Start An LLC In Kansas
Starting an LLC is a lot easier than you might think. If you want to learn how to start an LLC in Kansas, please continue reading.
This article addresses what you need to know when creating an LLC in Kansas. It also addresses pertinent issues such as payable fees, applicable taxes, Articles of Organization, operating agreements, and dissolution of an LLC.
But first, let’s explore how Kansas compares to surrounding states as a place to form an LLC.
| State | Kansas | Colorado | Oklahoma | Missouri | US Average |
|---|---|---|---|---|---|
| Population | 2,937,880 | 5,812,069 | 3,959,353 | 6,168,187 | 6,619,825 |
| LLC Filing Fee | $160 | $50 | $100 | $50 | $130.38 |
| LLC Annual/Biennial Fee | $50 (every year) | $10 (every year) | $25 (every year) | $0 (no fee and no information report) | $89.34 (every year) |
| Corporate Tax Rate | 1.0-5.9% | 4.55% | 4.00% | 4.00% | 5.60% |
| Nominal GDP per capita | $65,530 | $72,597 | $51,861 | $58,356 | $64, 773.08 |
Before You Set Up An LLC In Kansas
Here’s a quick brief of what we’ll cover in the article.
- The Articles of Organization must be filed with the Secretary of State. Along with the appropriate costs, the form must contain important information such as the LLC name and postal address.
- You need a registered agent when you form an LLC in the state of Kansas.
- Business forms and files are typically processed in two to three business days. However, the online approach allows for the quick submission.
- LLC registrants must submit Articles of Organization together with the requisite filing fee of $165 for paper forms and $160 for online forms. Fees are subject to change; contact the Secretary of State for the latest fees.
How Much To Start An LLC In Kansas?
The following paperwork and costs are necessary when forming an LLC in Kansas:
Documents
Fill out and return the Articles of Organization form to the Kansas Secretary of State.
Charges
The Articles of Organization form fee is $160-$165. However, payable fees are subject to change; contact the Secretary of State for the latest fees.
Operating Agreement For A Limited Liability Corporation
Although the LLC operating agreement will not be filed with the Secretary of State, it is good for LLCs that have more than one member to create an operating agreement. The registered agent should have a copy of this agreement on file.
Taxation
The tax duties for your LLC vary depending on the kind of taxation you choose:
- A limited liability company is treated as a limited liability partnership. These LLCs must submit Form 1065 with the IRS and indicate an equal allocation of earnings, losses, and credit on a Schedule K-1.
- For federal tax purposes, an LLC is considered a C corporation. These LLCs must submit Form 8832 (Entity Classification Election) and elect to be taxed as corporations. They must then submit Form 1120 (U.S. Corporation Income Tax Return) to the IRS.
- A limited liability company is classified as an S corporation. These LLCs must submit Form 1120S (U.S. Corporation Income Tax Return) with the IRS and a report from each owner reflecting the equal allocation of income, losses, and credit.
- A limited liability company is handled as a single proprietorship. All company revenue and costs must be reported to the IRS through the sole proprietor’s income tax returns, Schedule C (Form 1040, Profit or Loss from Business).
Another thing to keep in mind about starting an LLC in Kansas is that each LLC member must report their earnings on their respective income tax forms. All members must also submit a Partnership Return (Form K-65). You should produce this form to the Kansas Department of Revenue as soon as possible.
Steps To Start An LLC In Kansas
Before you begin the application process for starting an LLC in Kansas, you need to understand an LLC. It is also essential to find out if it is the right business structure for your firm. Here are the steps.
Pick A Name For Your LLC
Following Kansas Statute 17-7673, there are no restrictions on LLC names as long as they conclude with “Limited Liability Company,” “Limited Company,” or any variant of its abbreviation, e.g., LLC, L.L.C., LC, L.C., or Ltd. Co.
Names may be reserved with the Secretary of State for up to 120 days by submitting a name reservation request online or by mail. A $30 non-refundable filing fee must accompany all requests.
The availability of a selected name may be verified on the Secretary of State’s website.
Find A Registered Agent In Kansas
Kansas, like other states, requires new LLCs to name a registered agent as part of the process. A registered agent’s principal function is to receive papers about judicial procedures on your behalf.
If your company is subpoenaed or sued, the state of Kansas has to know how to send the documents to the leadership of your LLC.
Although both phrases imply the same thing in Kansas, the official name for a registered agent is “resident agent.” A resident agent may be a person or a firm, but they must have a “registered office” address in Kansas. Because court papers are often served in person, this address cannot be a P.O. Box.
You can use a registered agent when forming an LLC in Kansas to make the process smoother for you.
Using a Third-Party Registered Agent Service is also possible. Many company owners believe they should act as the registered agent and operate their business address as the registered office address.
Unfortunately, this strategy has severe drawbacks. The following are some advantages of using an outside registered agent service:
- Privacy: If your organization receives a process service, it will not be visible to consumers.
