How to start a business in Indiana

If you're looking to launch your startup in the Hoosier State, read this first
9 minute read
Edward Kost @EdwardKost
Technical Co-pilot
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Everything you need to know to start your business in Indiana

Which business structure do you choose for your startup? With so many choices available it can be a very daunting to not only decide on a structure, but also learn how to implement it effectively.

In this post we will give you step-by-step instructions for establishing each business structure in Indiana.

Startup ecosystem in Indiana 

Before launching a business in any location, it's important to have an understanding of its startup ecosystem. Let's have a look at some important startup statistics in Indiana

 

Indiana startup stats infrographic

 

Planning your business in Indiana

Once you've done some market research to validate the demand for your business idea, the next step is to create a business plan.

Your business plan is the roadmap of your startup. It can also be your ticket to securing precious startup funding.

A business plan typically includes the following sections:

  • Value proposition

  • Market opportunity

  • Target market

  • Competitor analysis

  • Funding required

  • Sales and marketing

  • Financial projections

  • Milestones

  • Your team

Thankfully, we've written an in-depth guide to crafting a winning business plan.

Structuring and registering your business in Indiana

There are 6 main business structures, and all are applicable to both brick and mortar businesses and e-commerce businesses:

  1. Sole Proprietorships

  2. Partnerships

  3. C-Corporation

  4. S-Corporation 

  5. Limited Liability Company (LLC)

  6. Nonprofit

If you're uncertain about which structure best suits you, read our in-depth guide on structuring your business for success.

General procedures for all business types in Indiana

Regardless of which business structure you choose, you'll need to complete a few key steps:

Get your EIN

Sole Proprietors and Partnerships that don't plan on hiring employees don't need an Employer Identification Number (EIN), but it's still wise to get one in case you do bring on employees in the future.

All other business structures must get an EIN in order to register their business.

You can apply for an EIN online, or download the form and mail it to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Register a business name with the state of Indiana

If you want to trade under a business name different from your own full name, you need to register an Assumed Business Name with the Indiana Secretary of State.

This registration can either be filed online or by mail to the Secretary of State:

Secretary of State Business Services Division

302 West Washington Street, Room E018

Indianapolis, IN 46204

Before registering a business name, you should check its availability.

Get your licenses and zoning permits

In Indiana, some businesses require a professional license to legally operate in the state. To find out if your business requires a license, search for it on the Indiana Professional Licensing Agency website.

The location of your business may also restrict business activities. This may especially be the case if you plan to run a home-based business. Contact your local Indiana county's office to find out whether you need to apply for a zoning permit.

Open business banking accounts

This isn't necessarily a requirement, but highly recommended to keep business transactions separate from personal transactions.

Submit New Hire Reports

It's both a Federal and Indiana state requirement for all employers to report new hires to both the Indiana New Hire Reporting Center and the IRS.

File a business entity report 

An entity report is a biennial report filed to ensure records of your business are up to date. It's mandatory to file these reports. 

Tax details for all businesses in Indiana

All businesses in Indiana must register with the Indiana Department of Revenue in order to file their State Tax documents and register for state taxes.

You can find up-to-date tax information for all business structures on the Indiana Department of Revenue website as well on the IRS website.

Domestic vs Foreign business in Indiana

To make sure you're accessing the correct forms, it's important to understand the distinction between a domestic and foreign business in Indiana

A domestic business in Indiana is one that's headquartered within the state. Foreign businesses, on the other hand, are headquartered outside of Indiana

Now let's discuss the processes of establishing each individual business structure.

How to start a Sole Proprietorship in Indiana

Most Solopreneurs launch their business as a Sole Proprietor due to its simplicity of set up and cost effectiveness. You're always free to upgrade to a more advanced business structure (such as an LLC or Corporation) at any time as your business grows.

If your business solution poses any level of financial risk to your clients, it is better for you to choose a business structure with a higher level of personal asset protection, such as an LLC or Corporation.

