Business Registration & Taxes

Starting a food business requires an understanding of important details and doing things the right way. When you’re just getting started this means choosing the right business structure, registering your business correctly, and making sure you’re set up to pay the right taxes to the right government agencies. This will set a strong foundation on which to build your successful business!

Choosing the right legal structure for your business will be one of the most important decisions you will make.

It will affect day-to-day operations, taxes, and whether your personal assets are at risk. Each type of business structure offers a different balance of legal protections and benefits. We recommend consulting with an attorney, accountant, and/or business support expert before making a final decision on which business structure is right for you. You can find information about attorneys and accountants on the Professional Services page. Schedule a no-cost business advising phone appointment with Small Business Development Center (SBDC) for additional assistance.

Here are a few helpful overviews of different business legal structures:

Small Business Administration (SBA) - Choose a Business Structure
Useful overview of the various options for a business legal structure, including Sole Proprietorship, Partnership, Limited Liability Company (LLC), C corp, S corp, B corp, Close corporation, Nonprofit corporation, and Cooperative
FindLaw - Incorporation and Legal Structures
Overview of business legal structures and implications for various liabilities, tax obligations, and investment needs
Ohio Secretary of State - Glossary of Business Entities
Glossary of terms and definitions related to business legal structures in the State of Ohio
Benefit Corporation
Overview of the structure and function of B corps, which are accountable to shareholders to produce both profit and some public benefit. Currently there is no legal status for B corps in Ohio but you can be certified as a B corp by this organization.
Social Enterprise Alliance (SEA) - What is a Social Enterprise?
Overview of social enterprises, examples, and resources for how to structure a social enterprise
Ohio Secretary of State - Starting a Nonprofit in Ohio
Guide to starting a nonprofit corporation in Ohio, which are tax-exempt corporations that cannot distribute profits to owners. The IRS has strict requirements for tax-exemption, including that the organization must be operated for exempt purposes and none of its earnings may not benefit private interests.
Co-OpLaw.org - What are Cooperatives?
Overview of cooperatives as a business structure, tax category, and a set of practices and values. Cooperatives are owned and operated by worker-owners, who receive the cooperative’s profits. CFAES Center for Cooperatives has a variety of resources and services for cooperatives, including expert business counseling and business planning assistance, online training, and a directory of legal and accounting resources.
Farm Commons - Business Structures
Provides an overview of various business structures for farmers, including the what, how, and why.
Ohio Employee Ownership Center (OEOC)
Provides outreach, information, and preliminary technical assistance to Ohio employees and business owners interested in exploring employee ownership.

Once you’ve chosen the right Ohio business legal structure then you’re ready to choose a business name, register your business, obtain an employee identification number (EIN), and set up your business taxes - review the sections below for information and resources to take these next steps. The Ohio Business Gateway - Starting Your Business in Ohio and the Ohio Business Road Map will also assist you with these steps and more.

Checklist

Understand options for structuring your business

Choose a business name

Set up and pay federal, state, and local taxes

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Resources

To register your business with the State of Ohio you must choose a unique name for your business and then search the Ohio Secretary of State’s Online Database to make sure that name is available. If another business is using that name then you’ll have to select a different name. If no one has taken your chosen name then you’re ready to register your business!

The Ohio Secretary of State maintains a Filing Forms & Fee Schedule page that provides all the relevant forms and fees for registering a business or updating an existing business registration in the State of Ohio. On this page you will find forms and fees for domestic business entities, foreign business entities, for profit entities, nonprofit entities, cooperatives, name registrations, trademarks, trusts, mergers, and more.

Once you have identified and filled out the relevant forms you can submit the forms and the appropriate payment at Ohio Secretary of State - Ohio Business Filings. Please note that you will have to create an onlin account to submit the forms. If you have any issues or questions you can refer to the Ohio Secretary of State’s extensive Frequently Asked Questions page for additional assistance.

For businesses that plan to hire employees, the Ohio Secretary of State recommends checking with the state agencies below to determine additional any additional steps. Additionally, you may schedule a no-cost business advising phone appointment with Small Business Development Center (SBDC) for additional assistance and expert advice.

Ohio Bureau of Workers’ Compensation (BWC) - In general, Ohio employers with one or more employees must have workers’ compensation coverage. Employers must submit a completed application for Ohio Workers Compensation Coverage (Form U-3) and the non-refundable application fee. The BWC maintains a Frequently Asked Questions page with additional details.
Ohio Department of Jobs & Family Services (ODJFS) - Most Ohio employers are liable to pay unemployment taxes and report wages paid to their employees. ODJFS provides information on registering as an employer, relevant forms, a Frequently Asked Questions page, and an Employer’s Guide to Ohio Unemployment Insurance.

