start an LLC in Indiana
Optional: LLC Name Reservation Fee
- $20 (online only)
Optional: LLC Formation Service
- $49 for an LLC service like ZenBusiness and $79 for LegalZoom
Required: Articles of Organization Fee
- $100 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. $20 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.
To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.
Whether you reserve your business name or not, you should always perform an Indiana business name search to make sure the name you want is available.
Business Domain Name & Website
To properly brand your business, you’ll want to acquire the domain name so nobody else can use it. Search for and find the perfect one through GoDaddy for just $4.99.
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 $100 whether you choose to file online or on paper, but as long as your filing is accepted, you’ll never have to pay this fee again.
The information you’ll need to file your Articles of Organization includes your LLC’s official business name, your LLC’s principal office address, the name of your registered agent, your registered agent’s address (if you use a noncommercial registered agent), an indication that your registered agent has consented to serve in this role, the LLC’s dissolution date (if applicable), an indication that your LLC is managed by its members or a manager, the date, and your LLC organizer’s title, printed name, and signature.
Before we move on, we’ll briefly mention that if you’re forming a series LLC, you will need to use a different version of the Articles of Organization, and you’ll also need to prepare and file an additional document known as the Articles of Designation. For more information, check out our full guide to the Indiana series LLC.
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.
What are some of the most commonly required business licenses for Indiana LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common.
LLC Formation Service
Starting an LLC in Indiana 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 company. These services take care of the registration process for you, so you don’t have to spend time on research, paperwork, and filings.
Most of these services (like ZenBusiness and IncFile) offer basic LLC formation services 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 an Indiana 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, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
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 $500-2,000.
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.
If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in Indiana. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.
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 information required to file your Business Entity Report includes the name of your LLC, your LLC’s principal office address, the current filing year, the previous years in which you filed a report, the date you formed your LLC, the jurisdiction where you originally formed your LLC, an indication that your business is an LLC, the name of your registered agent, your registered agent’s address (if you use a noncommercial registered agent), the names and addresses of your LLC’s members (optional), the date, your name, and your signature.
For more information on filing the Indiana Business Entity Report, you can check out our full guide about this document.
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.
Key Steps for Starting an Indiana LLC
- The first step to forming an Indiana LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
- Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in Indiana, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
- The third step involves the preparation and filing of your Articles of Organization. You’ll need to fill out the paperwork and pay a $100 fee. Once the state processes this document, your LLC will be officially open for business!
- That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. There is no legal requirement for Indiana LLCs to have written operating agreements, but it’s still an extremely important element of any LLC. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
- You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
- Next, you’ll need to register for any relevant taxes with the Indiana Department of Revenue, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.
Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of Indiana!
Key Steps for Maintaining an Indiana LLC
After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.
You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.
As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.
Frequently Asked Questions
Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in Indiana.
What are the state business tax rates in Indiana?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rate of 3.23%. If your LLC is taxed like a corporation, you’re required to pay Indiana’s 4.9% corporate income tax on your business revenue.
How quickly does Indiana process LLC formations?
The Secretary of State should be able to process your LLC’s formation within seven business days.
How many small businesses are there in Indiana today?
The state of Indiana is home to more than 120,000 small businesses. Entrepreneurs of all backgrounds and business types find that Indiana is a great place to own and operate a small business.
What are the top small business resources and websites in Indiana?
The Indiana chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Indiana LLCs. The U.S. Small Business Administration’s Indiana District Office is another valuable resource, and the state’s Economic Development Corporation also has plenty of good info.
Should I form my LLC in Indiana, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.