How to start an LLC in Kentucky?
Are you thinking about starting an LLC in Kentucky? LLCs are a great way to protect your personal assets and create a structure for your business that can help it grow. Plus, LLCs are relatively easy to set up and maintain. In this article, we’ll provide an overview of what you need to do to start an LLC in Kentucky.
We’ll cover the paperwork you need to file, the fees you need to pay, and the steps you need to take to get your LLC up and running. So if you’re ready to start your Kentucky LLC, read on!
Before we dive in, here’s a really good explanation video on starting an LLC in Kentucky for those who prefer a video guide.
Benefits of starting an LLC in Kentucky
There are many benefits to starting your LLC in Kentucky. As expert start-up guides will advise you, it has the advantage of limited liability protection for its members. It’s more compact than a Corporation or S Corporation.
Limited Liability Protection
One of the most significant benefits of starting your Kentucky business as an LLC is that it offers limited liability protection, which means that if a lawsuit arises from a customer or client for something you did while operating your business – it won’t follow you home. Rather than the people who own it, the business itself is liable for paying out any damages.
Your personal assets, such as your car or house, are separated from your Kentucky business assets and aren’t at risk of being taken away if someone sues your business for something you did wrong. Many entrepreneurs start their businesses as LLCs because of this benefit.
An LLC in Kentucky has the choice of being taxed as a Sole Proprietorship, Partnership, or Corporation. It’s a good deal for start-ups since they don’t have to worry about finding an accountant or anything like that just yet.
Note: Single-Member LLCs are treated as Sole Proprietorships by default.
Minutes of meetings not required
Lastly, one of the benefits of starting your LLC in Kentucky is that no minutes are required for meetings. People don’t have to travel for monthly meetings or anything like that. They need to follow the operating agreement, which doesn’t take too many hours out of the day.
Kentucky LLC Rules & Requirements
This is a quick summary of the most important rules and requirements that this article will go through in-depth.
To apply for permission to form an LLC in Kentucky, the company must have a in Kentucky. Your LLC’s name must include “Limited Liability Company,” or their abbreviation, “LLC.” It can’t be something that resembles another already existing business. Ensure you as a business owner keep accurate records and reports of your business transactions.
Best Kentucky LLC Formation Services
If you’re thinking about starting your LLC in Kentucky, it’s a good idea to use a professional service that can handle the process for you. These services will ensure you get all the necessary paperwork filed correctly and timely so that you don’t have to worry about anything going wrong with your business registration.
Finding the Best LLC Formation Services in Kentucky
Choosing the best LLC formation services in Kentucky is an essential first step for anyone looking to start their own. Here are some of the most critical factors you’ll want to consider:
- Customer service/communication
- Integration with accounting software (if necessary)
These factors will help you narrow down your list of potential providers to find the one that provides you with the professional service you need at an affordable price. We have reviewed some of Kentucky’s best LLC formation services here: Best LLC Formation Services.
As mentioned above, it’s usually recommended that if you’re unfamiliar with this kind of thing, then you should consider allowing LLC formation service providers to help you start your own business here in Kentucky. These services will ensure that you comply with state law and all the rules and requirements. If anything goes wrong, they’ll have your back so that you don’t have to worry about it.
However, if you’re looking to do it on your own, then you can continue reading our guide on how to start an LLC in the state of Kentucky.
The following is a step-by-step guide of what you can expect when forming an LLC in Kentucky:
5 Steps to Starting an LLC in Kentucky
Step 1: Name your Kentucky LLC
Choosing your name can be one of the most challenging parts of starting your Kentucky LLC. You’ll have to choose a name that’s not already in use by another Kentucky LLC or restricted by the state.
The rules for naming your Kentucky limited liability company are as follows:
- Your name cannot mislead people into thinking the Kentucky LLC was set up by the government or is a federal government agency.
- The name can’t be too similar to another Kentucky company’s
- Your name has to end with an LLC designator (LLC, LTD., etc.)
- You may need to fill out additional paperwork if you want to use certain words in your Kentucky LLC name, including bank, trust, trustee, incorporated, Inc., and corporation.
- If you want to see if a specific LLC name is available, you can run a business name search on the Business Entity Search page of the Kentucky state website.
After choosing the perfect name for your new Kentucky business, you can also secure a good domain name. A domain name is also helpful if you want a business email address @yourllc.com.We recommend using Namecheap to register your domain. They have great prices, fast service, and an easy-to-use website.
Step 2: Choose your Kentucky Registered Agent
Before you form your LLC in Kentucky, you’ll need to appoint a registered agent with a physical street address in the state of Kentucky. This person or entity would be responsible for receiving essential documents on your behalf if anything happened that would require that sort of thing (lawsuits, etc.). You can name yourself as your Kentucky registered agent, but that isn’t advisable because you would not be able to claim any anonymity.
What is a Registered Agent?
