How to Start a Kentucky LLC
Kentucky LLC Formation – Basics & Helpful Information
This article is meant to be a general overview of the Kentucky LLC formation process; including information about how to start a Kentucky LLC and other basic issues related to Kentucky LLCs.
Kentucky Filing Fees
The Kentucky Secretary of State charges $40.00 to file your Articles of Organization to form your Kentucky LLC.
Kentucky Filing Time
Regular processing time for mail-in filing of the Articles of Organization generally takes 2-3 business days. Online filing can be processed immediately. Currently Kentucky does not offer expedited processing time.
Kentucky Annual Compliance Requirements
Kentucky LLCs are required to file annual reports to the Kansas Secretary of State by June 30th of each year. Annual Reports are to assist the Secretary of State in providing accurate information to the public. Annual Reports can be filed anytime between January 1st and June 30th each year by either returning the Annual Report post card that the LLC will receive in January; or by printing and mailing in the report. You can also file the Annual Report online. The fee for filing the Annual Report is $15.00.
How to Start a Kentucky LLC
You can use this checklist to help guide you through the process of forming a Kentucky LLC:
Step 1: Decide on a Business Name
The first step in creating an LLC in Kentucky is naming your business. You’ll need to check with the Kentucky Secretary of State to make sure the name you’ve chosen is available. You can do this online via the Kentucky Business Availability Search.
It is also highly recommended that you check the US Patent and Trademark Office to see if someone has a federal trademark of the business name you want (the Kentucky will not check other state’s databases or the federal trademark database). You can click here to have a comprehensive name availability search performed for you.
Every LLC name must contain the words “Limited Liability Company” or “Limited Company” or the abbreviations “LL http://onestop.ky.gov/start/Pages/occupational.aspxC”, or “LC”. If you want to use the words “Limited Company” you must use the abbreviation “LTD CO.”. An LLC name must be distinguishable from all other business entity names actively on file with the Kansas Secretary of State.See Kentucky LLC Naming Criteria →
Kentucky Trade Names
An assumed name is similar to a “doing business as” (DBA) name. Although an assumed name is not legally required, it can be a wise business practice. Assumed names remain in effect for 5 years and may be renewed for a successive term. The cost to file a Certificate of Assumed Name is $20.00. Kentucky assumed names are only applicable in Kentucky and are not substitutes for a national trademark filing.See more info on Kentucky Assumed Names →
Step 2: Register your LLC with the State
Kentucky Articles of Organization
Your Kentucky LLC is formed by signing and filing Articles of Organization with the Kentucky Secretary of State. You can also e-file the Kentucky Articles of Organization. The Kentucky Secretary of State staff will examine the articles for statutory compliance and will either approve the articles for filing or reject the articles with instructions on how to resubmit the document.
The Articles of Organization must include at a minimum:
- Name of the Kentucky LLC
- Initial Registered Agent’s name and registered office address
- Mailing address of the initial principal office of the LLC in Kentucky
- Management Structure of the LLC
- Duration of LLC
- Organizer’s Name and Signature
Kentucky Registered Agent Information
Kentucky requires that the LLC have a Registered Agent, which is an individual or a business entity the LLC appoints for the purpose of accepting service of process (lawsuit papers or legal documents) for the LLC. An LLC cannot act as its own registered agent, but the LLC can appoint one of its members as the registered agent. The registered agent may also be a business entity qualified to transact business in the state the Kentucky Secretary of State. Post office boxes are not allowed to be used. The registered agent must agree to accept the appointment either by signing the document or filing a separate written statement of acceptance.Read more about Registered Agents →
Step 3: Create and Sign the LLC’s Governing Document
The governing document for an LLC is called the “company agreement” or sometimes the “operating agreement”. The company agreement is to an LLC like a partnership agreement is to a partnership (or bylaws to a corporation). The company agreement governs the internal operation of the LLC and is typically a private document that is kept in the company book and the principal place of business (it is NOT filed with the state). The company agreement can address many issues, some of the more common concepts found within a company agreement are:
- Limitations on the members liabilities
- The level of consent needed to take various actions (i.e. simple majority required to add new members)
- The percentage of the LLC that each member owns
- How profits and losses are allocated between the members (typically based on ownership percentages)
- Limitations on transferability
- What each member is contributing to the LLC and what happens is such contributions are not made.
- The authority of the members, officers, managers, committees, etc.
- How meetings are conducted
One of the reasons we recommend using an LLC formation company like IncFile is that they can provide you with a company agreement in connection with their LLC formation services.
Step 4: Get an EIN
After you form an LLC in Kentucky, you can get the EIN. There are a few different ways to get an EIN:
- Apply Online Yourself: The IRS has an online EIN Application you can use to get an EIN. The turn around time on the EIN using this method is only a few minutes.
- Use Form SS-4: You can get an EIN the old fashion way by completing Form SS-4 and mailing or faxing into the IRS. How long does it take to get the EIN this way? According to the IRS: if you mail in Form SS-4, it will take 4-5 weeks to get your EIN. If you fax in Form SS-4 you should have the EIN back in a week if you provide a fax number or 2 weeks if you don’t have a fax number.
- Have a Third-Party Obtain: All of the LLC formation companies have the ability to get the EIN for you. The EIN obtainment charge varies by company, but it is generally between $50 and $100. If you get one of the higher priced packages, they will sometimes throw in the EIN for free.
Step 5: Get Licenses and Permits
After you create your new Kentucky LLC, you’ll need to determine if your business/profession requires any licenses or permits to conduct business.Read more about Kentucky Occupational Licensing and Permitting → Read more about Kentucky Local Licensing Requirements → Read more about Federal Business Licenses & Permits →
Registering a Foreign LLC in Kentucky
If you have a non-Kentucky LLC (aka Foreign LLC) and you are doing business in Kentucky, you may need to register the Foreign LLC in Kentucky. Each state has a different definition of “doing business”. In Kentucky, the kinds of activities that would not constitute “doing business” are outlined in the Kentucky Revised Statutes, Section 14A.9-010.
The filing fee for the Certificate of Authority in Kentucky is $90.