Fried Chicken. The Kentucky Derby. Bourbon and college basketball. Kentucky is known for many things including the stunning Cumberland Falls.
So, you’ve chosen to take the leap and are now wondering how to establish a limited liability company in the Bluegrass State. What are the exact steps however? We’ve laid out the whole process, including all the necessary clicks, costs, and paperwork, specifically for companies in the Bluegrass State of Kentucky.
In addition to its many other advantages, a limited liability corporation (LLC) provides small enterprises with protection from legal responsibility and favorable tax treatment. Follow these easy steps to get your limited liability company (LLC) up and going in Kentucky if you’ve decided that an LLC is the most suitable corporate structure for your requirements.
Note that you have the option of forming the limited liability company (LLC) yourself, or you may engage a reputable company formation agency to do all of the legwork on your behalf.
1. Give Your Kentucky LLC a Name
When choosing a name for a limited liability company (LLC) in the state of Kentucky, there are two primary rules that must be followed:
- The Kentucky Secretary of State requires that the name of a limited liability company be different from the names of already existing firms.
- One of the following terms or abbreviations must be used in the name of a limited liability company (LLC): “Limited Liability Company,” “Limited Company,” “LLC,” or “LC.” The wording “Limited Company” may be abbreviated to “LTD CO.” in several situations.
Make a reservation for the name of your limited liability company with the Kentucky Secretary of State.
After deciding on a name for your limited liability company (LLC), you can make a reservation for it with the Kentucky Secretary of State for a period of up to one hundred and twenty days. This will ensure that the name is still available when you are ready to submit the Articles of Organization for your LLC.
First, enter the name you want to use for your limited liability company into the Kentucky FastTrack Business Organization Search to see whether it is one of the options available.
In the event that the name may be utilized, you will need to submit an application for the reservation or renewal of the reserved name either online or via the mail. The filing cost is fifteen dollars.
2. Choose an agent who is registered to do business in Kentucky
Every limited liability company in the state of Kentucky is required to establish a local agent where legal documents may be served. If a lawsuit is filed against the limited liability company, this refers to a person or company that has agreed to receive service of process on behalf of the LLC.
The Registered Agent might be a person of Kentucky or a corporate organization that is licensed to conduct operations in the state of Kentucky. The Registered Agent is required to provide evidence of a Kentucky street address where they may be reached.
What does it mean to have a Registered Agent?
A Registered Agent is a person or corporate organization who acts on behalf of your company to receive essential tax forms, legal papers, notice of litigation, and official letters from the government on its behalf. You may think of the registered agent for your company as the point of contact that the company has with the state.
Who may serve as a company’s Registered Agent?
A Registered Agent must either be a person who lives in Kentucky on a permanent basis or a company that is legally permitted to operate inside the state of Kentucky. A Registered Agent service is an example of a company that meets these requirements. You have the ability to choose someone from inside the firm, even yourself.
3. Submit the Organization’s Articles of Incorporation
The Articles of Organization are a document that formally forms your limited liability company by providing fundamental information about it. Because this document is what the state will use to formally register your company, it is essential that you get every information correct.
What details should be contained in the Articles of Organization?
You are required to give the following information when completing the Articles of Organization for your Kentucky limited liability company:
- LLC’s name
- Whether the lifespan of an LLC is limited or permanent.
- Where the main HQ of the LLC is located
- Identifying information about the limited liability company’s registered agent
- Provide a mailing address for the Secretary of State to use for sending notifications to the limited liability company.
- Whether the limited liability company will be run by its managers or its members as managers.
- When it comes to whether or not the LLC will provide professional services
- The name and address of at least one member or manager of the LLC who has direct knowledge of the business activities of the LLC.
Completing the Process of Filing Your Articles of Organization
Articles of Organization are submitted by the person or entity who established the LLC. Their one and only responsibility is to make certain that the Articles of Organization are submitted on time and include all of the appropriate information. You, along with any other member or management of the limited liability company, have the ability to serve as the LLC’s organizer.
The articles may be submitted either online or by mail. The cost of submitting is forty dollars.
4. Acquire a Certificate of Completion From the State
After the formation paperwork of the limited liability company (LLC) has been submitted and authorized, the state will send you a certificate that proves the LLC officially exists if you request a copy and pay enough postage.
This certificate will make it possible for the limited liability company to get an Employer Identification Number (EIN), as well as business permits and a business bank account such as a Novo or Kabbage.
5. Establish a Business Operating Agreement
Although establishing a detailed LLC operating agreement is not a legally required step for incorporating an LLC in Kentucky, it is highly suggested for all new limited liability companies to do so nonetheless.
The following items have to be included in the operating agreement:
- Specify the organizational setup of the limited liability company.
- Determine the specific duties and commitments that each member of the LLC is responsible for.
