How to Start an LLC in Kentucky | 2024 Guide

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
Last updated: 
WebinarCare offers informative content for educational purposes only, not as a substitute for professional legal or tax advice. We may earn commissions if you use the services we recommend on this site.
WebinarCare is led by Steve Bennett, a seasoned expert in the business world. He's gathered a team that's passionate about giving you reliable advice on everything from starting a business to picking the right tools. We base our tips and guides on real-life experience, ensuring you get straightforward and proven advice. Our goal is to make your business journey smoother and more successful. When you choose WebinarCare, you're choosing a trustworthy guide for all things business.
Start a LLC in Kentucky

How to Start an LLC in Kentucky: If you’re looking to launch a business in Kentucky, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Kentucky. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Kentucky, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

To accomplish the steps in starting an LLC, you can hire an LLC Formation Services that will help you build your desired business. We reviewed some of the best LLC formation services and provided features as an add-on with their packages for you to check out.

LLC Service

Rating & Pricing

Top Features

Learn More

#1 Recommendation

$0 + State fee

  • Free LLC Formation

  • Legal Support

  • Highly Reputed Company

$299 + State fee

  • Single LLC formation package

  • Flat price for all services

  • Legal consultation

Steps on How to Start an LLC in Kentucky

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Registered Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Kentucky

After you have decided on the idea to form an LLC in Kentucky, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Kentucky, 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 Kentucky Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

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 filing Kentucky DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in two methods, by mail and in person. However, before filing a DBA, you should know that you need to renew your DBA from up to five years, which costs around $20.

Step 2: Hire a Registered Agent in Kentucky

Hiring a Registered Agent in Kentucky is a must since a Registered Agent is a person or business entity responsible for receiving important legal documents on behalf of your Kentucky LLC. Most states require you to designate a Registered Agent when forming your LLC.

The qualifications of a Registered Agent vary depending on the jurisdiction. Still, generally, a Registered Agent must meet the following criteria:

  • Availability: A Registered Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Registered Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Registered Agent, they must be residents of the Kentucky where the LLC was formed. A business entity acting as a Registered Agent must be authorized to do business within that state.
  • Age: A Registered Agent must be at least 18 years old.
  • Good standing: A Registered Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Registered Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Kentucky Registered Agent Services.

Step 3: File your Articles of Organization in Kentucky

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Kentucky Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Kentucky.

1. Obtain the Necessary Forms: Visit the Kentucky’s business filing office website, usually the Kentucky Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Michael G. Adams, Office of the Secretary of State, P.O. Box 718, Frankfort, KY 40602.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $40. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Kentucky, typically a stamped and approved copy of the document or a Articles of Organization.

Recommended: Filing formation papers is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom($0 + State Fee)

Once you have successfully filed your Articles of Organization and it has been approved, your Kentucky LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Kentucky Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Kentucky.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Kentucky. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Kentucky can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Kentucky might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Kentucky LLC.

Opening a bank account is necessary for Kentucky business. If you are still wondering where to open an account in your Kentucky, you should check the Best Bank for Small Business in Kentucky.

Step 7: Get a Business and License Permit

You must get a business license in Kentucky before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Kentucky ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Kentucky Secretary of State.

Cost to Form an LLC in Kentucky

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Kentucky. Articles of Organization costs around $40. The initial filing fee is $40, and the annual fee is $15.

If you forget to pay the annual fee for your Kentucky LLC, you will have a penalty of $15. However, you can check the Kentucky LLC Cost for additional information.

Advantages of Creating Kentucky LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Kentucky. Important benefits will help you set up an LLC in Kentucky.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Kentucky apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Kentucky with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Kentucky can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Kentucky will protect its assets.