A Kentucky registered agent is an individual or business entity that agrees to accept the service of process on behalf of a Limited Liability Company.
When you create a Limited Liability Company in Kentucky, the State of Kentucky requires that this registered agent be appointed for your LLC to become effective. The Kentucky Secretary of State’s Office will not file your Articles of Organization unless you designate a registered agent on your application form.
Who can be a Registered Agent in Kentucky?
For a registered agent, you can select a person or an organization. The individual can be a Kentucky resident, a Kentucky corporation, or a non-Kentucky corporation with a business presence in Kentucky.
You can also use a Kentucky registered agent service to appoint a registered agent and obtain a business address. Services such as Zenbusiness and Northwest Registered Agent offer this service as a feature of some of their packages when you register a Kentucky company with them.
What does a Registered Agent in Kentucky do?
A registered agent in Kentucky is available during normal business hours to accept important documents and notices on behalf of your LLC. These can be official court papers such as lawsuits or service of process documents that will require the registered agent’s signature.
A registered agent is not responsible for the management of your Kentucky LLC, nor are they required to do anything with the documents once they are received at their business address except for filing them under Kentucky law.
Step 3: File your Kentucky LLC Articles of Organization
You’ve chosen your Kentucky name and appointed a registered agent, and now it’s time to create your LLC and become a recognized legal entity.
Before filing, you will need to decide between a member-managed and manager-managed LLC. The members run a member-managed LLC, while a designated manager runs a manager-managed LLC.
To start an LLC in Kentucky, you’ll need to file your Articles of Organization with the Kentucky Secretary of State, which can be done online. The online filing fee is $40, and a person must file this with authority to do so on behalf of the Kentucky LLC.
File your Kentucky LLC Articles of Organization Online
You’ll need the following documents to submit your papers:
- The official name of your Kentucky LLC
- A brief description of the purpose of your Kentucky LLC
- Your Kentucky LLC’s street address
- Your Kentucky registered agent’s name and address
- The signature of your registered agent
- Your LLC’s authorized person’s signature
- Your return address
You can submit your Articles of Organization through Kentucky’s online business filing system.
File your Kentucky LLC Articles of Organization by Mail
If you choose not to file online, you can also mail your Articles of Organization to the Secretary of State. The filing fee is $40 and a person must sign the formation documents with authority to do so on behalf of your Kentucky LLC. You’ll need the download the filing form and mail it.
Michael G. Adams
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602
Step 4: Create your Kentucky LLC Operating Agreement
After filing your Kentucky LLC Articles of Organization, you will want to create an Operating Agreement.
An operating agreement is an internal document that sets out the internal rules of your Kentucky LLC. These rules address issues such as how LLC owners will spend the money, whether voting takes place within your business, what happens if someone wants to sell their interest in the company etc.
Kentucky does not require an LLC to have an operating agreement, but it is recommended that you create one. An operating agreement ensures that all members know and understand their roles within the company. If they ever need to take legal action, they will show a court of law that the company functions as more than just an unincorporated association.
This operating agreement should be thorough but concise, outlining everything you want to include regarding the membership responsibilities of your Kentucky LLC, so there are no misunderstandings down the line.
The operating agreement will also be necessary when you open a business bank account in Kentucky.
Step 5: Get an EIN for your Kentucky LLC
An EIN, or Employer Identification Number, is a unique number that the IRS issues to businesses for tax purposes. An EIN is like your business’s social security number. You can use it to file state or federal-level tax returns and financial statements with different government agencies or open a business bank account.
An EIN is required for several reasons. First, as mentioned above, it is needed to open a business bank account for your Kentucky LLC. You will also need an EIN to hire employees, as it is used on employment tax forms. Finally, an EIN is often required when filing your business taxes.
After you receive your EIN, you will be informed of your Kentucky LLC’s various tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Applying for an EIN for your business is free of charge.
Kentucky LLC Processing Time
Online filings take 1 business day for the state of Kentucky to process your Articles of Organization and approve your LLC.
If you choose to file by mail, the processing time is approximately 3-7 business days.
Kentucky LLC Frequently Asked Questions
How much does it cost to start an LLC in Kentucky?
The online filing fee is $40, and the mail filing fee is $40 in Kentucky.
How do I set up an LLC in Kentucky?
Step 1: Choose a name for your Kentucky LLC
Step 2: Choose a Kentucky Registered Agent
Step 3: File the Articles of Organization
Step 4: Create an Operating Agreement
Step 5: Get an EIN
Is there an annual fee for LLC in Kentucky?
The annual filing fee is $15 in the state of Kentucky.
How long does it take to start an LLC in Kentucky?
It takes 3-7 business days to start an LLC in Kentucky when filing by mail and 1 business day when filing online.
How to Start an LLC in Kentucky
A Beginner’s Guide to Starting an LLC in Kentucky