LLC Cost in Hawaii | How Much Does It Cost to Start an LLC

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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LLC Costs in Hawaii

Forming a Limited Liability Company (LLC) in Hawaii is a popular choice for entrepreneurs and small business owners who want to protect their personal assets and enjoy flexibility in their business operations. LLC formation costs vary from state to state, and it is essential to understand the costs involved in forming and maintaining an LLC in Hawaii.

If you would like to know more about the Hawaii LLC Cost, read the whole article until the end. Webinarcare Editorial Team will help you gain knowledge on how much an LLC Costs in Hawaii. You must be guided by all the factors gathered in this article.

How to Start an LLC?

Before we dive into the LLC Cost in Hawaii, you should know the step-by-step process of starting an LLC, including selecting a unique business name, appointing a Resident Agent, filing the necessary documents, and fulfilling any additional requirements, such as obtaining licenses or permits that are specific to your industry or location.

Here are the steps in starting an LLC in Hawaii:

  • Step 1: Choose a Unique Business Name
    The first step in starting an LLC in Hawaii is to select a unique business name for your company. The name should be distinguishable from any other registered businesses in the state. You can check the availability of your desired business name by searching the state’s business name database. Once you’ve found an available name, you may need to include “LLC” or “Limited Liability Company” at the end of the name to comply with state requirements.
  • Step 2: Appoint a Resident Agent
    A Resident Agent is someone who will receive official legal and tax documents on behalf of your LLC. The Resident Agent must have a physical address in Hawaii and be available during normal business hours. You have the option to appoint yourself as the registered agent or hire a professional registered agent service.
  • Step 3: File the Articles of Organization
    To officially form your LLC, you need to file the Articles of Organization with the Hawaii Secretary of State or the appropriate state agency. The Articles of Organization typically requires basic information about your LLC, such as its name, address, Resident Agent details, and the name and address of the LLC’s members or managers.
  • Step 4: Create an Operating Agreement
    Once your LLC is formed, it’s highly recommended to create an operating agreement in Hawaii. Although not required by Hawaii law, an operating agreement is a crucial internal document that outlines the ownership, management, and operating procedures of your LLC. It helps establish clear guidelines and expectations among members, and it can be especially useful in the event of disputes or disagreements in the future. The operating agreement can be customized to fit the specific needs and goals of your LLC.
  • Step 5: Obtain Required Licenses and Permits
    Depending on the nature of your business, you may need to obtain specific licenses or permits at the federal, state, or local level. Research the licensing requirements in Hawaii and apply for business licenses in Hawaii related to your industry or activities. Common examples include professional licenses, health or safety permits, and sales tax permits.
  • Step 6: File for an Employer Identification Number (EIN)
    An Employer Identification Number (EIN) is a unique nine-digit number issued by the Internal Revenue Service (IRS) that is used to identify your LLC for tax purposes. Even if you don’t have employees, obtaining an EIN is typically required if you plan to open a business bank account, hire contractors, or file certain tax forms. You can easily apply for an EIN in Hawaii through the IRS website.
  • Step 7: Comply with Ongoing Requirements
    Once your LLC is established in Hawaii, it’s important to stay in compliance with any ongoing requirements. This may include filing periodic reports, paying Annual Report fees, and renewing licenses or permits. Familiarize yourself with the specific obligations for maintaining your LLC’s good standing in Hawaii.

Remember, starting an LLC in Hawaii involves some specific steps and requirements that may differ from other states. It’s advisable to hire an LLC Services in Hawaii that specializes in business formation to ensure that you follow all the necessary procedures accurately and efficiently. We reviewed the Best LLC Services for you to check out.

LLC Cost in Hawaii

It is crucial to consider the costs associated with the formation and maintenance of your business. The costs of establishing and operating an LLC in Hawaii can vary based on several factors, including the initial formation fees, ongoing compliance requirements, and optional expenses.

Initial LLC Costs

When starting a limited liability company (LLC), knowing the initial costs associated with forming and registering your new business entity is essential. Understanding and preparing for these expenses can help you budget effectively and set your Hawaii business on a path to success. Some common initial costs associated with forming an LLC include Articles of Organization filing fees, Resident Agent fees, and additional services, such as business name reservation fees.