If you've already completed all the general steps for launching a business in Indiana there's nothing more you need to do to register your Sole Proprietorship.

How to start a Partnership in Indiana

A Partnership is the simplest business structure that accommodates two or more cofounders.

There are three different forms of partnerships in Indiana:

General Partnership (GP)

This is the default type of partnership. All members within a General Partnership share debts of the business.

Limited Partnership (LP)

The personal liability of Limited Partnership members is capped to the amount they invested in the business. Limited partners don't have as much jurisdiction over business decisions as general partners. They function more like investors.

A Limited Partnership can be formed online or by mailing a Certificate of Limited Partnership to the Secretary of State. 

Limited Liability Partnership (LLP)

Limited Liability Partnership members are not held responsible for any financial negligence or fraud committed by other members.

You can register a Limited Liability Partnerships online or by mailing a Certificate of Limited Liability Partnership to the Secretary of State.

The process is the same for foreign LPs and LLPs. Just be sure to select a foreign certificate for your selected partnership.

Create an Indiana Partnership Agreement 

This is not an Indiana state requirement, but it is highly recommended. A partnership agreement is an internal document all members sign to indicate their agreement to set business procedures. To save time you can use a partnership agreement template.

How to form an LLC in Indiana

If you want the peace of mind of knowing that your personal assets are protected in the event of a lawsuit, you may want to structure your business as an LLC.

LLCs can either be run by managed by members or a designated manager.

Naming an LLC in Indiana

The names of all LLCs in Indiana need to end in any of the following:

  • L.L.C

  • LLC

  • Limited LIability Company

Before registering your business name you should verify its availability

Appoint a registered agent in Indiana

Indiana requires all LLCs to appoint a registered agent. A registered agent guarantees the acceptance of all business mail to ensure any legal mail is not missed. 

All registered agents in Indiana must meet the following criteria:

  • Be located in the state of Indiana

  • Accept mail via a residential or business address (not via a PO BOX).

  • Guarantee availability during business hours.

  • Guarantee the timely forwarding of all accepted mail to respective business owners. 

Should you be your own Registered Agent in Indiana?

You can legally appoint yourself (or a cofounder) as your own registered agent. However, this is not recommended because, as busy business owners, you can't guarantee your availability during business hours to accept mail.

Alternatively you could appoint a friend, relative or any of the following professional registered agents in Indiana

Submit Indiana Certificate of Organization

This document officially registers your LLC with the state of Indiana. The Indiana LLC Articles of Organization can either be lodged online or submitted by mail. 

Create an operating agreement

An LLC operating agreement is not an Indiana requirement, but highly recommended. It contains all the rules and procedures that will govern your LLC.

You can design this agreement however you like or use an LLC operating agreement template. All members should sign this document during the initial corporate meeting.

Host initial Corporate meeting

This is an opportunity for all members to plan the company's launch as well as complete the following procedures:

  • Vote for initial term directors to serve

  • Distribute stock certificates 

  • Complete settlements for high-value business purchases

  • Create a list of corporate laws that will govern the business (Bylaws)

Foreign LLCs in Indiana

To establish a foreign LLC in Indiana, business owners need to obtain a Certificate of Good Standing from their home-based Secretary of State and also submit Foreign LLC Registration Statement.

How to form a Corporation in Indiana

A Corporation is the most sophisticated business structure available in Indiana. This structure offers the most superior level of personal asset protection to its members.

A Corporation can be very complicated to set up on your own, so you might want to get help from an attorney.

There are two different types of corporate structures in Indiana:

C-Corporation

This is the default corporate structure. There's no limit to the number of members a C-Corporation can have and they can issue all classes of stock.

The primary downside of C-Corporations is the double taxation process that takes place at both the corporate and personal income level of their members.

S-Corporation

An S-Corporation is classified as "pass-through-entity," so they're only taxed once at the personal income level of their members.

To elect to be an S-Corporation, you need to submit Form 2553 with the IRS.

S-Corporation can only distribute one class of stock and are limited to 100 members.

