How to form an LLC in Oklahoma in 6 easy steps
Oklahoma is a great state to start a business in, chiefly because of its low startup costs. If you decide to make your business structure a Limited Liability Company (LLC), Oklahoma is a great state for forming an LLC because of its flexible organization terms, no double taxation, and limited personal liability.
What does it take to start an LLC in the Panhandle State? Here are the 6 essential steps you should know about before diving in.
1. Check if your business name is available
First on your to-do list as a prospective business owner is finding out your LLC name availability. To do this, you will need to conduct a name search on the Oklahoma Secretary of State website. When it comes to creating an Oklahoma LLC name, it is essential to keep the following points in mind:
- The name must include the words “Limited Liability Company,” “Limited Company,” or the abbreviated versions “LLC,” “LC,” or “L.C.”
- If you are filing as a Limited Liability Limited Partnership, you may use the abbreviations “LLLP” or “L.L.L.P.”
- "Limited" can be abbreviated as “Ltd.,” and the word company as “Co.”
To reserve a name, you will need to file an Application for Reservation of name with the Oklahoma Secretary of State office.
Now, LLC names are different from a trade name or fictitious name. A trade name, or “Doing Business As” (DBA) name, is one under which a corporation or business entity does business other than its legal name. Sole proprietorships most commonly use this. A fictitious name is a name under which a person transacts business other than their legal name and is typically chosen by domestic or foreign business partnerships.
2. File Articles of Organization
Next up on the agenda is filing the Oklahoma Articles of Organization. This is a crucial component of establishing an LLC, and should include the following information:
- LLC name
- Duration of LLC
- Business street address
- Registered agent street address
- Notice of Limitation on Liabilities
If you are an out-of-state business looking to operate in Oklahoma, you must establish a foreign LLC. For this, you will need to provide the name of the LLC, the original state or jurisdiction of business formation, the date the company was initially formed, and the name and address of the registered agent.
Once you have paid the state fee of $100 and filed the Articles of Organization, the typical turnaround time for having your LLC established is 15 to 20 business days.
3. Write your operating agreement
Like most states, Oklahoma does not require business owners to draft an LLC operating agreement. However, having one could very well save you from a great deal of trouble regarding assets and finances. In the operating agreement, you should include the following details:
- Formation: Date and location of LLC formationLLC name: Formal, not fictitious or assumed, LLC name
- Business purpose(s): Specific business activities at the time of initial signing of the agreement
- Membership provisions: Details regarding liabilities of members, organizational costs, management structure, voting rights, and other business matters
- Tax and financial provisions: Tax classification of LLC, accounting method, bank accounts, and title to assets
- Capital provisions: Financial and personal asset contributions of LLC members
- Dissolution: Any events that could cause the dissolution of the LLC
While you do not need to file the operating agreement formally, keep it in a personal file to have on hand for members and stakeholders to review if/when required. If you are a single-member LLC or multi-member LLC, just know that you must fill out a separate operating agreement.
4. File your Statement of Information
In the State of Oklahoma, the Statement of Information is called an “Annual Report” or “Annual Certificate.” You must file this every year to update your business information, and you need your company name and address and the name and address of your Oklahoma registered agent.
Having a registered agent service is necessary for a few reasons. A resident agent will ensure accuracy, which is essential in reporting. Also, using a resident agent will allow you to keep your address private since documents will be forwarded to the agent’s office address instead of yours.
5. Pay your taxes
As an LLC owner in Oklahoma, you can qualify for what is called “pass-through taxation.” This means that your LLC will not need to pay federal taxes. However, if members decide to take earnings, you will still need to pay self-employment and federal income tax–and it will be the responsibility of individual LLC members.
Regardless of taxation status, all LLCs need to pay Oklahoma state taxes–including sales tax and use tax. Sales tax is paid when you are selling goods, and use tax is paid whenever you purchase equipment or other goods for your business out of state. For example, say you need to buy equipment from Florida for your shop, you will need to pay Oklahoma use tax.
One way to reduce the amount of self-employment tax you pay to the state is to be treated as an S Corporation. This is a status that the Internal Revenue Service (IRS) grants to eligible LLCs. Here are just some of the qualifying factors for S Corp status:
- Be a domestic LLC
- Have only allowable shareholders (and no more than 100)
- Have only one class of stock
- Not be an ineligible corporation, such as a financial institution, insurance company, or an international sales organization
6. Wrap up other regulation and operational requirements
Depending on the nature of the business you are conducting, you will most likely need to obtain a business license(s). For example, if you sell goods such as clothing or houseware, you must obtain a sales tax permit. Any retail business selling to customers via an online or in-person store must obtain a sales tax permit.
Whether they are located in Oklahoma or not, wholesalers must obtain a sales tax permit from the Oklahoma Tax Commission (OTC). This is because they sell goods to a business in a state that requires a sales tax permit to sell to customers.
The only businesses that are not required to have state licenses, according to the Oklahoma Department of Commerce, are professional services such as photography businesses, fitness businesses, massage businesses, and auctioneers.
Now, if you wish to show that your entity has filed all the necessary reports, you should obtain a Certificate of Good Standing from the Oklahoma Secretary of State in Oklahoma City. This certificate is especially great to have on hand if you plan to apply for business loans or permits.
Get LLC insurance in minutes by following these steps
The next step is protecting your new venture with LLC insurance. Huckleberry offers several options to help you get the coverage that makes the most sense for your business.
Here’s how to get started:
- Visit Huckleberry.com and click on the “Instant Estimate” button. Here, you can get quotes for various insurance coverage types.
- Type in your industry so Huckleberry knows what insurance coverages are right for you.
- Answer a few questions about your LLC, including payroll estimates, revenue projections, and more.
In less time than it takes to down a dish of crispy fried okra, Huckleberry will provide you with quotes for multiple small business insurance options.
Looking for workers’ comp coverage? Use our quick workers’ comp rate estimator to get a free, no-commitment cost estimate.
Setting up your Oklahoma LLC isn’t all that difficult, and the state has provided new entrepreneurs with plenty of helpful resources to get through the process. Most people choose to establish their company as an LLC for unmatched liability protection, so it’s wise to continue to protect your business with small business insurance. Here’s (and cheers) to a successful new chapter as a business owner!
Whether you’re looking to enroll in workers’ comp coverage online or you need a general liability policy for your company, Huckleberry can help. And within just 5 minutes! It’s time to offer yourself peace of mind and enroll in the small business insurance policy that works best for you and your business.