FAQs

How do I start an LLC in Kentucky?
To start an LLC in Kentucky, you will need to file Articles of Organization with the Secretary of State.
What is the fee to file Articles of Organization in Kentucky?
The fee to file Articles of Organization in Kentucky is $50.
Can I file my LLC paperwork online in Kentucky?
Yes, you can file your LLC paperwork online in Kentucky through the Kentucky Business One Stop Portal.
How long does it take to form an LLC in Kentucky?
It usually takes 1-3 business days for the state to approve your LLC in Kentucky.
Do I need a registered agent for my Kentucky LLC?
Yes, you are required to appoint a registered agent for your Kentucky LLC.
Can I designate myself as the registered agent for my Kentucky LLC?
Yes, you can designate yourself as the registered agent for your Kentucky LLC.
Does a Kentucky LLC need an operating agreement?
While not required by state law, it is highly recommended that an operating agreement be created for your Kentucky LLC.
What is a Kentucky LLC annual report and when is it due?
A Kentucky LLC annual report is a yearly filing and it is due June 30th each year.
How much does a Kentucky annual report cost?
The fee to file a Kentucky LLC annual report is $15.
Can I change the name of my Kentucky LLC after it has been formed?
Yes, you can change the name of your Kentucky LLC by filing Articles of Amendment with the Secretary of State.
Can a non-Kentucky resident form an LLC in Kentucky?
Yes, non-Kentucky residents can form an LLC in Kentucky.
Can I start an LLC by myself in Kentucky?
Yes, you can start an LLC on your own in Kentucky.
How many owners can an LLC have in Kentucky?
An LLC in Kentucky can have one or more owners.
Does Kentucky require an LLC to have a business license?
Depending on your business’s industry and location, your Kentucky LLC may need a business license.
What taxes does a Kentucky LLC have to pay?
A Kentucky LLC may have to pay state taxes, including sales tax, use tax, and income tax.
How do I dissolve my Kentucky LLC?
To dissolve your Kentucky LLC, you will need to file Articles of Dissolution with the Secretary of State.
How much does it cost to dissolve a Kentucky LLC?
The fee to file Articles of Dissolution for a Kentucky LLC is $40.
Can I reinstate a dissolved Kentucky LLC?
Yes, you may be able to reinstate a dissolved Kentucky LLC within 5 years by filing a reinstatement form.
What happens if I don’t file my Kentucky LLC annual report on time?
Your Kentucky LLC may be administratively dissolved or revoked if the annual report is not filed on time.
Can I convert my Kentucky LLC into a different type of entity?
Yes, you may be able to convert your Kentucky LLC into a different type of entity, but it should be done with guidance from a lawyer.
How do I get an EIN for my Kentucky LLC?
You can get an EIN for your Kentucky LLC online through the IRS website.
Is an EIN required for a Kentucky LLC?
An EIN is not required to form a Kentucky LLC, but it is necessary if you plan to hire employees or open a business banking account.
Can I use an out of state registered agent for my Kentucky LLC?
An out-of-state registered agent can be used so long as they are authorized to do business in Kentucky.
Can two LLCs with the same name exist in Kentucky?
No, two LLCs with the same name cannot exist in Kentucky.
Is my Kentucky LLC name reserved once I file the Articles of Organization?
No, Kentucky does not reserve names when you file the Articles of Organization, so another business could use the same name.
Can I request expedited LLC processing in Kentucky?
Yes, you can request expedited processing when forming your Kentucky LLC for an additional fee.
Can I form a series LLC in Kentucky?
No, Kentucky law does not permit series LLCs.
Can an LLC be taxed as an S-corp in Kentucky?
Yes, an LLC may elect to be taxed as an S-corp in Kentucky by filing a form with the IRS.
What is an LLC?
LLC stands for Limited Liability Company.
Why should I form an LLC?
LLC formation offers personal liability protection and flexibility in taxation.
What is the process of starting an LLC in Kentucky?
The process begins by filing Articles of Organization with the Kentucky Secretary of State.
How much does it cost to start an LLC in Kentucky?
There is a filing fee of $40 to form an LLC in Kentucky.
Can I form an LLC on my own or do I need professional help?
You can form an LLC on your own, but it is recommended to seek professional help to ensure everything is done correctly.
Do I need to have a physical address in Kentucky to form an LLC there?
Yes, Kentucky requires that LLCs have a physical address within the state.
Are there any special requirements for naming an LLC in Kentucky?
LLC names in Kentucky must end with the words “limited liability company” or the abbreviation “LLC.”
How can I check if my LLC name is available in Kentucky?
You can check using the Kentucky Secretary of State website.
Can I reserve a name for my LLC in Kentucky?
Yes, Kentucky allows for reserved names for a fee of $15.
Can I change my LLC name after forming the company in Kentucky?
Yes, you can change your LLC name in Kentucky by filing Articles of Amendment.
Do I need to publish a notice of my LLC’s formation in Kentucky?
No, Kentucky does not have publication requirements for LLCs.
Can I have a single-member LLC in Kentucky?
Yes, Kentucky allows for single-member LLCs.
Do I need an operating agreement for my LLC in Kentucky?
While it is not required by law in Kentucky, it is a good idea to have an operating agreement to document LLC procedures.
How do I obtain an EIN for my Kentucky LLC?
You can obtain an EIN for free from the IRS.
Are there any tax requirements for Kentucky LLCs?
Yes, Kentucky LLCs may need to file a Kentucky business tax return annually.
How often do I need to submit an annual report for my Kentucky LLC?
Kentucky LLCs must submit annual reports every year.
What happens if I don’t file annual reports for my Kentucky LLC on time?
Failure to file annual reports on time will result in fees and eventually dissolution of the LLC.
Can I use a PO Box as the address for my Kentucky LLC?
No, Kentucky requires LLCs to have a physical address.
Do I need to have a registered agent for my Kentucky LLC?
Yes, Kentucky requires LLCs to have a registered agent within the state.
Can I be my own registered agent for my Kentucky LLC?
Yes, you can serve as your own registered agent for your Kentucky LLC.
How can I dissolve my Kentucky LLC?
By filing Articles of Termination with the Kentucky Secretary of State.
Can I convert my Kentucky LLC to a corporation?
Yes, Kentucky does allow for LLCs to be converted to corporations.
How can I update my LLC’s information (such as address or name) in Kentucky?
By filing Articles of Amendment with the Kentucky Secretary of State.
Do non-Kentucky residents form LLCs in Kentucky?
Yes, individuals and companies often form LLCs in Kentucky if they conduct business within the state.
Do I need a business license for my Kentucky LLC?
Depending on your type of business, you may be required to have a local business license or permit.
What types of businesses can form an LLC in Kentucky?
Almost any type of business can form an LLC in Kentucky, except for professions that require state licensure (like doctors or lawyers).
Does forming an LLC protect my personal assets from business debts and claims in Kentucky?
Yes, an LLC formation typically limits the personal liability of its members in Kentucky.
Can a foreign LLC operate in Kentucky?
Yes, foreign LLCs can operate in Kentucky after registering with the Kentucky Secretary of State.

