The key to making the most of Ohio corporation and partnership law is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

Ohio partnership law makes a partnership subject only to personal income tax, unlike a corporation. On the other hand, business partners may be held responsible for business debts.

There are several options for forming a company under Ohio corporate law. These include:

1. An incorporation in Ohio as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. An Ohio limited liability company (LLC). This is a hybrid business entity that shares the characteristics of both a corporation and partnership. It pays incomes taxes and is more suitable for a small business with one owner.

3. An Ohio limited partnership. This type of partnership has limited partners in addition to general partners.

Action Steps
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Determine the type of corporation that best suits your business under the laws for Ohio corporations

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: The Ohio Business Gateway provides extensive resources for starting a business in Ohio including the selection of a business structure. Startup Legal offers a checklist for starting a business in Ohio and also has details on incorporating that are specific to Ohio.

Find an attorney that specializes in Ohio LLC laws

Incorporating in Ohio must comply with the disclosure, operating and reporting requirements. Ohio corporation law specifies these requirements in detail.

I recommend: Carney & Gluntz in Cleveland practices corporate law and also provides links to legal resources for businesses. Hall & Mueller are located in Fairborn and publishes a newsletter on business law that covers a variety of topics.

Seek out sites to help you perform an Ohio incorporation registration

You must file the registration forms and pay the associated fees as required by Ohio corporation law in order to perform Ohio LLC registration. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register.

I recommend: Buzgate.org provides resources for small businesses in Ohio including a FAQ on business formation. Incorp has specific information on registering a business in Ohio and also provides other business services.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Ohio corporate law requires annual fees and filings to maintain your corporation. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

Ohio corporate law sets forth the process of establishing a limited liability corporation, an S-corporation, a C-corporation and a partnership. You can structure the business yourself, hire an attorney or use a company that specializes in Ohio corporation and partnership law.

There are advantages and disadvantages with each type of business structure.

1. Limited Liability Company--Easy to establish, requires less administrative paperwork than a corporation and is not required to have a board of directors or officers, an Ohio LLC is best suited for small companies or sole proprietors.

2. S-Corporation--Ohio corporations protect the owners, or shareholders, from personal liability. An Ohio S-Corporation does not pay tax, but shareholders individually declare profits from the corporation on their personal income taxes.

3. C-Corporation--Any company that follows Ohio corporation law and pays a fee is considered a corporation. Ohio C-corporations are taxed, and shareholders are taxed on income from the corporation.

4. Partnership--Owners share the profits and losses. They claim profits on their personal income taxes, but the Ohio partnership itself pays no tax.

Action Steps
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Should you do it yourself or hire help for incorporation in Ohio?

Once you decide how you would like to structure your business, you need to make things legal. The business owner, through a professional service that specializes in this type of work or through an attorney, can complete incorporation in Ohio.

I recommend: If you plan to complete the paperwork on your own, the Ohio Secretary of State's office has the paperwork available online, as well as a listing of all required fees. If you want to hire someone else to do the paperwork, The Company Corporation offers an online tool to help determine the best structure, all of their prices are online, and they have a toll free number for customer support.

Understand the paperwork for Ohio corporation and partnership law

Ohio corporations and partnerships require a great deal of paperwork. While Ohio corporate law seems complicated, establishing a corporation or LLC safeguards your personal assets.

I recommend: Break down the process of incorporation into manageable tasks. Incorporation in Ohio takes time, but the process is straightforward. Keep up to date on the law with Anderson's Ohio Corporate Law Handbook, updated each year.

Know the annual responsibilities of Ohio corporations

The Secretary of State's office provides Ohio corporation information, but you need to research further to learn your annual responsibilities. Publicly owned corporations provide their shareholders with an annual report that includes financial information. They also provide the Securities and Exchange Commission with a completed form 10-K. Ohio partnership law and LLC law requires that the entities involved in the partnership or LLC claim income on their personal income tax; there is no additional financial reporting required.

I recommend: Good record keeping simplifies the job of writing an annual report. Many smaller companies distribute copies of their 10-K form, available through the SEC, to their shareholders in lieu of a formal annual report.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider hiring a corporate attorney to establish your corporation, partnership or limited liability company, and a CPA to handle annual financial reports.
• •  When setting up a corporation, carefully consider who you bring in as members of the board of directors.
• •  If your main concern is liability, Ohio LLC laws allow you to stay in control of your business while protecting your personal assets.

Ohio corporation and partnership law education and training will teach you how to create business entities such as an Ohio incorporation or limited liability company (LLC). It is especially important for attorneys who specialize in corporation and partnership law to understand the tax implications for a Ohio LLC and corporation.

The requirements needed to practice Ohio corporate law are determined by the state and may depend on the specific type of corporation law you wish to practice. A legal education in corporate law has three general phases:

1. Advising clients on the laws regarding incorporation in Ohio requires a law degree. Practicing attorneys will generally require a Juris Doctor (J.D.) degree from a law school approved by the state of Ohio.
2. An aspiring lawyer will need to pass a bar exam that is administered by the state. A background check will also be performed along with a character and fitness evaluation.
3. The lawyer must apply to Ohio’s licensing authority and pay the required fees. The admittee then takes an oath to comply with the rules regarding the practice of law in Ohio.
   

Action Steps
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Complete the formal education needed to learn about Ohio corporation law

There are a variety of universities in Ohio that grant J.D. degrees recognized by the state of Ohio. The required courses must be updated to keep up with changes in corporate law.

I recommend: Cleveland-Marshall College of Law offers a J.D. degree, five dual degrees and an L.L.M. Ohio Northern University Pettit College of Law is accredited by the American Bar Association and is a member of the Association of American Law Schools.

Gain admission to the bar in order to practice Ohio partnership law

As an Ohio corporate lawyer, your clients will frequently wish to form corporations or partnerships with their businesses. Ohio has specific bar exam requirements and also allows lawyers licensed in other states to practice law in Ohio through reciprocity agreements.

I recommend: The University of Toledo College of Law provides general information on taking the Ohio Bar Examination. The Ohio State Bar Association offers specific advice on studying for the Ohio bar.

Obtain the additional requirements needed to practice Ohio LLC laws

Get licensing information necessary for a career in Ohio corporation law. An attorney in Ohio must also meet that state's continuing education requirements in order to renew a license to practice law.

I recommend: The Supreme Court of Ohio provides specific information on the entire bar admissions process in Ohio. The University of Cincinnati College of Law describes how to apply for the Ohio Bar.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Consider a Master of Laws (LLM) degree as a means of distinguishing yourself from other attorneys who practice Ohio partnership law. An LLM is a postgraduate law degree that generally requires an additional year of study at a law school. Graduates from regional schools frequently obtain an LLM in order to compete with graduates from more highly ranked law schools. This is also an excellent opportunity to begin specializing in corporate law.