How to Start LLC in Kentucky Step-by-Step Guide
Starting Kentucky LLC, step-by-step
Here are the steps to forming an LLC in Kentucky:
- Choose an LLC Name
- Select a Registered Agent
- File the Certificates of Formation
- Create an Operating Agreement
- Get an EIN
- Register for Limited Liability Entity Tax
If you want to form your LLC yourself, follow our comprehensive guide below at no cost.
For further details on LLC expenses, Explore the specifics of LLC costs in Kentucky.
See "How Long Does It Take to Form an LLC in Kentucky" to find out how long it will take to get your LLC approved and to make sure there are no delays.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
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Here are the steps to forming an LLC in Kentucky
1. Search for your Limited Liability Company (LLC) Name
To ensure your Kentucky LLC name is available and meets state requirements, follow these steps
First, search your business name. Entity Search tool to ensure it's unique and not already in use.
This is necessary because two businesses in the state cannot share the same name.
Second, check domain availability for an online presence Select a name that is memorable to the customer and best suited for the brand.
We'll explore the specifics of naming an LLC in Kentucky in greater detail.
How do I check if my desired LLC name is available?
You can check the availability of your desired LLC name by searching the Kentucky Secretary of State.
What are the naming requirements for the Kentucky LLC?
The name must include "Limited Liability Company," "LLC," or "L.L.C." It must be distinguishable from other business names registered in Kentucky and should not contain restricted words without approval.
Can I reserve a name for my LLC?
You can reserve a name for up to 120 days by filing a Name Reservation application with a $15 cost.
2. Find a Registered Agent in Kentucky
The next step is to select the Kentucky Registered Agent.
A person or organization appointed to accept official notices and legal communications on behalf of your LLC may function as your LLC's registered agent in Kentucky. To carry out this function efficiently, they must have a physical address inside the state.
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Who is eligible to serve as an LLC Registered Agent?
Your LLC's registered agent can be you.
- A trusted friend or family member
- A professional Registered Agent Service
- You
They must have a physical address in Kentucky, as PO Boxes are not acceptable.
The Registered Agent's details are available to the public in state records.
If you prioritize privacy or lack a physical Kentucky address, a Registered Agent Service could be beneficial.
What is a Registered Agent?
A Registered Agent is a person or entity designated to receive legal documents and official government communications on behalf of the LLC.
Who can be a Registered Agent in Kentucky?
The Registered Agent can be an individual resident of Kentucky or a business entity authorized to do business in Kentucky. The agent must have a physical street address in Kentucky (no P.O. boxes).
Can I act as my Registered Agent?
Yes, if you meet the residency and physical address requirements, you can act as your Registered Agent.
3. File the Kentucky LLC Articles of Organization
Prepare and submit the Articles of Organization to the Kentucky Secretary of State.
Guide for completing the articles. Including details like your name and registered agents.
Filing the Kentucky LLC Articles of Organization costs $40 when submitted online. This is a one-time cost to create your LLC.
If you want to file this yourself, see our step-by-step guide: ?.
How do I file the Articles of Organization?
You can file the Articles of Organization online or by mail with the Kentucky Secretary of State, Business and Professional Licensing. The filing fee is $40.
What information is required in the Articles of Organization?
The Articles of Organization must include the LLC’s name, principal office address, registered agent information, and the names and addresses of the organizers.
How long does it take to process the Articles of Organization?
Processing times can vary. Online filings are typically processed within a few business days, while mail filings may take longer.
4. Create the Kentucky LLC Operating Agreement
A Kentucky LLC Operating Agreement is like a companion document to Articles of Organization. The articles create your LLC, while the Operating Agreement explains who owns it.
Banks may require it to open your LLC business bank account, and it is important in court to prove your LLC is running correctly.
That's why we recommend that all LLCs, including Single-Member LLCs, have an Operating Agreement.
Operating Agreement is essential in legal proceedings because it serves as evidence that your LLC operates by proper governance practices, bolstering your defense in court.