- Flexibility: Because a registered agent is accessible throughout regular business hours, you may work whenever you are most productive in expanding your company.
- Organization: If you utilize a Kansas resident agent service, they will accept and save your crucial legal papers in easy-to-access databases, which you can always access.
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Articles Of Organization
Following that, you must submit Articles of Organization. Now that you have all the essential information, such as the name and registered agent, you should have no trouble completing the paperwork with the Kansas Secretary of State.
You may submit the “Limited Liability Company Articles of Organization” form online or by mail. Have the following information on hand to complete the form:
- The name of your LLC
- Name and address of your resident agent
- Your company’s mailing address (can be different from the registered address)
- Last month for filing taxes (most businesses select December to stay on the calendar year)
- The authorized person’s signature (such as an owner of the LLC in Kansas)
We recommend you ensure safe storage of your Kansas LLC operating agreement, contracts, compliance checklists, and so on.
Other Documents
You’ll be able to create a business bank account after obtaining an EIN. Having separate accounts for your company and personal banking is essential for organizing your funds throughout tax season. It also aids in the avoidance of financial commingling.
Commingling cash may complicate your taxes and be used against you in court if someone challenges whether you and your LLC are genuinely different businesses.
Operating Agreement
Kansas law does not require a new LLC to establish operating agreements. However, whether you’re working alone or with others, it’s strongly recommended that you develop one.
Here are a few of the advantages that an LLC operating agreement provides to company owners:
- In the courts’ view, an operating agreement further isolates your company from personal assets. As a result, you will better protect your money from legal action.
- Operating agreements, which explicitly define each member’s rights and privileges, may assist avoid and resolving disagreements between several members (owners).
- Before making any financial obligations to an LLC, potential investors and lenders often want to study the operating agreement.
Get An Employer Identification Number (EIN)
After forming the LLC in Kansas, you should file for an EIN. The Internal Revenue Service issues an Employer Identification Number (EIN), Federal Employer Identification Number, or Federal Tax Identification Number.
An EIN is similar to a Social Security number for your company. It enables you to do essential operations such as hiring personnel and paying taxes.
If you run your LLC only for profit, you may not need an EIN. However, if your LLC includes workers or several partners, you will need an EIN. Furthermore, even though an EIN isn’t required for your LLC, having one might assist you in opening a company bank account or acquiring funding.
The Internal Revenue Service (IRS) website is where you may apply for an EIN.
The Forms You Need To Register An LLC In Kansas
This is the collection of forms that come in handy when registering an LLC in Kansas.
- Articles of Organization
- Business licenses
- Initial and annual reports
- Internal Revenue Service (IRS) Forms
- Name reservation application
- Operating Agreement
Did you know?
LLC emerged as a business structure in Kansas in 1991? It quickly became very popular among business entrepreneurs. Ideally, LLC combines a corporation’s liability protection and flexible management and tax policies.
LLC Taxes In Kansas
Corporation tax is flat-rated at 4% of the federal taxable income. A surtax of 3% is also applicable on taxable incomes above $50,000. All estimated taxes are payable all through the year.
The difference between federal and state taxes is that the respective federal governments collect the latter while individual states collect the former to pay the specific taxes owed to the respective states.
Kansas, like all other states, is an excellent place to start an LLC. Business people can protect their assets and business debts from legal liability using an LLC in Kansas.
How Long To Form An LLC In Kansas?
If all forms and documents are filled duly online with the Kansas Secretary of State, approval takes only 24hrs.
How Much Does It Cost To Run An LLC In Kansas?
On average, it costs $160-$165 to start an LLC in Kansas. Operating costs vary based on the LLC you’re running.
What To Do After Formation?
Getting your LLC registered is only the first step. Next, you need to:
- Build a website/eCommerce store for your business.
- Create a logo that stands out from the competition.
- Get proper business insurance.
- Open a bank account.
- Prepare annual reports.
Ensure that you have everything needed to run your business smoothly.
Resources To Start A Successful LLC In Kansas
You can find all the information you need on the Kansas Secretary of State website. You can also turn to the official IRS website for all taxation information.
Kansas Department of Revenue also holds important information you need to know if you want to run a successful LLC in Kansas.
How To Market Your LLC?
You can read our comprehensive guide to business marketing to prepare the right marketing strategy for your new LLC.
You can also refer to our actionable article that goes over 11 different marketing tips for starting a business.
How To Dissolve An LLC In Kansas?
You will have to file the Certificate of Cancellation with the Kansa Secretary of State. Before you do that, you will also need the confirmation of all partners that they agree with the dissolution of the LLC.
You will also have to pay a $20 filing fee for the Certificate of Cancellation.
Conclusion
Now that you have learned how to start an LLC in Kansas, why not start one?
An LLC can help protect your assets and business debts from legal liability. After getting your LLC, advertise and make your business visible to clients. Lastly, remember to file your reports accordingly to avoid legal issues with the State and Federal legislation.