Ohio offers real estate investors one of the nation's most streamlined entity compliance environments: no annual reports, no franchise tax, and no minimum tax for entities under $6 million in receipts. Yet even in this simplified landscape, maintaining good standing with the Ohio Secretary of State remains non-negotiable. When you're closing on a property and discover your LLC isn't in good standing, title companies won't proceed, and that streamlined advantage becomes meaningless.
Title companies verify entity status before closing, and "not in good standing" status kills your deal. Under ORC §1706.46, LLCs that fail to maintain compliance risk administrative cancellation, terminating your legal authority to transact new business in Ohio.
LLCs represent the most popular entity structure for real estate investors in Ohio, governed by ORC Chapter 1706. Formation requires filing Articles of Organization with a one-time filing fee of $99.
Real estate investors favor LLCs because they provide liability protection separating personal assets from property-related claims, while maintaining pass-through taxation that avoids double taxation. ORC §4735.01(I)(1)(a) exempts LLCs managing their own real estate holdings from broker licensing requirements. The minimal formalities compared to corporations (no required board meetings or officer elections) reduce administrative burden for portfolio management.
ORC §1706.16 requires no member or manager disclosure in formation documents, providing strong ownership privacy. Only the entity name, statutory agent information, and organizer details appear in public records.
Corporations operate under ORC Chapter 1701 with the same $99 filing fee as LLCs. While less common for small property portfolios, corporations serve specific real estate purposes: larger operations seeking institutional investment, development companies raising capital from multiple investors, or businesses planning eventual public offerings. ORC Chapter 1726 authorizes Development Corporations specifically for real estate development.
Ohio authorized Series LLCs effective February 11, 2022, through ORC §§1706.76 through 1706.7613. This structure allows multiple properties under one LLC umbrella while maintaining liability protection between series.
According to ORC §1706.761, "debts, liabilities, obligations, and expenses incurred by a particular series are enforceable against only the assets of that series and not against the assets of the LLC generally or any other series."
Instead of managing twenty separate LLCs (each requiring $99 formation fees, individual statutory agents, and separate records), a Series LLC allows all properties under one entity with internal series separation. Each property can constitute a separate series with isolated liability.
Real estate entities formed outside Ohio must register as foreign LLCs before transacting business in the state under ORC §1706.511. However, ORC §1706.512 provides critical safe harbors: "owning, without more, real or personal property" does NOT constitute transacting business requiring registration.
Operating rental properties as ongoing business, active property management services, or regular real estate transactions do trigger registration requirements. The registration fee is $99, and according to Form 617 instructions, documents received by 1:00 PM are processed within 4 hours.
ORC §1706.515 establishes that unregistered foreign LLCs cannot maintain legal proceedings in Ohio courts until registered. You cannot sue to collect debts or enforce contracts while unregistered, though you can still defend against lawsuits.
Ohio provides straightforward entity formation with transparent fees and clear requirements. The process requires minimal documentation and offers expedited options for urgent transactions.
Ohio does not require annual reports for LLCs. According to the Ohio Secretary of State FAQ, standard LLCs and corporations face no periodic filing obligations with the state. This absence of recurring reports means no annual state filing fees beyond the initial $99 formation cost.
Unlike many states that impose annual or biennial report requirements with associated fees and deadlines, Ohio eliminates this administrative burden entirely. You avoid tracking anniversary dates and submitting recurring compliance filings, resulting in lower ongoing costs.
Ohio eliminated its Corporation Franchise Tax after the 2013 tax year and replaced it with the Commercial Activity Tax (CAT), governed by ORC Chapter 5751.
Current tax structure (2025 and beyond):
New businesses with Ohio taxable gross receipts at or below $6 million are completely exempt from CAT liability and do not need to register or file. Businesses with existing CAT accounts that now fall below the $6 million threshold should cancel their accounts to avoid filing quarterly zero-dollar returns. According to ORC §5751.01(F), rental income from Ohio properties counts toward the threshold, but property sales typically don't as they're excluded as capital asset dispositions.
Entities exceeding the $6 million threshold must register with the Ohio Department of Taxation within 30 days and file quarterly returns through the Ohio Business Gateway. All CAT filings and payments must be electronic.
Note: Discern provides notifications about Ohio Commercial Activity Tax filing deadlines with guidance and links to file through the Ohio Business Gateway. CAT filings are typically completed by a tax accountant rather than through Discern's entity management platform.
House Bill 301, effective October 24, 2024, amended Ohio's nonprofit corporation laws regarding dissolutions and director duties but maintained the state's policy of no annual reports for LLCs and standard corporations. Recent Commercial Activity Tax legislation eliminated the annual minimum tax requirement starting in tax year 2024. Senate Bill 94, effective June 30, 2026, mandates electronic recording and indexing of recorded instruments by county recorders, modernizing document submission processes but not adding periodic reporting requirements.