Articles of Organization Filing Fee

The first step in forming an LLC in Hawaii is to file the Hawaii Articles of Organization with the Hawaii Secretary of State. This document officially creates the LLC and includes essential information about the business, such as its name, address, and Resident Agent.

This document includes essential information about your LLC, such as:

  • The name of your LLC
  • The address of your LLC’s principal office
  • The name and address of your Resident Agent
  • The purpose of your LLC (optional in some states)

You can typically file the Articles of Organization online, by mail, or in person. A filing fee is associated with this process, which costs around $50. You can also file by mailing it to Hawaii Secretary of State, which is located at Department of Commerce and Consumer Affairs, Business Registration Division, 335 Merchant St., P.O. Box 40, Honolulu, HI 96810.

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Resident Agent Fee

An LLC in Hawaii must designate a Resident Agent who will be responsible for receiving legal and government documents on behalf of the business. You can act as your own Resident Agent or appoint someone you know. Professional Resident Agent in Hawaii typically charge an annual fee ranging from $50 – $150.

In Hawaii, your Resident Agent must:

  • Be a resident of Hawaii or a business entity authorized to do business in the state.
  • Have a physical address in Hawaii (P.O. boxes are not acceptable)

Choosing a reliable and responsible Resident Agent is essential, as failure to receive and respond to legal documents can seriously affect your business.

We reviewed some of the Best Registered Agent Services in Hawaii and provided features as an add-on with their packages for you to check out.

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Business Name Reservation Fee

If you have a specific business name in mind and want to ensure it is available when you are ready to file your Articles of Organization, you can reserve the business name with the Hawaii Secretary of State.

In Hawaii, your LLC name must:

  • Include the words “Limited Liability Company,” “LLC,” or “L.L.C.
  • Not contain any words or phrases that are prohibited by state law
  • Be distinguishable from the names of other businesses registered in the state

However, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 120 days. You must file a name reservation application in the Hawaii Secretary of State to keep the name.

The online name reservation fee is $10, while the mail name reservation fee is $10. You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for a DBA (doing business as). If you have decided to file for a DBA, you can file it in several methods, online, fax, email, by mail, or in-person. However, before filing Hawaii DBA, you should know that you need to renew your DBA for up to five years, which cost $50.

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Ongoing LLC Costs

After you know the initial costs of forming an LLC in Hawaii, you should also know the ongoing costs once you have filed for an LLC. Here are the involved costs that you need to know.

Annual Report Filing Fee

To keep your LLC in good standing, you must file Annual Report with the Hawaii Secretary of State. The Annual Report provides updated information about your LLC, such as changes in address, members, or Resident Agent.

In Hawaii, the Annual Report fee costs $12.50 which can be paid every 1 year.

Franchise Tax or Annual LLC Tax

Some states require LLCs to pay an annual franchise or LLC tax, separate from the Annual Report filing fee. Franchise tax, or annual tax, is a fee imposed by Hawaii on businesses, including LLCs and Hawaii Corporations, for the privilege of operating within their jurisdiction. This tax is separate from income taxes and is usually based on factors such as the company’s net worth, assets, capital, or a fixed dollar amount, depending on the Hawaii’s specific tax regulations.

Hawaii LLC Taxes To Be Paid

The State of Hawaii is one of those rarest states in the United States that does not levy any personal income tax on businesses. However, the business LLCs must file other taxes with the State authorities.

  • Sales Tax: A sales tax is a government-imposed tax on the sale of goods and services. It is generally added to the price of a product or service at the point of sale and paid by the consumer. The tax is collected by the retailer or service provider, who then remits the collected tax amount to the relevant government authority. In Hawaii, the sales tax rate is 4.00%.
  • State Income Tax: Considering other taxes in Hawaii, you should pay for the state income tax, with a rate of 4.4-6.4%.
  • LLC Federal Self-Employment Tax: Federal self-employment tax rates are the same across all states. Self-employment taxes are imposed on self-employed individuals or members of a Limited Liability Company (LLC) taxed as a sole proprietorship or partnership.
  • Property Tax: The property tax is fixed at 0.27% of industrial, commercial, residential, agricultural, and all other properties.

Business Licenses and Permits

Depending on the nature of your Hawaii business and the location of your operations, you may need to obtain permits and business licenses in Hawaii. The costs of these licenses and permits will vary based on your specific business and location. In Hawaii, the business license ranges from $50 – $300. However, research the requirements for your LLC in Hawaii and budget for these expenses accordingly.