- Specify the management structure that will be implemented for the limited liability company.
An LLC may be subject to serious legal and operational challenges if it does not have an operating agreement that defines the precise responsibilities of its members.
6. Obtain a number known as an Employer Identification Number (EIN)
A federal employer identification number, commonly known as a tax ID number, will be required of many limited liability companies (LLCs). Your company must have a valid EIN in order to pay federal employer taxes, open a bank account (in most situations), or recruit workers. An EIN also identifies your company to the IRS.
On the website of the Internal Revenue Service (IRS), which is accessible without charge, you are able to do research to determine whether or not you need an EIN and submit an application for one. The vast majority of businesses are required to obtain an EIN, but a significant exception is provided for single-member limited liability companies (LLCs), which are permitted to use the owner’s Social Security number instead.
Depending on the nature of the company they conduct and the location of their headquarters in Kentucky, a select number of limited liability companies (LLCs) may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.
On the page under “Occupational Licenses/Permits” of the Kentucky One Stop Business Portal, you will discover a wealth of information on the state of Kentucky’s business licensing requirements.
Contact a clerk or a representative of the local government in the city or county where the headquarters of your limited liability company is located to get information on the local licensing laws that apply.
Talk to a city or county clerk in the municipality or county where your limited liability company (LLC) is based to find out more about the local licensing procedures that apply to your business.
7. Send in your Annual Renewals
Every single Limited Liability Company that is operating in the state of Kentucky is obliged by law to submit an Annual Report to the Secretary of State. The first report is required by the 30th of June of the calendar year that follows the year in which the LLC was created. Thereafter, the report is due by the 30th of June of each year that follows.
Your yearly reports may be submitted either online or via the mail. The filing cost is fifteen dollars.
What are the prices and next steps?
The filing charge for domestic LLCs is forty dollars. The cost of creating a limited liability company (LLC) in Kentucky from another state is $90.00. The application for a Reserved Name will cost $15 whether it is submitted online or via the mail.
Consider the following additional expenditures associated with operating an LLC:
- LLC name reservation
- DBA (Doing Business As) name
- Certified document copies
- Documentation proving one’s existence
When you register a limited liability company (LLC), you establish a legal basis upon which you can operate your firm. It is important for companies to have a strategy in place to ensure that their limited liability company remains compliant and in an active position on the department’s website.
A registered limited liability company also gives you the ability to perform the following:
You will need to get any permissions or licenses required to run your company, such as those from the health department, the zoning department, the department of home occupations, the department of professional licensing, and others. Some states need a seller’s permission to conduct sales
You need to have your company registered with the taxation bureau.
- Create a business checking account.
- Put in an application for a credit card that is designated for business use.
- Invest in company protection by purchasing insurance.
- Create a trademark to protect your business’s name and brand.
DIY LLC formation or use a professional services firm?
When forming a limited liability company (LLC), it is not required by law to use the services of an attorney. In most states, forming a limited liability company (LLC) is possible by registering the business entity on the website of your state’s secretary of state and with the Internal Revenue Service (IRS).
If you are inexperienced with the procedure of forming an LLC, contacting an experienced LLC startup operator may be the best choice for you to assure a smooth and rapid establishment of your new business.
When starting a new company, owners of businesses may save time and cash by using a professional firm that specializes in the creation of companies. They are able to take care of the things that you perhaps don’t have time to think about for a price ranging from fifty dollars to more than five hundred dollars, and these things include:
- Putting together a limited liability corporation operating agreement that explains your organization’s key information.
- The process of creating articles of organization that identify the registered agent, the management of the LLC, and the date the company was formed.
- Serving in the capacity of registered agent for your business.
- Keeping meticulous documents in the event that a dispute goes to court or an audit is conducted.
- Costs associated with filing and registering with the appropriate parties.
- The process of registering the name of your firm and determining whether or not the LLC name is accessible.
- Completing the necessary legal and formation paperwork, then submitting them.
In Kentucky, how lengthy is it to start up a limited liability company?
If you submit all of your paperwork electronically, forming a limited liability company in Kentucky may be completed in only one day (or 14 – 28 days if filed by post).
What kind of taxation applies to LLC’s in KY?
When determining how much tax must be paid, Kentucky uses whichever figure is lower: $0.095 per $100 of gross revenues or $0.75 per $100 of gross earnings from the Kentucky Limited Liability Entity Tax (KY LLET). A minimum LLET payment of $175 is required regardless.
What are the steps involved in establishing a limited liability company (LLC) in Kentucky?
In order to establish a limited liability company (LLC) in the state of Kentucky, you will need a registration fee, a name for your LLC, a Registered Agent, Articles of Organization, an Agreement, and an EIN number from the Internal Revenue Service.
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