Every Ohio LLC and corporation must maintain a statutory agent with a physical street address in the state. Ohio uses the term "statutory agent" rather than "registered agent" in all official filings and statutes. The statutory agent receives service of process, tax notices, and official state correspondence on behalf of your entity.
According to ORC §1706.09:
Properties sell, addresses change, and missing critical notices can kill transactions. Professional statutory agent services maintain stability across your portfolio regardless of property transactions, ensuring someone is reliably available to receive legal notices during normal business hours while keeping personal addresses off public records.
For real estate businesses managing multiple property LLCs, each entity must maintain a separate statutory agent. However, the same professional statutory agent service can handle all your entities through centralized administration.
Real estate investors repeatedly make the same compliance mistakes that threaten transactions and create legal exposure. The most common failure involves statutory agents: using personal addresses that change when you sell properties or relocate, failing to update agent information after the original agent resigns or moves, or simply missing critical legal notices because no one is reliably checking the statutory agent address. When you discover your statutory agent hasn't received service of process for a tenant lawsuit, you've already defaulted on response deadlines.
A common failure occurs when investors form an out-of-state LLC, purchase Ohio rental properties, and operate for years without registering as a foreign LLC. This creates immediate problems when they need to sue tenants for unpaid rent or enforce lease provisions. Under ORC §1706.515, unregistered foreign LLCs cannot maintain proceedings in Ohio courts until they register. The "owning, without more, real or personal property" exemption under ORC §1706.512 protects passive ownership, but active rental operations cross into transacting business that requires registration.
Letting cancelled entities remain unfixed represents another critical failure. When an LLC is cancelled by the Secretary of State, investors often assume they can address it later, but ORC §1706.09 imposes a strict two-year reinstatement window. After that deadline, cancellation becomes permanent, and you cannot revive the entity under any circumstances. Properties held in permanently cancelled entities require transfers into new structures with all associated costs and complications. Finally, investors frequently fail to update statutory agent information when selling properties that housed the original agent address or when team members serving as agents leave the organization, creating gaps where official notices disappear into the void.
Even in Ohio's simplified compliance environment, managing statutory agents across a growing portfolio of property LLCs creates administrative burden that compounds with each acquisition. Coordinating foreign registrations when expanding into new states, requesting certificates of good standing for closings and refinancings, and maintaining current records for each entity consumes hours that should be spent evaluating deals or managing properties.
Discern automates entity compliance management in under 3 minutes per filing, whether you're managing 5 properties or 200+. Our platform provides registered agent services, automated compliance tracking, certificate of good standing requests, and real-time visibility across your entire portfolio, so you never miss a critical deadline that threatens a closing or refinancing. Ready to eliminate compliance burden for your Ohio real estate entities? Book a demo with Discern today to see how we streamline entity management for real estate portfolios across all 51 jurisdictions.
Most small to mid-sized real estate investors should form LLCs rather than corporations. LLCs provide identical liability protection (separating personal assets from property-related claims) while offering significant advantages for real estate operations. Pass-through taxation means the entity itself pays no federal income tax; profits and losses flow directly to members' personal returns, avoiding the double taxation corporations face. LLCs also maintain minimal formalities: no required board meetings, no officer elections, no annual shareholder meetings. This reduces administrative burden across property portfolios.
Corporations serve specific real estate scenarios: larger operations requiring formal governance structures for institutional investors, development companies raising significant capital through multiple stock classes, or businesses planning eventual public offerings. Ohio's $99 formation fee applies equally to both entity types, so cost doesn't factor into the decision.
Ohio offers exceptionally low annual compliance costs compared to other states. State-level costs total $0 annually because Ohio requires no annual reports for LLCs or standard corporations, charges no franchise tax (eliminated after 2013), and imposes no minimum Commercial Activity Tax for entities below $6 million in gross receipts.
Your only recurring costs come from optional services: professional statutory agent services typically range from $100-$300 annually per entity. For a typical small property holding LLC with rental income under $6 million, total annual state compliance costs remain at $0, with only optional statutory agent fees if you choose professional services rather than self-designation.
An LLC that loses good standing faces administrative cancellation under ORC §1706.46. This terminates your legal authority to transact new business in Ohio, prevents maintaining lawsuits, and can delay property transactions. Reinstatement requires filing corrective documents, paying a statutory fee of $25 per ORC §111.16(Q), obtaining tax clearance from the Ohio Department of Taxation per ORC §5733.22, and filing within two years of cancellation. After two years, cancellation becomes permanent.
According to Form 617 instructions, documents received by 1:00 PM are processed within 4 hours, while documents received after 1:00 PM are processed by noon the following business day. Expedited processing is available for $100-$300 depending on urgency, with the fastest option (Level Three at $300) guaranteeing 4-hour processing. The base registration fee is $99.
Does Ohio require annual reports for LLCs?
No. Ohio does not require annual or biennial reports for LLCs or standard corporations. According to the Ohio Secretary of State, the only recurring compliance requirement is maintaining a current statutory agent. This eliminates ongoing state filing fees and reduces administrative burden compared to most other states.
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