Forming a limited liability company (LLC) in Kentucky is a smart choice for entrepreneurs, small business owners, rental property owners, and startups. LLCs offer personal liability protection, tax benefits, and provide members and managers with flexibility that corporations lack.
Even though most business owners should form an LLC, the daunting paperwork and fees associated with creating and maintaining one keep them from creating one.
Luckily, figuring out how to start an LLC is often easier than you’d think.
In this post, we’ll explore Kentucky’s most common LLC fees, what documents you need to file, and when. We’ll discuss:
Let’s get started:
Business Name Reservation Fees
Kentucky is home to over 360,000 small businesses. That’s roughly one business for every 12.5 residents!
With so many organizations in operation, there’s a chance one of them may already be using your desired business name. Before you begin filing, check Kentucky’s business filings and records online services website to see if your name is available.
Also, don’t forget that your organization needs to include “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” in its name. This actually works to your advantage because you may be able to make your business’ name distinct enough by including a different variation of “LLC” in its title.
While you’re working out your name, be mindful that it can’t contain words like “trust,” “bank,” “insurer,” or “insurance company” unless you are one of these things. “Corporation,” “incorporated,” and any abbreviation are also off the table because you’re an LLC, not a corporation. You also can’t use anything that implies that you’re a government entity, such as “CIA” or “FDA.”
If your LLC name is available and fits the above criteria, you can reserve it for 120 days for $15. This gives you exclusive rights to your name just in case another business registers a name indistinguishable from you while you’re getting your paperwork together.
Registered A “Doing Business As” Name In Kentucky
Don’t be disheartened if the name you want is already taken. You’re only required to use your official business name on your legal and financial paperwork (e.g., taxes, annual reports, etc.).
You can register for a “Doing Business As” (DBA) name if you want to market your organization under a different name. DBA names can be helpful when attending networking events, creating marketing materials, and building brand recognition.
You can register a DBA name in Kentucky for $20.Before you do, however, check for both your LLC and DBA name’s availability in the Trademark Electronic Search System (TESS) database. The TESS database will help you determine if you can market your business using either of these names or a variation of them. If you market your business using a trademarked company name (e.g., if you choose to market your company “Apple of My Eye” as “Apple”), you may be penalized for committing trademark infringement.
Kentucky LLC Fees For Registered Agents
Before you file your official paperwork, you need to select a registered agent.
A registered agent is the person or commercial entity responsible for receiving your LLC’s legal and financial documents. Whoever or whatever entity you choose has to have a physical address in Kentucky. Having a P.O. Box doesn’t qualify you to be a registered agent.
Once your business is an official LLC, your registered agent’s physical address becomes publicly available. If you prefer to keep your address private, or if no one in your LLC has a physical address in Kentucky, you can hire a commercial registered agent service.
Companies like Kentucky Registered Agent cost $49 a year. Otherwise, being your own registered agent is free.
How To Fill Out LLC Form In Kentucky
With your business name and registered agent chosen, you’re ready to form your LLC! To make it official, you need to fill out your articles of organization. While this document sounds daunting, you shouldn’t be intimidated by it. Your articles of organization outline all of your LLC’s basic information, including:
Your articles of organization cost $40 to file with the Secretary of State. Once approved, you’re officially an LLC!
LLC Fees In Kentucky For Your Operating Agreement
LLCs are not required to have an operating agreement in Kentucky. However, we strongly recommend creating one anyway, even if you don’t submit it to the Secretary of State.
Your operating agreement defines the rules and regulations your LLC is going to abide by and should be signed by all of your organization’s members. It serves as an excellent reference point for when your organization is trying to make a substantial business decision, such as whether or not to enter a new market. It can safeguard your business if you end up in a legal and financial dispute. Without one, a judge or jury may end up making vital decisions for your LLC, which may be in your organization’s best interest.
Operating agreements can get pretty detailed. Usually, the more specific you are, the better. The core elements of your operating agreement should include:
It doesn’t matter if you’re a multi-member LLC with hundreds of members or a single-member LLC with no employees: your business can only benefit from having an operating agreement. They’re free to create, but since it’s a contract with a lot of legalese, we recommend hiring an attorney.
How To Start An LLC In Kentucky: Business Licenses
Good news—the state of Kentucky doesn’t require you to have a general business license to operate your LLC. However, you must have all your other required licenses and permits before operating in the state. These include industry-specific professional licenses and permits, and location-based licenses specific to your location.
While requirements vary, you’ll typically need the following to obtain these licenses and permits:
The costs and renewal periods for these licenses will vary. To figure out what you need, visit your local government’s website to research what’s required of your industry. If you have difficulty figuring that out, contact your local government officials for information.
Sales And Use Tax Permit Fees
More good news—applying for a Kentucky sales and use tax permit is free! File your application with the Department of Revenue (DOR), or take it to a DOR Taxpayer Service Center to get it processed immediately.
Kentucky LLC Filing Annual report
Congratulations! You’re officially up and running.
Now all you have to do is remain in good standing with the local, state, and federal governments. In addition to paying taxes and maintaining a legal operation, you must file an annual report with the Secretary of State.
Your annual report is similar to your articles of organization and helps vendors, creditors, and the government be able to contact you when needed. It costs $15 to file, and you can file it anytime between January 1 and June 30 each year.One of the many benefits of operating an LLC in Kentucky is how affordable your annual fee is. In comparison, Georgia LLC fees are $300 annually, New Hampshire fees cost $100, and Massachusetts LLC fees are a whopping $500!
Total Cost To Form An LLC In Kentucky
To recap, here’s the list of Kentucky’s LLC fees we’ve covered thus far and how often they’re due:
Business name reservation
DBA name designation
Registered agent fees
$0, or $49+/yr if with a commercial registered agent service
Articles of organization filing fee
Operating agreement costs
Business license fee
Sales tax registration fees
How To Form A LLC In Kentucky: Additional FAQs
Do you still have more questions about LLC fees in Kentucky or more questions about LLCs in general?
Thanks to the internet, many potential customers will likely find your business online. To help them find you more easily, you should secure a domain name that matches your legal or DBA name.Check your domain name availability on who.is. Who.is will show you multiple variations of your domain (e.g., .com, .net, .org, etc.) and how much the available options will cost you. The cost of a domain name starts as low as $8.99 or $9.99, but competitive domains will have a much heftier price tag.
If you want to open a business bank account or work with a lending institution, you’ll usually need a Certificate of Good Standing. They cost $10 for a physical copy.
Paying yourself from an LLC is simple.
Refer to your operating agreement to double-check who can transfer funds from the business account to personal accounts and when. Then, transfer a portion of your organization’s cash reserve from your business account to your personal account, or divide it among other LLC members based on your operating agreement’s terms.
Conclusion: How Much Are Your Kentucky LLC Fees?
Are you ready to create your Kentucky LLC and enjoy the many benefits they have to offer? Now that you know the required documents and fees to start and maintain your LLC, you’re on your way to running a successful business!
Are you ready to capitalize on that success? Check out The Lazy Man’s Guide to Living The Good Life, and learn how you can run a thriving business!