Fact checked for accuracy by Billie Anne Grigg, a bookkeeper and Mastery Level Certified Profit First Professional.
If you are looking at starting a business in Oklahoma, an LLC, or limited liability company, may be a perfect fit for you. You will get the tax benefits companies get while still having the flexibility that a sole proprietorship or partnership offers you. Starting a company seems like a daunting task. However, the reality is that it is a much simpler process than you may think.
This article will walk you through, step-by-step, how to start an LLC in Oklahoma.
Step 1: Choose a Name For Your Company
The first step is to choose the name for your business. As this name is what your company will be known as, you will want to choose a name that is relevant to your business and is easy to remember.
When selecting a name for your business, make sure it is available. You can check the availability of the name for your LLC here.
Another important consideration in this step is to make sure that the name follows the guidelines given by the State:
- The name of your company must include “Limited Liability Company” or one of its abbreviated versions like “LLC” or “L.L.C.”
- The name cannot include a word like “Incorporated” or anything else that would confuse your LLC company with another type of business.
- Certain terms like “bank” may require extra approval from the proper authorities. It may also require that your business employ professionals with the appropriate qualifications.
- Your name must be unique and cannot be similar to the name of another business in the state.
Once you’ve decided on your name, make sure you are committed to it. You can certainly change your name in the future if you so choose, but there are a few hoops you’ll have to jump through. If you aren’t filing for your LLC immediately, consider reserving your name for up to 60 days for a fee of $10.
As a precautionary step, you should also check to see if your domain name is available.
Step 2: Appoint a Registered Agent For Your Business
A requirement for setting up an LLC in Oklahoma is to appoint a registered agent. A registered agent can be a member of the LLC, including the owner, or a registered agent service in Oklahoma.
As it is a primary function of the agent to receive official government and legal documents, there are a couple of requirements you should note before considering an entity or person to act as your registered agent:
- They must have a physical address in Oklahoma
- They must be available during regular business hours to receive official documents
You are also able to act as your own registered agent. But this is not generally recommended as your physical address will be made public. If you are unsure of who to appoint as your registered agent, there are companies such as ZenBusiness or IncFile that offer the service of being your registered agent for a small annual fee.
Step 3: File the Articles of Organization
Filing the Articles of Organization is what will officially form your LLC as a legal entity. In addition to this application, you’ll need to pay a filing fee of $100. You can file the Articles of Organization through the online portal or by mail.
The Articles should include basic information about your LLC, including but not limited to the name, address, and email address.
The standard processing time for the Articles of Organization is a couple of days if you file online. This means that after filing your Articles, your LLC will be officially formed in just a matter of days when you receive your Certificate.
Step 4: Get an EIN
The last step to setting up your Oklahoma LLC is to get an Employer Identification Number (EIN). The EIN is essentially a social security number for your LLC and will be used for:
- Opening your business bank account
- Applying for any business credit cards
- Hiring employees
- Tax purposes
If you are a single-member LLC, you are not required to obtain an EIN, but if you want to do any of the above, you will need one. As it is free to apply for and is just a simple form, it is highly recommended that you get one just in case.
Cost To Start an LLC in Oklahoma
There are a few costs associated with setting up an LLC in Oklahoma:
- Oklahoma LLC Articles of Organization filing fee: $100
- Name reservation fee: $10
- LLC formation service: The cost can vary depending on the service you receive and the company you choose.
What To Do After Forming Your LLC in Oklahoma
Congratulations on forming your LLC! You now have an official business in the state of Oklahoma.
Now that your company is formed, you must take the time to finish off the remaining steps to fully set up your Oklahoma LLC.
Create Your LLC Operating Agreement
The next step is to complete your LLC operating agreement. This is a crucial document that defines how your business operates internally.
Although it’s not a requirement to have an operating agreement in the State of Oklahoma, it is highly recommended to create one. This can be done before, during, or after the LLC is formed.
This document clearly defines roles, dynamics, and the process in the event of the business dissolution. It’s in the best interest of all parties involved in the LLC to have this agreement formed and completed.
This is a private business document, so you don’t have to file it with the state.
There are 6 main topics that this agreement covers:
- Organization – The structure of the business in terms of its members, i.e., single-member, multi-member, etc.
