Some banks and vendors may require this filing to prove the existence of the partnership. While not required in order to conduct business in the state of Ohio, the Statement of Partnership Authority may be filed with the Ohio Secretary of State. This income is subject to self-employment tax.

Instead, profits and losses are passed through to the owner’s personal tax return. The partnership itself does not pay tax from business income. If the partnership were to be sued, the partner’s personal assets are equally at risk. Like the sole proprietorship, the partnership has unlimited liability. General Partnerships consist of two or more people conducting a business together. Another potential downside is that the owner will pay self-employment tax on all business profits and may be more costly than some other entities. If the business is sued, the owner’s personal assets are potentially at risk. The ease of startup is a big selling point however, a major downside to the sole proprietorship is that the owner is personally responsible for all debts and actions of the company. This is the easiest and least expensive of the four entities to set up as there is no state filing. A brief description of each is below.Ī Sole Proprietorship is an individual that decides to go into business. There are four primary business entities: sole proprietorship, partnership, corporation, and Limited Liability Company (LLC). The business entity is sometimes referred to as a business structure or legal entity, which refers to how a business is legally organized. The next step to starting a business in Ohio is selecting a business entity.

How to get ohio business license