Federal, State, and Local Taxes

All for-profit businesses are responsible for remaining compliant with relevant federal, state, and local taxes. We strongly recommend that you consult with a professional accountant and/or attorney to determine your applicable federal, state, and local tax requirements. Please refer to the Professional Services page for legal assistance resources.

Federal Taxes

Most businesses will need a federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The IRS - Do You Need an EIN? page will help you determine whether your business needs an EIN. The EIN application is free and must be completed during one session. After all the validations are finished you should receive an EIN for your business. If you have any questions the IRS maintains a Frequently Asked Questions page for the online EIN application.

There are a number of federal employment taxes. All employers must deposit and report applicable employment taxes to the IRS, including Federal Income Tax, Social Security and Medicare Taxes, Additional Medicare Tax, and Federal Unemployment Tax. Self-employed individuals are liable for the Self Employment Tax. The IRS maintains guides to the following:

Employer’s Tax Guide - Federal tax filing requirements that apply to small businesses
Understanding Employee vs. Contractor Designation - Proper classification of workers and tax implications
Reporting and Depositing Due Dates
Employment Tax Forms
Employment Tax Publications
Understanding Taxes - Glossary

State and Local Taxes

All Ohio for-profit businesses must register with the Ohio Department of Taxation. The Ohio Department of Taxation offers a free online Small Business Tax Workshop which provides greater detail on the types of taxes for which small businesses are liable and how to ensure full compliance. The Ohio Department of Taxation also maintains a Business Registration Guide, a Small Business Tax Training Manual, and a list of taxes administered by the State of Ohio.

The best way to get started is by creating an account with the Ohio Business Gateway. The Gateway will allow you to register, submit forms, and make payments for state and local taxes, including Sales & Use Tax, Employer & School District Withholding Tax, and Commercial Activity Tax. The Get Started Using The Gateway resource provides tips and tutorials on getting started with the Ohio Business Gateway. If you don’t feel comfortable using an online service there are also limited business registration services available via phone.

Here’s a brief overview of the most common types of state and local taxes for businesses:

Sales & Use Tax - Applies to the retail sale, lease, and rental of “tangible personal property” as well as the sale of selected services in Ohio
- Ohio businesses making taxable retail sales need a Vendor’s License which can be obtained through the Ohio Business Gateway. Using a Vendor’s License you can file and pay these taxes using via phone, internet, or the Ohio Business Gateway.
- License and Filing Requirements
- Sales & Use Tax FAQ
- Bars and Restaurants - Specific additional requirements
Employer & School District Withholding Tax - Ohio businesses are responsible for withholding Ohio income tax and school district income tax from their employees’ pay. Ohio income tax withholding is required for all employees but school district income tax withholding is only applicable for employees who reside in a school district that has enacted such a tax.
- Employer Withholding - Table of Contents - Details on tax filing guidelines, school district tax rates, and due dates on the page.
- Register, file, and pay these taxes via phone, internet, or the Ohio Business Gateway.
- Employer & School District Withholding FAQ (link)
Commercial Activity Tax (CAT) - The CAT is an annual tax that must be paid by businesses whose gross receipts from business activities in Ohio amount to $150,000 or more in the calendar year. There are additional requirements for businesses with over $1 million dollars in gross receipts in the calendar year.
- Applicable businesses must register for the CAT on the Ohio Business Gateway, file returns, and make the necessary payments. TeleFile allows filing via phone.
- Commercial Activity Tax FAQ (link)
Ohio Unemployment Tax - Most Ohio employers are liable to pay unemployment taxes and report wages paid to their employees on a quarterly basis.
- Ohio Department of Jobs & Family Services (ODJFS) - Registering as an Employer provides a list of forms, a Frequently Asked Questions page, and the Employer’s Guide to Ohio Unemployment Insurance
Local Income Tax - Most municipalities and even some townships will administer a local tax on businesses with employees working in that municipality. Businesses operating in a given municipality must withhold local income taxes from their employees’ pay and ensure payment to the proper municipality. Please check with the municipality or municipalities where your business will operate to ensure that your business is in full compliance with local income tax.
- If your business will be operating within the City of Columbus you can find relevant information on their website, including information for new employers, forms for employers, and additional tax forms for businesses.

The Ohio Department of Taxation maintains an online tool for employers called The Finder, which provides information on local tax jurisdictions and tax rates for all addresses in Ohio, including for municipal tax income, school district income tax, and the sales & use tax.

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Business Registration & Taxes