This article provides three key state business startup requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Ohio Department of Taxation and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) personal legal names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the name they want to use is available in the state of Ohio. Start with a statewide corporate business name search to avoid legal problems and customer confusion or call the Business Services Division (877) 767-3453.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Ohio” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your state, county or city.
In Ohio, names are registered with the Secretary of State. Businesses in Ohio have a choice of registering a Trade Name or a Fictitious name. A registered Trade Name is used in business or trade to describe the business registered. A trade name must be different (“distinguishable upon the record”) from previously registered business names. The registered owner(s) of a registered Trade Name has right to exclusive use of that name. A registered Trade name cannot be used by any other business.
A Fictitious Name, is a name used in business or trade that the business owner(s) has not registered as a Trade Name or is not entitled to register as a Trade Name. Registration of a Fictitious Name does not give the business owner(s) any exclusive right to use the name. A registered Fictitious Name can be used by anyone. Both Trade Names and Fictitious Names must be registered with the state.
Business License Registration
Sole proprietors and general partners do not have to apply for a business license with the state of Ohio. Residential house cleaning businesses should check with the local city or county auditor’s office for licensing requirements. Find an Ohio county auditor. (Click on the county website and search for vendor’s licenses.)
In Ohio, a general partnership is created when two or more owners form an oral or written agreement to start a business together. It is advisable for general partners to file a Trade Name or DBA (“doing business as” name) with the state. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
General partners who choose to file paperwork with the state can file these forms and more (all are available from the Secretary of State’s Office):
• Statements of Partnership Authority
• Statutory Agent Updates (one of the partners must be chosen as the one person in the partnership that deals directly between the state and the partners).
• Cancellations of Partnership
• Dissociations and Dissolutions
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Register online through the Ohio Business Gateway.
Residential house cleaning services are taxable in Ohio. House cleaning services must collect and send sales taxes to the Ohio Department of Taxation.
Register for a Vendor’s License to collect and send Ohio sales tax to the state. Vendor’s licenses are issued by local County Auditors. A North American Industry Classification System (NAICS) Code for your house cleaning business is needed to apply for a Vendor’s License.
Once a business gross sales reach $150,000, they are required to register for and pay the Ohio Commercial Activity Tax (CAT).
Sole proprietors and general partners must pay Ohio State income tax only on their net earnings (income after expenses) through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in Ohio (on Form IT 1040ES) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Ohio Department of Taxation at (800) 282-1780.
Ohio general partnerships that file a Federal partnership information Form 1065, may need to file state income tax Form IT 1140P. Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected Ohio City Licenses
Akron Business License: https://www.akronohio.gov/cms/site/6648686af059795d/index.html
Canton Business License: https://www.starkcountyohio.gov/auditor/departments/vendor-licenses
Cincinnati Business License: https://www.cincinnati-oh.gov/finance/licenses-lost-check-affidavit/business-license-applications/
Cleveland Business License: https://fiscalofficer.cuyahogacounty.us/en-US/vendors-license.aspx
Columbus Business License: https://www.franklincountyauditor.com/consumer/licensing-types#vendors-license
Dayton Business License: http://www.mcohio.org/government/elected_officials/auditor/vendor_license.php
Parma Business License: https://fiscalofficer.cuyahogacounty.us/en-US/vendors-license.aspx
Toledo Business License: https://toledo.oh.gov/business/how-to-do-business-in-the-city/business-licenses