How To Start An LLC In Kentucky

This detailed guide covers everything you need to know to start an LLC in Kentucky. Read on to start your new business on the right track.

Start An LLC In Kentucky

When more than one person starts a business, it is often best to set it up as a limited liability company (LLC).

Kentucky offers some of the lowest filing costs in the nation, making it one of the most accessible states to establish a limited liability company (LLC) compared to other states. 

Additionally, the state follows the conventional procedure for establishing an LLC. If you want to form an LLC in Kentucky, follow these procedures to learn how to start an LLC in Kentucky.

But first, let’s look at how Kentucky compares to other states for forming an LLC.

StateKentuckyIndianaTennesseeOhioUS Average
Population4,505,8366,805,9856,975,21811,780,0176,619,825
LLC Filing Fee$40$95$300$99$130.38
LLC Annual/Biennial Fee$15 (every year)$30 (every 2 years)$300 (every year)$0 (no fee and no information report)$89.34 (every year)
Corporate Tax Rate5.00%4.90%6.50%0%*5.60%
Nominal GDP per capita$52,002$61,760$59,969$62,517$64, 773.08

Before You Set Up An LLC In Kentucky

To establish a limited liability company (LLC) in Kentucky, you will have to pay $40 to the Kentucky Secretary of State to file the Articles of Organization. You’ll also need:

How Much To Start An LLC In Kentucky?

When you submit your Articles of Organization with the Kentucky Secretary of State, you will be charged $40

The Kentucky Secretary of State’s office will charge you $15 to reserve the name of your limited liability company.

Steps To Starting An LLC In Kentucky

Steps to start an LLC

The steps for forming an LLC in Kentucky are:

Pick A Name For Your LLC

Before submitting any paperwork for your LLC, it is usually a good idea to verify and even double-check the availability of your company name. You can also reserve a name by filling out this form.

The next step is to ensure that it complies with the legal requirements, including the phrase limited company abbreviation like LLC.

Find A Registered Agent In Kentucky

LLCs are required to have a registered agent and a registered office in the state of Kentucky. In the state of Kentucky, the registered office must be a street address. A post office box is not acceptable. 

The agent must either be a Kentucky resident or a firm permitted to do business in the state. The person named as the agent must be physically present at the registered office and have written permission to serve in this role.

You can act as your agent or appoint a member of the LLC or an employee. The LLC can’t serve as its agent. If this is not an option, you may hire another individual or company to do it in this capacity on your behalf. 

The rates for services of a registered agent typically range from $40 to $300, while the average cost of engaging a registered agent is approximately $100. You can add or replace an existing registered agent by filling out this form.

ZenBusiness – $49 + state fees to register your LLC (read review)
Incfile – $0 + $50 state fees to register your LLC (read review)

Articles Of Organization

You must submit the Articles of Organization for an LLC to the Kentucky Secretary of State to establish an LLC in the state of Kentucky. 

You have the option of filing the articles either through online means or via the mail. The filing cost is $40, and you can pay with a check or a credit card.

In the Articles of Organization for your Kentucky LLC, you have to list the following:

  • The LLC’s name and address
  • Information on the name, address, and signature of the registered agent
  • The postal address of the primary office of the LLC
  • The date on which you submitted the articles for filing.
  • Find out if a company with limited liability is run by its members or managers.
  • Details about the kind of work bEINg conducted by the limited liability company
  • LLC organizer’s signature
Articles Of Organization

Other Required Documents

Be aware that the state of Kentucky utilizes three distinct forms for the three main kinds of domestic LLCs:

  • For-profit LLCs
  • Professional LLCs
  • Nonprofit LLCs

The filing cost is forty dollars, and it does not matter which form you submit. You can form a limited liability company (LLC) online or send a paper form and a check to the Kentucky State Treasurer.

To incorporate a limited liability company (LLC), foreign organizations must fill out and submit a Certificate of Authority. There is a filing fee of $90 associated with this application.

Operating Agreement

The operating agreements are not required for limited liability companies (LLCs) to do business in the state of Kentucky. Despite this, developing one is an intelligent course of action to take. Not only are they essential for describing how your corporate organization will function, but they may also assist you in preventing misunderstanding and conflict in the future.

These agreements include information on day-to-day operations, member contributions, and even how the members of the LLC rank in terms of their voting power. Their presence confers a feeling of legitimacy on your organization, providing a framework for the management of your firm.

You must state the following items in your operating agreement:

  • The duties that fall on each individual
  • The process through which you will accept new members
  • How might current members switch their membership or withdraw their participation altogether?
  • How will you pay out profits and dividends?.

Here is an example of a template.

Get An EIN

Employer Identification Numbers, or EINs, are required to be obtained from the Internal Revenue Service by all newly created limited liability companies in the United States.

The Employer Identification Number (EIN), which consists of nine digits, is analogous to a social security number for a company and is required to pay income tax, submit tax returns, create bank accounts for businesses, and carry out a variety of other essential tasks. You can make this application on the IRS website.

The Forms You Need To Register An LLC In Kentucky

Did You Know?

