Overview
Getting an LLC in Kentucky involves a straightforward process. Below, we’ll guide you through the essential steps and provide factual answers to common questions.
How To Get An LLC In Kentucky: Step-By-Step
- Choose a Name for Your LLC:
- Choose a unique and available name for your LLC.
- Perform a Kentucky LLC name search through the Kentucky Secretary of State website.
- Reserve your chosen name if needed.
- Registered Agent:
- Appoint a registered agent with a physical address in Kentucky.
- File Articles of Organization:
- Complete the Kentucky LLC Articles of Organization form.
- File online through the Kentucky Secretary of State website or submit a paper application.
- Operating Agreement:
- Draft an operating agreement outlining the structure and operation of your LLC. Although not required by the state, it is highly recommended.
- Employer Identification Number (EIN):
- Obtain an EIN from the IRS for tax purposes.
- Register For The Limited Liability Entity Tax
- Every year, Kentucky LLCs are required to pay the Limited Liability Entity Tax (LLET).
- File the Beneficial Ownership Information Report:
- Beginning in 2024, Kentucky LLCs must submit a Beneficial Ownership Information (BOI) Report.
1. Choose A Name For Your LLC
Check if the name you desire for your Kentucky LLC is available in the state. This is important because no two businesses in Kentucky can share the same name.
To do this, use the Kentucky Secretary of State website Entity Search tool to compare your business name with existing ones in Kentucky.
Make sure your LLC name is unique by following Kentucky’s naming rules to increase the chances of your LLC name being approved.
If you need, you can reserve the name for your LLC for up to 120 days. The cost is $15.
2. Appoint Registered Agent
In Kentucky, you need to choose a registered agent for your LLC. This is the person or company allowed to get legal papers and important notices on behalf of your LLC.
Your registered agent can be a person, like yourself or one of your employees, or a company that offers this service.
The registered agent has to meet some requirements:
- If it is a company, it must offer registered agent services.
- The agent must have an address in Kentucky.
- The agent must be there in person and ready to get documents during regular business hours.
3. File Kentucky LLC Articles of Organization
To officially establish your Kentucky LLC, you need to file the Kentucky LLC Articles of Organization.
This document provides essential details about your LLC and serves as the official registration.
To prepare the certificate, gather the following information: your LLC name, the name and address of the registered agent, specify the type of your LLC business, and provide the effective date if different from the filing date.
The form is a straightforward online submission or can be sent by mail.
The Kentucky LLC Articles of Organization filing fee is $40.
Once filed, the Kentucky Secretary of State will review the document, and upon approval, your LLC attains legal business entity status.
You can undertake this process independently using our step-by-step guide or opt for the convenience of hiring a company for assistance.
>> Form your LLC with Bizee for $0 (plus state fee) <<4. Create An Operating Agreement
An operating agreement is a document that shows how your LLC will do business.
While Kentucky doesn’t make it a must, having one is crucial. It helps in different ways, like resolving money disputes or potential legal issues. Without it, the courts decide based on state laws, not necessarily what’s best for the LLC.
The agreement can include things like the LLC’s name, address, how long it will last, the registered agent’s details, info from the Articles of Organization, the business’s purpose, member contributions, how profits and losses are shared, rules for new and leaving members, how the LLC is managed, and clauses about protection and responsibility.
5. Obtain Employer Identification Number (EIN)
The Internal Revenue Service (IRS) gives your LLC a nine-digit number called an Employer Identification Number (EIN) to identify it for taxes. You can get your EIN by mail or online through the IRS.
This number helps you:
- File and handle taxes at both the state and federal levels.
- Open a bank account for your business.
- Apply for permits and licenses.
- Hire employees.
Obtaining an EIN is FREE.
6. Register For The Limited Liability Entity Tax
Annual registration for the Limited Liability Entity Tax (LLET) is mandatory for all Kentucky LLCs. LLCs with earnings below $3 million are subject to the minimum tax of $175 per year, a common requirement.
For those surpassing the $3 million threshold, the tax amount is calculated using the state’s sliding scale. Registration for the LLET can be done online through the Kentucky DOR Business Portal.
7. File The Beneficial Ownership Information Report
Starting in 2024, many Kansas LLCs must now file an extra document at the federal level, known as the Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN).
This report mandates disclosing information about your company applicant and all beneficial owners to FinCEN. You can submit it online using the Beneficial Ownership Secure System (BOSS) or opt for a professional service to handle it for you.
Review: What Is Needed To Form An LLC In Kentucky?
To form an LLC in Kentucky, you need:
- A unique LLC name.
- Articles of Organization
- Registered Agent information.
- Operating Agreement (recommended).
- Employer Identification Number (EIN).
What Forms Do You Need To Get An LLC In Kentucky?
- Application to Reserve LLC Name
- Articles of Organization (online)
- Articles of Organization (PDF)
- EIN Application Form
- BOI Form
How Much Does It Cost To Start An LLC In Kentucky?
The cost to start an LLC in Kentucky involves several steps, each with its own associated fees:
- Articles of Organization Filing Fee: $40
- Name Reservation Fee (if needed): $15
- Annual report: $15
- LLET Tax: $175
What Is The Kentucky LLC Annual Report?
In Kentucky, LLCs need to file a business entity report every year by June 30th, starting one year after formation.
The Annual Report, required for doing business in the state and keeping information about the business up to date, has a fee of $15.
How Long Does It Take For An LLC To Get Approved In Kentucky?
If you send your LLC application by mail, it will be approved in 1-3 business days, plus the time it takes for the mail (1-2 weeks in total).
However, if you file online, your LLC can be approved right away.
What Are The Benefits Of Getting An LLC In Kentucky?
- Limited liability protection for members
- Pass-through taxation
- Flexible management structure
- Credibility for business transactions
Is Kentucky A Good State To Get An LLC?
Whether Kentucky is the right state for your LLC depends on where you live and do business. If you live or operate in Kentucky, it makes sense to start your LLC there.
The state does impose an annual Business Entity Tax on LLCs, which can have a negative effect on small businesses.
Getting An LLC In Kentucky: Next Steps
Once your LLC is registered, you can:
- Get the permits and licenses you need for your business, like health or zoning permits.
- Register your business with the state’s tax agency.
- Open a business bank account.
- Apply for a business credit card.
- Buy insurance for your business.
- Safeguard your name and logo with a trademark.
To maintain your LLC in Kentucky, you must:
- File the business entity registration and pay the LLET tax by the due date.
- File the Annual Report to keep the LLC in good standing.
- Update any changes to the registered agent or business address promptly.
- Pay Taxes (owners file their individual tax returns)
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Conclusion
Forming an LLC in Kentucky involves a few key steps, from name reservation to obtaining an EIN.
Carefully following the process ensures a smooth establishment of your LLC.
For more detailed information and to access the necessary forms, visit the Kentucky Secretary of State website.