Optional LLC Costs

Here are the optional costs you must consider if you will form an operating agreement or hire a professional service.

Operating Agreement

Although not required by law, it is highly recommended that LLCs create an operating agreement in Hawaii. This document outlines the LLC’s ownership structure, management, and operating procedures. Hiring a business attorney to draft an operating agreement can cost anywhere from $500 to $2,000, or you can use online resources and templates to create one yourself.

Professional Services

You may hire professionals such as attorneys, accountants, or business consultants to help you establish and run your Hawaii LLC. These services can provide valuable expertise and guidance but come at an additional cost. Consider the potential benefits and weigh them against the costs when hiring professional assistance.

You may check out the Best Business Attorney Services in Hawaii that offer their professional services to form your business.

Can I Set Up an LLC For Free?

It’s impossible to set up an LLC entirely for free, as state filing fees and other costs are associated with establishing an LLC. However, you can save money by handling the formation process instead of hiring a professional service. Here are some steps to help you minimize the cost of setting up an LLC:

  • Choose your LLC’s name and check for availability in your state. This can generally be done through the Secretary of State’s website.
  • Prepare and file the Articles of Organization yourself. Hawaii offer an online filing option or downloadable forms on their websites. By completing this process independently, you can avoid paying additional fees for a professional service.
  • Act as your own Resident Agent if permitted within Hawaii. It allows the business owner to serve as the Resident Agent, saving you the cost of hiring a professional registered agent service.
  • Create your own Operating Agreement using online resources and templates. Although not required in every state, an Operating Agreement is highly recommended to outline your LLC’s ownership structure and management. By drafting this document yourself, you can save on legal fees.
  • Research and apply for any required licenses and permits on your own. Depending on your business type and location, you may need specific permits or licenses. These costs can vary, but handling the application process yourself can save you the expense of hiring a professional service.

While you can’t set up an LLC for free, taking a do-it-yourself approach and minimizing the use of professional services can help you save money during the formation process. However, handling these tasks requires time and effort, and there may be additional legal or financial risks if mistakes occur.

