Summary
The fact that you may need to register with state agencies like Ohio Secretary of State is a sneaky misconception that many folks miss.
However, with the rise of remote work, states have begun cracking down and levying penalties for those who (unknowingly) fail to register.
If you're considering operating in Ohio, use this guide to:
- Explore the that triggers the need to register with the Ohio Secretary of State, including criteria such as physical presence, economic activity, and advertising efforts.
- Determine where and how to register with the Ohio Secretary of State.
- Understand additional requirements such as Registered Agents, registration with other state departments, and ongoing annual reports.
What criteria would trigger the requirement to register with the Ohio Secretary of State?
Key Factors
Ohio looks at these factors to determine if your business activities count as "doing business" in the state:
Physical Presence: The following indicate a physical connection to Ohio:
- Having an office, store, warehouse, or other physical location.
- Having employees, contractors, or sales representatives operating in the state.
- Owning or leasing property (real estate or tangible property) within Ohio.
Economic Activity: Ohio also considers these activities as creating a connection:
- Selling goods or services to Ohio customers (including remote or online sales).
- Providing services within Ohio.
- Regularly soliciting business or engaging in a significant amount of transactions within the state.
Specific Examples
These would likely be considered doing business in Ohio:
- Operating a retail store or restaurant in Ohio.
- Maintaining a warehouse or distribution center in Ohio.
- Sending employees to provide services to Ohio-based clients.
- Having a sales team that regularly visits clients in Ohio.
- Selling products to Ohio residents through an online store or marketplace (especially if you hit certain sales thresholds).
Important Considerations
- Nexus: Ohio has established rules addressing "nexus", which is the level of connection needed to trigger tax and registration obligations. This includes physical presence and a degree of economic activity in the state.
- Commercial Activity Tax (CAT): Ohio's CAT is a tax on businesses with taxable gross receipts in the state. If you're doing business in Ohio, you're likely subject to this tax.
- Out-of-State Employees: Even if your employees are working remotely from other states, if their base of operations is in Ohio, the income they earn can be taxed by Ohio.
Where do I register, and what else is required?
- A Certificate of Good Standing is required
In addition:
A Registered Agent is required to serve as the company's physical in-state presence to receive important legal documents. Do not fall victim to the common misconception that you can leverage an in-state employee as your Registered Agent. It's far too risky.
You'll want to review the other registrations required in Ohio. Here's a Ohio specific guide we put together.
What is the registration fee?
The fee charged by Ohio is $99.
How long does Ohio usually take to process?
Ohio usually takes approximately 1 - 2 weeks to process registrations.
What is required ongoing?
Each state has a complex schedule of required annual reports, which can vary by entity type. Let's take a look at Ohio's:
C-Corporation
- Filing Date: By the end of the registration anniversary month
- Filing Frequency: Annual
LLC
- Filing Date: By the end of the registration anniversary month
- Filing Frequency: Annual
Non-Profit
- Filing Date: By the end of the registration anniversary month
- Filing Frequency: Annual
There is an Easier Way
Automate registration and annual report tracking in AbstractOps.This guide should definitely help reduce some of the confusion for Ohio. However, if you have multiple states to worry about, you may look to:
Automate state registrations and annual reports
Centralize email, snail mail, state ID’s, and registered agents, and
Take control of action items, eliminating risks before they become penalties.
Start the AbstractOps product demo to see how easy this can be.
Note: For the avoidance of doubt, nothing provided here shall contemplate, constitute or include tax or legal advice. Always double check with state agency websites for the most up-to-date requirements.