- Management and Voting – How the management operates and votes about topics regarding the LLC
- Capital Contributions – Lays out the initial and any following capital contributions made by members of the LLC
- Distributions – Lays out how profits and losses are to be distributed among the members of the LLC
- Membership Changes – Lays out how members are added and removed from the business
- Dissolution – Lays out the affairs of the business should it be dissolved
Open a Business Bank Account
A very important step after your LLC is formed, and your business has an EIN is to set up a business bank account. By doing so, you are protecting your personal assets from any financial actions taken against the business.
Mixing your personal finances with business finances could spell trouble for you. Make sure that any contributions made by you or salary payments made to you are recorded transactions for the business.
Get Business Insurance
Once your business is up and running, it’s very important that you have the proper insurance policies in place for your business.
Whether insurance is required for your business or not, it is very important to have these policies in place in case of any workplace accidents, negligence, damage to business property, and more.
At the very least, you should get general liability business insurance. If you have employees, get workers’ compensation insurance. There are many different policies and options out there, so consider asking an insurance broker to understand what the best option would be for you.
How to Keep Your LLC Compliant in Oklahoma
Ensure that your LLC remains compliant. If you don’t, the State of Oklahoma may dissolve your LLC. Some of the important steps to follow are:
- Maintain a registered agent
- Pay federal and state taxes
- Hire a business attorney if you have any doubts or questions
You should also make sure you have the proper licenses and permits as well as register for your annual certificate.
Get the Proper Licenses and Permits
A very important step to take when registering your LLC is to check whether your business requires a certain permit or license in order to be compliant.
If your type of business does require a permit or license, you can either file for these yourself or have an LLC formation service do it for you:
- Federal: You can use the U.S. Small Business Administration (SBA) guide for your federal business licenses and permits
- State: Apply or learn more about these licenses, permits, and registration with Oklahoma’s Department of Commerce Business Licensing
- Local: Contact your local county clerk to learn more about the local licenses and permits that you may require
File Your Annual Certificate
Your Oklahoma LLC is required to complete and submit an annual certificate, also called an annual report in other states. It is due by the end of the anniversary month your LLC is formed. This is required for all Oklahoma businesses.
You can file your annual certificate online through the Oklahoma SOS Portal. There is a filing fee of $25.
Tax Filing Requirements for LLCs in Oklahoma
Taxes can get complicated, so it is highly advisable to hire an accountant for your business, but there are some general tax filing requirements you should keep in mind.
All LLCs are by default considered pass-through entities, meaning that the LLC’s tax obligations are passed to the individual members of the LLC through their personal tax returns. This means that as a business owner, you will need to pay state income taxes for any money that you pay yourself as well as federal self-employment tax.
You will also be required to pay sales tax if you sell any goods or services. You must collect sales tax on any goods and services you sell and pay the collected tax to the Oklahoma Tax Commission.
Oklahoma does have a franchise tax for businesses, but this does not apply to most LLCs. However, if you choose to get your LLC taxed as a corporation, your LLC will be required to pay a franchise tax.
Frequently Asked Questions
How long does it take to register an LLC in Oklahoma?
It generally takes 1-2 business days to process the Articles of Organization if you file online. If you file by mail, expect it to take around 7-10 business days, not including mail time. Unfortunately, as of now, the State of Oklahoma does not offer expedited processing. However, since the processing time for online filing for the Articles of Organization is only a couple of days to begin with, this shouldn’t be a problem for most.
What tax structure should I choose for an LLC in Oklahoma?
Most LLCs will benefit from continuing to be taxed as a pass-through entity. However, if you have bigger earnings or a larger company, being taxed as a corporation could be to your benefit. By doing so, you will pay less on your federal self-employment taxes. There is no right or wrong answer, as the tax structure that is best for your business will depend on your specific situation. You should speak to a licensed tax professional for tax advice on your business.
Should you hire an LLC formation service in Oklahoma?
Forming an LLC in Oklahoma is not too tricky, so it is definitely something most people can do themselves. However, if you simply do not have the time to deal with the paperwork and would prefer to spend your energy elsewhere, hiring an LLC formation service could certainly be a great option. Many of these services can also help you file for the correct licenses and permits that you’ll need for your specific business.
Filed under: Oklahoma Business Guides