Are you preparing to launch a business in Oklahoma and thinking about creating an LLC? A common business structure is an LLC, which provides its owners with limited liability protection and a flexible management structure. Before creating an LLC, you must, however, be aware of the expenses, taxes, and drawbacks of doing business in Oklahoma as an LLC.
The filing charge, registered agent fee, and publication fee are just a few of the components that determine how much it will cost to incorporate an LLC in Oklahoma. The $100 filing fee for an LLC in Oklahoma is due to the Oklahoma Secretary of State as of 2021. You must also designate a registered agent who will accept legal paperwork for the LLC. Depending on the service provider, the annual registered agent price typically ranges from $50 to $300. You can avoid paying that fee since Oklahoma does not require LLCs to publish their formation notice in a newspaper.
You must do the following actions in Oklahoma in order to form an LLC:
1. Pick a name: The name of your LLC must be distinctive and distinct from any existing business names that have been registered in Oklahoma. On the website of the Oklahoma Secretary of State, you may determine whether the name you want is available.
2. Designate a registered agent: Your LLC has to appoint a registered agent who will accept legal notices and paperwork on the company’s behalf. Either a person or a registered agent service provider might be chosen.
3. File your articles of organization with the Oklahoma Secretary of State and pay the $100 filing fee. 4. Draft an LLC Operating Agreement. Although not required by law, this document describes the internal policies and governance framework of the LLC. 5. Obtain the relevant licenses and permits: Depending on the nature of your business, you might need to apply for licenses and permits from state and municipal organizations.
LLCs in Oklahoma must pay both federal and state taxes. Oklahoma does not, however, tax LLCs at the state level like some other states do. Instead, Oklahoma LLCs must pay the state’s franchise tax, which is determined by the LLC’s net value or the amount of capital it uses in the state. Each $1,000 of taxable capital is subject to a $1.25 franchise tax. Federal taxes, such as income tax, self-employment tax, and employment tax, are also levied against LLCs in Oklahoma. What are the drawbacks of an LLC?
An LLC has several drawbacks in addition to its benefits, such as limited liability protection and a flexible management structure. The self-employment tax that LLC owners must pay on their portion of the company’s revenues is one of the main drawbacks of an LLC. A franchise tax that certain states, like Oklahoma, levy on LLCs can also be a major burden for some businesses. The paperwork and continuous compliance involved in creating an LLC can be a hassle for some business owners.
Yes, Oklahoma LLCs must pay the state’s franchise tax, which is determined by the LLC’s net value or the amount of capital it uses in Oklahoma. The franchise tax is payable yearly on July 1st and is calculated at a rate of $1.25 per $1,000 of taxable capital. LLCs having a net worth of under $1,000,000 are exempt from the franchise tax. Other taxes, including sales tax, use tax, and employment taxes, are also levied against LLCs in Oklahoma.
The last requirements for forming an LLC in Oklahoma are designating a registered agent, establishing an operating agreement, and paying a $100 filing fee. Although there is no state income tax in Oklahoma, LLCs are liable to the state’s franchise tax. While an LLC has many benefits, there are some drawbacks as well, including the self-employment tax, ongoing compliance, and paperwork. It’s critical to assess the benefits and drawbacks and speak with a reputable expert before establishing an LLC.