Business & Finance Business & financial & corporate Law

How to Start a Collection Agency in Ohio

    • 1). Research the Ohio debt collection laws. It is important that you know the laws that will regulate your agency before you even open your doors. Ohio Legal Services can answer many questions on this topic.

    • 2). Register your business. Your name will be registered as a legal entity with the Ohio Secretary of State. Visit the Secretary of State's Business Services page, which contains information and forms to help you begin. Depending on the type of entity, this process may include registering an entity and registering a trade or service mark.

    • 3). Obtain a federal Employment Identification Number (EIN) through the Internal Revenue Service. The IRS has a convenient online application, or you can apply by phone (800-829-4933), fax (form SS-4 to 859-669-5760) or mail (Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH, 45999). The state of Ohio also requires one or more tax-specific identification numbers, licenses, or permits for tax withholding, sales and use tax, and unemployment insurance tax.

    • 4). Determine your collection agency location and set up your office. This type of business can successfully be operated from your home or another small office. You will need a computer with collections software, telephone, and some basic office furniture.

    • 5). Obtain a Certificate of Authority and pay state filing fees. There is no license or bond required in the state of Ohio for a collection agency, but a certificate of authority is required. More information about the Certificate of Authority can be found on the Department of Insurance page. State filing fees, as of 2010, are $225.00.

    • 6). Establish your plan for collections. This will include letters explaining the debts, follow-up phone calls, and certified letters. Consult the Fair Debt Collections Practices Act to ensure that your procedures are in line with the law concerning collecting debts. Join professional organizations like: The International Association of Professional Debt Arbitrators and the Association of Settlement Companies. The first offers training courses for a certified debt specialist certification, although this is not required for business in the state of Ohio.

    • 7). Hire employees, if necessary. Many businesses in Ohio perform background checks on new employees. Report your new hires to the state online at the Ohio New Hire Reporting Center.

    • 8). Create and implement a marketing plan to let your community know that you are open for business. Develop print materials (brochures, business cards, stationery) with information on your business and how your collections agency can serve local businesses and individuals. Contact people that you already know who can use your service or can refer you to someone who needs a debt collector. Consider a press release about your new business and offer to answer debt collection questions on a local radio show or community center.

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