Naming your Corporation in Indiana

Corporation names in Indiana must end with any of the following suffixes:

  • Corporation

  • Company

  • Incorporated

  • Limited

  • Corp

  • Co

  • Inc

  • Ltd

Appoint a registered agent for your Corporation in Indiana

The process of appointing a registered agent for Corporations is the same as the process for LLCs.

Submit Indiana Articles of Incorporation 

A Corporation is officially formed in Indiana upon the approval of its Articles of Incorporation.

This document can be submitted online or by mail.

To access either option, head over to the Indiana Secretary of State website and navigate to the title "For-Profit Corporations". Select either "Domestic" or "Foreign".

.

Host initial Corporate meeting

The following procedures should be completed during this meeting:

  • Initial directors that will serve during the first term should be appointed

  • All members should agree upon a set of bylaws that will govern the Corporation 

  • Stock certificates should be distributed to members

  • Finalization of important business purchases

  • Meeting minutes should be recorded and stored in a Corporate Records Book alongside all other important business documentation

  • The creation of dissolution dissolution procedures

Foreign Corporation in Indiana

Foreign Corporations in Indiana need to obtain a Certificate of Good Standing from their home state, appoint an Indiana registered agent and submit a Foreign Corporation Registration statement.

How to form a Nonprofit in Indiana

If your business solution is predicated on improving the lives of others, you should consider choosing a nonprofit structure. 

Naming your Nonprofit in Indiana

The business names of nonprofits in Indiana need to end in any of the following suffixes:

  • Corporation 

  • Incorporated

  • Company

  • Limited

  • Corp

  • Inc

  • Co

  • Ltd

Before registering your business name you should verify its availability.

Appoint a registered agent in Indiana

The process of appointing a registered agent for nonprofits is the same as the process for LLCs.

Submit Nonprofit Articles of Organization in Indiana

To register your non profit, you need to submit the Nonprofit Articles of Organization.  If you plan to also apply for Federal tax exempt 501(c)(3) status, you must include specific IRS standard statements in your Articles of Incorporation. For more guidance, refer to the section "Articles of Organization" on page 25 of this IRS document.

Host initial Corporate Meeting

All members should collaboratively create the bylaws that will govern the nonprofit, settle any pre-launch business transactions as well as any other matters that require attention prior to officially launching the business.

Apply for nonprofit tax exemption in Indiana

To obtain a 501(c) tax exemption with the IRS, nonprofits in Indiana need to file Form 1023 with the IRS. Smaller nonprofits may be eligible to submit the simpler Form 1023-EZ.

For more details on Indiana state tax exemption, refer to the Indiana Department of Revenue.

Registering for fundraising activities in Indiana

Charitable nonprofits in Indiana do not need to register before commencing any fundraising activities. Professional fundraising, however, must be registered with the Indiana Attorney General's office.

 

Protecting your business in Indiana 

Some recommended insurance policies for your startup in Indiana are:

Business owners policy (BOP)

This type of insurance policy combines both business property insurance and business liability insurance.

This policy can protect business owners from theft, fire, loss of income, lawsuits and data breaches.

Commercial property insurance 

This policy protects your business furniture and inventory in the event of a fire and theft

General liability insurance 

A general liability insurance policy protects your business against reputational damage, property damage, personal injury and copyright infringement claims from any advertising.

Business income insurance 

This insurance policy supplements any lost income while your business recovers from any damage to its processes.

Workers compensation insurance

This will ensure your employees get compensated in a timely manner in the event of any work related injuries.

Helpful resources for businesses in Indiana

Indiana Department of Revenue

Regsiter for state based taxes, submit taxation forms and access State rates 

Indiana Secretary of State

Helpful business setup resources and business registration portal. 

Small Business Development Center

This is a great resource for small business news, tips and advice, market research and industry-specific links.

Small Business Administration

The US Small Business Administration offers advice, advocacy and instruction for small businesses across the country.

Freelancer's Ultimate Guide to Starting a Business

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