Also Read

How Fast Can I Form an LLC in Kentucky

The first step in forming an LLC in Kentucky is choosing a name for your business. This may seem like a simple task, but it’s important to ensure that your chosen name is unique and not already in use by another business. You can check the availability of your desired name on the Kentucky Secretary of State’s website. Once you have chosen a name that is not already taken, you can reserve it for up to 120 days by filing a Name Reservation Request form.

Next, you will need to file Articles of Organization with the Kentucky Secretary of State. This document officially establishes your LLC and outlines important details about your business, such as its name, address, and the names of its members. The filing fee for the Articles of Organization is $40, and it can be submitted online or by mail. Once your Articles of Organization have been approved, your LLC will be officially formed.

After your LLC is formed, you will need to obtain any necessary business licenses and permits. The requirements for these will vary depending on the nature of your business and where it is located. You may need to register for state taxes, obtain a federal employer identification number (EIN), or apply for a local business license. It’s important to research and comply with all applicable laws and regulations to ensure that your LLC is operating legally.

Overall, the process of forming an LLC in Kentucky can be completed relatively quickly, especially if you have all of your necessary information and documents prepared in advance. By following the steps outlined above and staying organized, you can form your LLC in Kentucky in a timely manner and begin building your business. Starting a business is an exciting and rewarding endeavor, and by taking the necessary steps to form an LLC, you are setting yourself up for success in the future.

Conclusion

In conclusion, starting an LLC in Kentucky is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Registered Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

Categories LLC

Leave a Comment