An Operating Agreement is an internal document, so you don’t need to file it with the IRS. Just keep a copy in your business records for your reference.
Need to save time?
Consider hiring a professional to set up your LLC: Northwest Registered Agent offers LLC formation services starting at $39 plus the state fee.
(Find out why Northwest is the top choice for LLC formation)
What is an Operating Agreement?
An Operating Agreement is a document that outlines the ownership, management structure, and operating procedures of the LLC.
Is an Operating Agreement required in Kentucky?
While not legally required, it is highly recommended to have an Operating Agreement to establish clear rules and prevent disputes.
What should be included in an Operating Agreement?
The Operating Agreement should include details on member roles and responsibilities, voting rights, profit distribution, management structure, and procedures for adding or removing members
5. Get an EIN for LLC
Getting a Kentucky EIN from the IRS for LLC.
An EIN (Employer Identification Number) is needed for:
- Identifying tax purposes
- Open the business bank accounts
- Apply for licenses and permits
How do I apply for an EIN?
You can apply for an EIN online through the IRS, by mail, or by fax.
How much does an EIN cost?
Obtaining an EIN from the IRS comes at no cost. The application process is free.
How much time does it take to receive an EIN?
When applying online, you will receive your EIN immediately.
If you choose to apply by mail or fax, it can take four weeks.
Why do I need an EIN for my LLC?
An EIN is required for federal tax purposes, hiring employees, opening a business bank account, and fulfilling other business-related requirements.
6. Register for Limited Liability Entity Tax
Every year, Kentucky LLCs are required to pay the Limited Liability Entity Tax.
If your LLC earns less than $3 million annually, you'll owe the minimum tax of $175, which is the amount most people pay. For those LLCs earning more than $3 million, the tax owed will be higher and calculated using the state's sliding scale.
To handle the LLET registration and payment, use the Kentucky Department of Revenue's Business One Stop Portal online.
How do I register my LLC for the Limited Liability Entity Tax in Kentucky?
To register your LLC for the Limited Liability Entity Tax in Kentucky, you need to visit the Kentucky Department of Revenue's Business One Stop Portal. Create an account or log in if you already have one, then follow the instructions to register your LLC for the LLET.
When is the deadline to pay the Limited Liability Entity Tax for Kentucky LLCs?
The deadline to pay the Limited Liability Entity Tax for Kentucky LLCs is typically April 15th of each year. It's important to verify the exact due date annually, as it can occasionally change, and ensure timely payment to avoid penalties and interest.
What should be included in an Operating Agreement?
The Operating Agreement should include details on member roles and responsibilities, voting rights, profit distribution, management structure, and procedures for adding or removing members
How can I obtain an EIN?
For US Citizens or Residents: If you possess an SSN or ITIN, you are eligible to apply for an EIN online. Simply follow these steps: Apply for an EIN online.
For Non-US Residents: You are unable to obtain an EIN online, but you can still acquire one through fax or mail. Follow these steps to get an EIN without an SSN or ITIN.
What Should I Do after the LLC is Approved?
Business bank account for Kentucky LLC
Opening a business bank account for your Kentucky LLC is essential to keep personal and business finances separate. This separation helps maintain accurate financial records, simplifies tax filing, and protects your assets in case of legal issues.
Kentucky Licenses and Permits
Kentucky LLCs may require various licenses and permits depending on their location, industry, and business activities.
Taxes for Kentucky LLC
Kentucky LLCs are subject to several taxes, including federal and state income taxes, sales taxes (if applicable), and payroll taxes if the LLC has employees. Understanding and complying with these tax obligations is crucial to avoiding penalties and maintaining good standing with tax authorities.
Annual Report Requirement
Kentucky LLCs must file an Annual Report each year to the Kentucky Secretary of State. This report updates the state with any changes to the LLC's business details and requires payment of a filing fee. Keeping this report current ensures that your LLC remains in good standing and compliant with state regulations.