How to start a business in Indiana [Updated 2024]

With a low cost of living and business-friendly taxes, Indiana offers plenty of opportunities for up-and-coming entrepreneurs. In fact, the Hoosier State consistently achieves high rankings on lists of states that offer favorable conditions for starting a business—like the 2023 top 10 business tax-friendly states (Indiana came in at No. 9).

But, there’s more to starting a company than just coming up with a great business idea. You need to create a solid business plan, register your business with the Indiana Secretary of State, stay on top of tax filing requirements, and much more.

Ready to learn about starting a business in Indiana? Read on.

1. Name your business

One of the first steps you’ll need to take is naming your new business. Even more important than choosing a business name that stands out is making sure it complies with all of Indiana’s regulations. Here’s what you need to do:

• Make sure your chosen business name is available and distinguishable from the names of existing businesses in the state by searching the Indiana Secretary of State website.
• Make sure it follows all applicable laws for naming Indiana businesses.
• Search the US Patent and Trademark Office to make sure your business name hasn’t been trademarked by someone else.
• Either register your business with the Secretary of State or submit a name reservation application to hold the name for 120 days while you prepare the rest of your business application. Both can be done via the InBiz portal on the Indiana Secretary of State website. You’ll need to create an Access Indiana account first. 

Once you’ve chosen your business name, this is a good time to think about your business website and social media accounts. Consider securing a domain name and social media handles with the same name.

In some cases, you may also need to file an assumed business name (also called a DBA) with the county recorder in the county where you will be doing business. This is the case when:

• Your business is a sole proprietorship that uses a business name that is different from the legal name of the business owner.
• Your business is a partnership that uses a business name that is different from the surnames of the individual partners.
• Your business has one legal name registered with the state but operates under a different public-facing name when interacting with customers.

2. Explore your funding options

There are many ways to fund a small business, whether you bootstrap it with personal savings or seek out investors to help cover your startup costs. Indiana also offers resources for small business owners that can help connect you with state and federal loans and grants to fund your business. Here are some that are worth looking into:

• Indiana Small Business Development Center. The Indiana SBDC offers no-cost business advising, training, tools, and other resources to help businesses start, grow, and scale. 

• Indiana angel investors and VCs. There are many investor networks and groups based in Indiana that seek out local businesses to support and invest in. Some to look into include:
• Central Indiana Community Foundation
• Elevate Ventures
• Powderkeg's Innovate Indiana Fund

• Federal loan programs. The Small Business Administration (SBA) is a great resource for starter loans, grants, business coaching, and more. Learn more about available resources at the SBA’s Indiana page.

3. Decide on your business structure 

In Indiana, there are eight types of business entities that are recognized by the state, and it’s up to business owners to consider the specifics of each one to choose the structure that best suits their business. 

Here are the eight types of business formations in Indiana:

4. Register your business in Indiana

If you’re setting up a sole proprietorship or general partnership, you don’t have to register your business with the Indiana Secretary of State. Otherwise, you’ll need to register and pay a filing fee. Here’s what to do, depending on the type of business structure you’ve chosen:

5. Decide on a registered agent

If you form a corporation or LLC in Indiana, you’re required to declare a registered agent—someone based in Indiana who can accept formal correspondence, like tax and other business documents, on behalf of the company.

If you’re an Indiana resident, you can be your own registered agent. Otherwise, you can enlist a registered agent service. Many are available, and they typically cost between $60 and $150 per year.

6. Apply for an Employer Identification Number

No matter which state your business is based in, you’ll need a federal Employer Identification Number before you can hire employees. Think of it like a Social Security number for your business—it’s a unique, nine-digit number issued by the IRS that you’ll need when applying for a bank account, business loan, paying taxes, and paying employees.

It’s fast, easy, and free to get an EIN: All you need to do is fill out Form SS-4. Then, submit it to the IRS.

7. Get up to speed with Business Tax Credits

According to the Tax Foundation, Indiana ranks ninth in the US in the 2023 State Business Tax Climate Index. Its 4.9% corporate tax rate is pretty average compared to other US states—what sets Indiana apart is its incredibly low property tax rates, which contribute to the affordable cost of living in the state.

So, while your property tax bill may be low, you might want to look for ways to reduce your business tax burden in Indiana. These business tax credits can help:

• Hoosier Business Investment (HBI) Tax Credit: A non-refundable corporate income tax credit of up to 10% of a qualifying investment unrelated to logistics or up to 25% of a logistics-related investment. Qualifying investments can include purchases or construction in telecommunications, manufacturing, distribution, transportation, and more.
• Economic Development for a Growing Economy (EDGE) Tax Credit: A refundable tax credit of up to 100% of the expected incremental tax withholdings generated by businesses that create new jobs that improve the standard of living for Indiana residents.
• Research and development tax credits: The Indiana Economic Development Corp offers 100% sales tax exemption for property and equipment purchased by Indiana companies doing qualifying innovative work.