Kentucky House Bill 249 removed parts of Kentucky Revised Statute 141.206 that had to do with composite returns for tax years starting on or after January 1, 2022.

LLC Taxes In Kentucky

Your Kentucky LLC will be taxed as a pass-through entity by default unless and until it files the necessary paperwork with the Internal Revenue Service. This makes the company taxed as either an S-corporation or a C-corporation. 

Any profits produced by the firm will “pass-through” the LLC itself and be included in the individual tax returns of each member of the LLC. Members retain their profits as earnings on their tax returns. 

Profits received by a Kentucky LLC are subject to the self-employment tax at a rate of 15.3 % on a federal level.

Corporate Tax Kentucky

Is Kentucky A Good Place To Start An LLC?

Forming an LLC in Kentucky is an excellent decision due to its central position, robust shipping routes, and extensive infrastructure. The state’s pro-business atmosphere also gives many corporate incentives, tax rebates, and other financial perks.

How Long To Form An LLC In Kentucky?

Within three to four business days and one to two weeks, you will have the finished documentation for your limited liability company.

How Much Does It Cost To Run An LLC In Kentucky?

The first filing charge for domestic LLCs is $40. LLCs from other states that register to do business in Kentucky must pay a fee of $90.00. Annual reports require you to pay a fee of $15.

What To Do After Forming An LLC Kentucky Business?

After the successful formation of an LLC, here are additional steps you can take to move to the next level:

  • Create a logo: A distinctive logo improves your marketability and increases brand recognition. You can make your logo or hire a graphic designer to help you.
  • Build a website/eCommerce store: Creating a website for your business if you do not already own one is a fantastic idea. A website also allows a company to improve its credibility and name recognition.
  • Bank account: With a company account, your assets are shielded from the reach of creditors by a corporate veil if your LLC or business is subject to legal action.
  • Business insurance: Insuring your businesses is essential. General liability insurance, professional liability insurance, and workers’ compensation insurance are the three most common types of business insurance.
  • Annual reports: Annual reports must be submitted to the Secretary of State by all limited liability companies (LLCs) operating in Kentucky. The fee to submit paperwork is $15.

Resources On How To Start An LLC In Kentucky

Below are various websites that can help you with your LLC:

Start Marketing Your LLC In Kentucky

By putting a logo on your car, you can tell people about your business and how to reach you when you drive to appointments.

Many small companies prefer to have some internet presence. This may be a social network account like Facebook or Instagram, a crowd-sourced review site like Yelp, a company page on Google, or a business website. 

Marketing may also include printed brochures, flyers, product catalogs, newsletters, customer case studies, and other materials.

How To Dissolve An LLC In Kentucky

The first step in shutting down a company is deciding to disband. Following that, you’ll need to tell your creditors, file final tax returns, and contact any necessary government bodies to get things going.

  1. Vote to dissolve the LLC. When members decide to dissolve the company independently, this is called “voluntary dissolution.”
  2. Submit Your Last Tax Return: Before you may submit dissolution documentation in certain states, you must get tax clearance or proof of good standing from your state tax department.
  3. Article of Dissolution: Articles of dissolution are documents that ask the authorities to dissolve your company legally. You can find the form on the website of your state’s corporations section or the Secretary of State.
  4. Your state may require you to tell creditors before filing articles of dissolution. Lenders, insurance companies, service providers, and suppliers are examples of creditors.
  5. After you’ve paid your taxes and creditors, you may divide any residual assets, including investments, income, and physical products, among the LLC’s members.
  6. Do More Wind-Down Steps: At the end of the procedure, you will close the company’s bank accounts, Federal Employer Identification Number (FEIN), and state tax identification number.

Conclusion

When it comes to launching new businesses, Kentucky sees a significant upward trend. In 2021, the number of new firms in the “Bluegrass State” increased by 21 percent. It’s clear that now is a great time to move forward with starting your own limited liability company in the state of Kentucky.

This lengthy guide helps you with the fundamentals of forming LLCs, so start creating an LLC in Kentucky today.

Frequently Asked Questions (FAQ)

Instantaneously if processed online, between three and five business days if mailed.

In the state of Kentucky, limited liability companies (LLCs) are required to submit an annual report to the Secretary of State with a yearly fee of $15.

Your limited liability company (LLC) might be required to acquire additional local and state business licenses depending on the kind of business it conducts and the location at which it operates. Check with the city clerk where the LLC's principal place of business is situated to see what local licenses are available

Similar to S corporations, LLCs in Kentucky are considered pass-through. Hence, they're exempt from paying the federal income tax. However, LLCs in Kentucky are obliged to pay LLET. Additionally, the revenue generated is split among the individual members. They must then file federal and state tax returns depending on the amount that was split.

Employer Identification Numbers are required to be obtained from the Internal Revenue Service.

In Kentucky, a pass-through corporation can no longer file a composite return on behalf of its partners, members, or shareholders who live outside of the state.

Author

Matija

Matija

Amazing content is the core of what we do. With more than 5 years of experience in branding, name development, and business, Matija helps create and manage content production.

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