Starting a limited liability company (LLC) in Hawaii can provide numerous benefits for entrepreneurs and small business owners. You’ll enjoy tax benefits, protection against personal liability, and more ownership and management flexibility than corporations can offer.
Despite these benefits, the process of forming an LLC can seem daunting, and the fees and paperwork involved make business owners decide against it.
In this post, we will explore the main LLC fees Hawaii businesses have to pay when they are due, and share with you some additional forms and documents you should consider filing. We’ll discuss:
Let’s get started:
Business Name Reservation Fees
Hawaii is home to more than 140,000 small businesses, which employ 49.3% of all Hawaiian workers. With so many companies out there, it’s possible that one of them already has your desired business name. Luckily, all you have to do to find that out is visit Hawaii Business Express and type in your business name.
It costs $10 to reserve your business name. When you do, you have exclusive rights to it for 120 days.
Because you’re forming an LLC, you must include “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” in the organization’s name. you cannot use words like:
While you’re required to use your legal business name for official documents, you don’t have to use it while building your brand. If you prefer to use a more memorable name on social media and in everyday conversation, you can file for a “Doing Business As” (DBA) name. Registering a DBA name costs $50, and you must renew it every five years.
Before registering either name, you should check its availability in the Trademark Electronic Search System (TESS) database to ensure it’s usable. If another organization already uses it or your “Doing Business As” name, you risk committing trademark infringement when marketing your products and services.Finally, we also recommend looking up your business name’s URL availability. Depending on your business, many of your potential customers are likely to find you online. Securing a domain name that matches your legal or DBA name will make it easier for people to find you. Check your domain availability on who.is. This will show you multiple variations of your domain (e.g., .com, .net, .org, etc.) if it’s for sale, and if so, for how much.
LLC Fees For Registered Agents
Figuring out who your registered agent will be is one of the final steps you take before filing your LLC paperwork with the Secretary of State.
A registered agent is a person or business entity that receives financial and legal documents for your LLC. Your registered agent must have a physical address in Hawaii. Simply having a P.O. Box won’t suffice. Once you form your LLC, your registered agent’s address becomes public knowledge.
If you don’t want your personal information out there or reside out of state, you should consider working with a commercial registered agent service. Sites like Hawaii Registered Agent offer their services, and you can expect to pay $49 or more per year.
If you choose to be your own registered agent, you can do so for free.
Drafting Your Articles Of Organization
Now that you’ve picked your business name and registered agent, you’re ready to file your articles of organization. This is sometimes considered the most intimidating part of the whole process, and it shouldn’t be. Your articles of organization requires you to fill out your LLC’s basic information and pay the $50 filing fee.
In Hawaii, here’s what you’ll need to include:
Review this document carefully before you submit it since errors can lead to legal issues down the road.
Hawaii LLC Fees For An Operating Agreement
Your operating agreement determines your LLC’s rules, regulations, and liabilities. Think of it as your organization’s constitution.
Hawaii Revised Statute §428-103 states that you can enter into an operating agreement, but it’s not a requirement. However, if you decide against it, the Hawaii Uniform Limited Liability Company Act will govern your LLC.
Even if it wasn’t, we still recommend drafting an operating agreement. Even a single-member LLC with no employees can benefit from having one. Not only does this document serve as an excellent reference point, but when the members of your organization sign it, it can help protect your business during legal and financial disputes. Without one, these decisions will be left up to the courts, and their rulings might not be in your or your organization’s best interests.
Your operating agreement can get pretty involved, but here are a few key elements each one should have:
You can draft your operating agreement for free, but we recommend hiring an attorney to write one for you or look over your current agreement.
General Excise Tax Fees
If you want to do business in the islands, you need a General Excise Tax (GET) license. You’ll need this license for pretty much anything, including:
You can obtain a GET license on the Department of Taxation website for $20. You need to renew it every eight years.
Additional Business License Fees For Hawaii LLCs
Depending on your business, you may be required to have additional licenses or permits to operate in Hawaii.
Here are a few other licenses you should consider:
Permit and license costs and renewal frequency depend on the types of business licenses you require and where your business is operating. Typically, you’ll need to provide the following information:
Hawaii LLC Annual Fees
Congratulations! At this point, you’ve paid all of the main fees, submitted the required paperwork, and obtained the permits and licenses you need to be a fully functional LLC. Now that you’re up and running, you need to remain in good standing with the local, state, and federal governments.
To do this, you need to file an annual report, which is due each year (hence the term “annual”) depending on when you formed your LLC:
Annual Report Due Date
Between January 1st and March 31st
Between April 1st and June 30th
Between July 1st and September 30th
Between October 1st and December 31st
If you can’t remember when you formed your LLC, you can look up your organization’s name on Hawaii’s Business Entity and Documents webpage. Your registration dates should be listed.
Your annual report costs $15 to file. You may be charged a $100 late fee if you file late. However, the state is known to be lenient on late filings and may only charge you a $10 late fee in your first operating year, $20 for your second, and so on.Compared to most other states, Hawaii’s annual fees are very affordable. Arkansas LLC fees cost $150 each year, Mississippi LLC fees are $250 each year, and Massachusetts LLC fees are a whopping $500 each year!
Total Cost Of Hawaii LLC Fees
Here’s a list of the LLC fees we’ve covered and how often they’re due:
Business name reservation
DBA name designation
Every five years
Registered agent fees
$0, or $49+ per year if you hire a service
Articles of organization filing fee
Operating agreement costs
$0 unless you consult with a lawyer
Every eight years
Business license fees
Annual report fees
Additional FAQs For Hawaii LLC Fees
Do you still have more questions about Colorado LLC fees or more questions about LLCs in general? We’ve got answers:
Filing your annual report is pretty straightforward. Much of the information you need to submit is simply a repeat of what you disclosed in your articles of organization, including:
This report helps keep your records up to date and makes it easier for creditors and other parties to find you if they need to contact you.
A Certificate of Good Standing costs $5 to get. If you need it expedited, it will cost you an additional $10.
Conclusion: Hawaii LLC Fees: How Much Do They Cost?
While starting an LLC may seem daunting, it’s much easier than many business owners think. In the State of Hawaii, it’s also pretty affordable. You can theoretically reserve your business name, file your articles of organization, and get your GET license for under $100.
Are you ready to form your LLC in Hawaii and enjoy the fantastic benefits you’ll have as a business owner? Get started today!And while you’re at it, check out The Lazy Man’s Guide to Living The Good Life, and discover how you can make the most of your thriving business!