8. Stay on top of filing requirements and taxes

Every business in Indiana is required to file routine business entity reports with the Secretary of State in order to stay in good standing. For all business types, these must be filed every two years. They are due during the anniversary month of your business’s formation. The Secretary of State will send a courtesy reminder to your registered agent the month that your business entity report is due.

You are also required to update your business entity report with the Secretary of State when certain changes occur in your business, like if you change your name, number of shares, DBA, or registered agent.

All businesses registered in Indiana must pay taxes—both state and federal. The forms you use to file your tax returns will vary depending on your business structure:

• Sole proprietor: Sole proprietors report their business income on their individual tax returns using an IT-40 form.
• General partnership: General partnerships report their income on an IT-65 form. Individual partners also report their own income using IT-40 forms.
• Limited liability partnership: LLPs submit the same forms as general partnerships.
• Limited partnership: LPs submit the same forms as general partnerships.
• Corporation: Indiana corporations must file IT-20 forms.
• S corporation: S corporations must file IT-20 forms. Shareholders and/or employees must file IT-40 forms.
• Nonprofits: Nonprofits must first obtain tax-exempt status from the IRS by submitting Form NP-20A. Once tax-exempt status is granted, they can file a yearly form IT-20NP and NP-20.
• Limited liability companies: Indiana LLCs are only taxed once. They should file one of the following forms: IT-40, IT-40PNR, or IT-65.

9. Find a payroll solution

As your business grows, you may need to hire employees or contractors to handle the workload. But that comes with new considerations: You have to be sure you’re classifying workers correctly or risk huge fines. You also need to make sure you follow overtime rules—for example, workers in Indiana are entitled to 1.5 times their normal hourly wage if they work more than 40 hours in a week.

The best way to make sure you’re compliant with local laws and can pay your employees and contractors on time is with payroll software like Rippling. Additionally, Rippling Time & Attendance automatically tracks employees’ hours and notifies you whenever employees approach overtime.

And if your business hires globally, Rippling has that covered, too: 

• Pay all employees across different tax jurisdictions and currencies in a single pay run. 
• Include hourly and salaried employees along with contractors. 
• Manage all of your people, systems, and data around the world in one place.

10. Support and scale your growing business with Rippling

As you scale your business, you’ll need an HRIS (Human Resource Information System). An HRIS streamlines tasks like recruiting, onboarding, running payroll, administering benefits, and much more. 

If you plan to grow your business globally, Rippling has everything you need to manage your global workforce—in one system. 

• Hire, pay, and manage your people—all over the world.
• Stay locally and federally compliant no matter where you hire.
• House your benefits—health insurance, 401(k), commuter, and more—in a single system. 
• Effortlessly manage your recruiting data—from open positions to new hires—and automate every step of the hiring lifecycle. 
• Have a single source of truth for every aspect of HR, including analytics, policies, and more.

FAQs about setting up a business in Indiana

Do I need a business license in Indiana?

This depends on the type of business you want to start. Indiana doesn’t have a single, comprehensive business license. However, there are professional licensing requirements for some business types, including:

• Serving, selling, or manufacturing alcoholic beverages
• Handling and processing foods
• Child care
• Financial services
• Transportation of passengers or regulated goods

There are other businesses that may require licenses, including specifically regulated professions like accountancy, architecture, medicine, and law. Learn more in the state business owner’s guide to licensing and permitting.

Do I need a business bank account when launching a business in Indiana?

If you have a certain type of business, like an LLC, you’re required to have a business bank account to maintain your liability protection. But even if it’s not specifically required—like if you have a sole proprietorship—you should consider opening a specific business bank account and applying for a business credit card so you can completely separate your personal and company finances.

Do I need to get business insurance?

Whether you should get insurance (and what type) depends on your business needs. Many businesses should consider at least a small general liability insurance policy (or professional liability insurance for those who offer professional advice or services).

If you hire employees, you’ll be required to purchase workers’ compensation insurance, which covers medical costs and disability benefits if an employee becomes ill or is injured on the job.

What are Indiana’s state payroll taxes?

Indiana’s state payroll taxes include state unemployment insurance (SUI), state income tax, and county income tax. Employers are responsible for contributing to the SUI.

Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.