FAQs

What is an LLC?
LLC stands for Limited Liability Company. It is a business structure that provides personal liability protection to the owners and fewer formalities than a corporation.
What is the cost to form an LLC in Hawaii?
In Hawaii, the filing fee to form an LLC is $50 and the annual fee is $15.
Is there a publication requirement for forming an LLC in Hawaii?
Hawaii repealed its publication requirement in 2020, so there is no longer a need to publish a notice of formation in a newspaper.
Do I need to have a registered agent in Hawaii to form an LLC?
Yes, every LLC in Hawaii must have a registered agent who can receive legal documents on its behalf.
How much does a registered agent service cost in Hawaii?
The cost of a registered agent service in Hawaii can range from $50 to $300 per year.
What is the minimum number of members required to form an LLC in Hawaii?
There is no minimum number of members required to form an LLC in Hawaii.
Can an LLC be owned by one person in Hawaii?
Yes, an LLC can be owned by a single member in Hawaii.
How long does it take to form an LLC in Hawaii?
It typically takes 2-3 business days to process the LLC formation documents in Hawaii.
How often do I need to file an annual report for my Hawaii LLC?
Hawaii LLCs are required to file an annual report every year within 3 months of the end of the fiscal year.
What is the fee for an annual report filing in Hawaii?
The fee for an annual report filing in Hawaii is $15.
Can an existing company convert to an LLC in Hawaii?
Yes, an existing business entity like a corporation or partnership can convert to an LLC in Hawaii.
What is the procedure for converting an existing company to an LLC in Hawaii?
You will need to file articles of organization and a certificate of conversion with the Hawaii Department of Commerce and Consumer Affairs.
What is the fee for converting an existing business entity to an LLC in Hawaii?
The fee for converting an existing business entity to an LLC in Hawaii is $50.
Is a business license required to operate an LLC in Hawaii?
Yes, every business operating in Hawaii must have a business license.
How much does a business license cost in Hawaii?
The cost of a business license in Hawaii varies depending on the industry and county.
Does Hawaii have a sales tax?
No, Hawaii does not have a state sales tax.
Are there any other taxes that LLCs in Hawaii are required to pay?
LLCs in Hawaii may be subject to state taxes on income, general excise taxes on gross income, and unemployment insurance taxes on their employees.
What is the penalty for not filing an annual report on time in Hawaii?
Failure to file an annual report on time in Hawaii can result in a $10 late fee plus additional penalties and interest.
What is a foreign LLC in Hawaii?
A foreign LLC in Hawaii is an LLC that was formed outside of Hawaii but intends to do business in the state.
Is a foreign LLC required to register with the state of Hawaii?
Yes, foreign LLCs are required to register with the state of Hawaii before doing business in the state.
What is the fee for registering a foreign LLC in Hawaii?
The fee for registering a foreign LLC in Hawaii is $50.
Can a foreign LLC obtain a Hawaii business license?
Yes, foreign LLCs can obtain a Hawaii business license if they intend to do business in the state.
Is there a yearly fee for maintaining a registered agent in Hawaii?
Yes, there is typically a yearly fee for maintaining a registered agent in Hawaii.
Are there any residency requirements for an LLC member in Hawaii?
No, there are no residency requirements for an LLC member in Hawaii.
Can I dissolve an LLC in Hawaii?
Yes, you can dissolve an LLC in Hawaii by filing articles of dissolution with the Hawaii Department of Commerce and Consumer Affairs.
What is the fee for dissolving an LLC in Hawaii?
The fee for dissolving an LLC in Hawaii is $50.
Can LLC formation in Hawaii be done online?
Yes, LLC formation in Hawaii can be done online through the Hawaii Business Express portal.
What is the turnaround time for electronic filings through Hawaii Business Express?
Most filings through Hawaii Business Express are processed within 1-2 business days.
What are the LLC filing fees in Hawaii?
LLC filing fees in Hawaii are $50.
Is a business license required for an LLC in Hawaii?
Yes, a business license is required for an LLC in Hawaii.
What is the cost of a business license for an LLC in Hawaii?
The cost of a business license for an LLC in Hawaii varies based on the location and type of business activities.
Does Hawaii impose an annual LLC fee?
Yes, Hawaii imposes an annual LLC fee of $15 for the annual report.
Does Hawaii have an annual franchise tax for LLCs?
No, Hawaii does not have an annual franchise tax for LLCs.
How much does it cost to publish an LLC in Hawaii?
The cost of publishing an LLC in Hawaii varies based on the county but usually ranges from $30 to $150.
How often does an LLC need to file an annual report in Hawaii?
An LLC in Hawaii needs to file an annual report every year.
What is the deadline for filing the annual report for an LLC in Hawaii?
The deadline for filing the annual report for an LLC in Hawaii is the first day of the fourth month after the close of the LLC’s fiscal year.
How long does it take for an LLC to be approved in Hawaii?
It takes around 7-10 business days for an LLC to be approved in Hawaii.
Does Hawaii require a registered agent for an LLC?
Yes, Hawaii requires an LLC to have a registered agent.
Can I act as my own registered agent for my Hawaii LLC?
You can act as your own registered agent for a Hawaii LLC, but it is recommended to hire a professional registered agent.
What is the cost of a registered agent in Hawaii?
The cost of a registered agent in Hawaii varies based on the provider but usually ranges from $100 to $300 per year.
Are there any additional costs for adopting an Operating Agreement in Hawaii?
No, there are no additional costs for adopting an Operating Agreement in Hawaii.
What is the cost of incorporating an LLC in Hawaii?
The cost of incorporating an LLC in Hawaii is the same as the filing fees, which is $50.
Is an LLC in Hawaii required to maintain books and records?
Yes, an LLC in Hawaii is required to maintain books and records.
Does Hawaii tax LLCs?
No, Hawaii does not generally tax LLCs.
Are there any special permits or licenses required for an LLC engaged in specific types of business in Hawaii?
Yes, some specific types of businesses may require special permits and licenses in Hawaii.
Can a non-resident be an owner of an LLC in Hawaii?
Yes, there are no restrictions on non-residents becoming LLC owners in Hawaii.
Are there corporate income taxes for an LLC registered in Hawaii?
No, Hawaii does not levy a corporate income tax.
What is the single-member LLC fee in Hawaii?
The annual fee for a single-member LLC in Hawaii is $15 for the annual report.
When should I renew my LLC in Hawaii?
An LLC in Hawaii should renew annually on or before its anniversary date.
Can you offer me a breakdown of the fees associated with LLC renewal in Hawaii?
The renewal fee for an LLC in Hawaii is $15 for the annual report. Late filing fines are $10 per month.
After submitting articles of Organization which fee do I pay to confirm my Hawaii LLC application?
After submitting the Articles of Organization, you need to pay the $50 filing fee to confirm your Hawaii LLC application.
Does Hawaii require business license renewal?
Yes, a Hawaii business license must be renewed annually on the business anniversary date.
Does my Hawaii LLC formation need a business plan?
No, a business plan is not required to form an LLC in Hawaii.
How can you outline Hawaii business owners about the profits and losses of an LLC?
The profits and losses of an LLC in Hawaii are passed on to each member on a pro-rata basis based on their ownership interests.
If I relocate out of state, do I need to file any additional documents?
If you are relocating your Hawaii LLC out of the state, then you must submit a Certificate of Withdrawal Form for the LLC.
Does Hawaii allow series LLCs?
Yes, Hawaii does allow series LLCs.
What is the cost of forming a series LLC in Hawaii?
The cost of forming a series LLC in Hawaii is the same as the cost of forming a single-member LLC, which is $50.
Can I change my Hawaii LLC’s Articles of Organization?
Yes, you can amend your Hawaii LLC’s Articles of Organization by filing an Amendment form with the State.

Also Read

How to Save Money While Starting Your Business LLC in Hawaii

One key aspect of minimizing costs while establishing an LLC in Hawaii is to meticulously research and utilize cost-effective resources. Conducting market research is a crucial first step in this process. It helps entrepreneurs identify competing businesses, understand customer expectations, and evaluate pricing strategies. By in-depth market analysis followed by targeted advertising efforts, businesses can make informed decisions about their niche and render marketing expenses more cost-effective.

Importantly, finding affordable yet reliable office spaces is another significant aspect of saving money while starting a business in Hawaii. The beautiful islands provide unconventional opportunities to explore alternative shared workspaces or furnished office rentals rather than going for central business district locations with high rental or lease costs. Collaboration with other emerging businesses for sharing common facilities and instruments can also help to significantly cut down the office expenses, especially for startups with limited budgets. Taking advantage of digitalization to support remote working and outsourcing can lead to substantial savings on overheads.

Another way to save money during the initial stages is by forming strategic partnerships and collaborations. Working with other local businesses, whether directly or indirectly related to your industry, can help share resources, knowledge, and even marketing efforts. For instance, aligning your business with local suppliers will not only reduce shipping costs but also promote local economic growth, thereby creating a mutually beneficial relationship between your LLC and suppliers.

While securing suitable business insurance is crucial, exploring different options to make it more affordable is equally important to save money while protecting your investment. Researching comprehensive yet cost-competitive insurance providers will help, instead of opting blindly for the most popular ones. In addition, regularly reviewing and comparing insurance policies can enable entrepreneurs to better serve their specific business needs and ultimately save money.

Furthermore, leveraging technology and embracing digital tools can significantly reduce operational expenses for new LLCs in Hawaii. Today, there are plenty of high-quality online platforms and software solutions available that streamline business operations while minimizing the need for additional manpower. Utilizing such technology can enable entrepreneurs to automate tasks, streamline communication, and reduce overall expenses while maintaining efficiency and professionalism.

Lastly, utilizing reliable yet affordable accounting services is vital for saving money and ensuring smooth LLC operations. Collaborating with professional accountants or utilizing user-friendly accounting software can help entrepreneurs handle tax compliance and financial operations more effectively. By accurately tracking finances, entrepreneurs can adjust expenses, optimize investments, and identify potential areas of cost-saving within their LLC.

In conclusion, starting an LLC in Hawaii requires resourcefulness and a keen eye for saving money. Through careful market research, cost-effective resources, strategic partnerships, affordable office spaces, and leveraging technology, entrepreneurs can successfully begin their venture without excessive financial burden. By being mindful of expenses without compromising quality and efficiency, budding entrepreneurs can firmly establish their LLCs in paradise.

Conclusion

Forming and maintaining an LLC in Hawaii involves various costs, including initial filing fees, ongoing annual report fees, and taxes. Understanding and planning for these costs is essential when establishing your LLC. Additionally, consider any optional expenses, such as hiring professional services or drafting an operating agreement, to ensure the success and longevity of your LLC in Hawaii.

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