Last Updated on September 13, 2020
Cost to Form an LLC in Kentucky - $40
Filing Time - It normally takes 1week for the LLC paperwork to be approved in Kentucky. Expedited processing is also available for an additional fee.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Kentucky. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Kentucky without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Kentucky is something most people can do on their own, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A KENTUCKY LLC
The steps for filing online or by mail are largely the same. The screenshots show filing online.
After registering, select Register a new business.
Step 1: Business Formation
You are asked to select the choice that best describes the business or organization you are organizing. Most new LLCs will choose “A business that will be formed in Kentucky”. The other choices are for out-of-state businesses wanting to do business in Kentucky. Assuming your LLC will be located in Kentucky choose the first.
Next, you are asked to select the business structure. Assuming the chosen entity is an LLC, select “Limited Liability Company” in the drop-down menu.
Step 2: Disclaimer
Read and agree to the disclaimer and then click on the “Next” button.
Step 3. Registration Contact Information
Enter the Name, email address and phone number for the individuals representing the business. Anybody can be the registrant including a member, attorney, accountant, friend, etc. Enter the contact information and click on “Add Registration Contact”.
Step 4: Name the LLC
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the Kentucky Secretary of State. Check on available LLC names before filing.
Next, check the box if this will be a veteran-owned business.
Last, the name of the LLC must include a suffix from the drop-down menu. Some of the more popular ones are:
- Limited Liability Company
- Limited Liability Co.
Enter the name of the LLC you would like to use in the “Business Name” field, accept the terms of the disclaimer and click “Search”. If the name is available, a message will show up saying the name is available and whether you would like to request that name for the LLC.
If the name is not available, a message saying “Business Name Unavailable or Invalid due to the following reasons”
You may also want to see if a domain name is also available to have a matching website address.
Step 5: Registered Agent
To have an LLC in Kentucky, a Registered Agent must be identified. The Registered Agent can either be a resident of Kentucky (select “Individual” from the drop-down menu) or a registered agent service (select “Business” from the drop-down menu). The agent must have a physical address in Kentucky to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
When selecting “Individual” if the registered agent is going to be the same person in Step 3: Registration Contact Information, select the checkbox to copy that information over. If this is a different person, add their contact information, address, county, email, and phone number.
If you were to hire a registered agent service, their contact information will go in these fields.
In either case, the ATTN field is optional and not used by most when filing the LLC.
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
Step 6: Principal Office Address
In this section, enter the street address, city, state and zip code of the initial principal office. This address can be the physical address of the LLC or it can be the address where the business records are stored. This does not have to be an address in Kentucky, but you may not use a PO Box for the designated office.
Step 7: Member-Managed of Manager-Managed
This section asks if the LLC is Member-Managed or Manager-Managed.
- Member-Managed LLCs have members (owners) that are active in the day-to-day operations of the business.
- Manager-Managed LLCs have managers hired by the members to run the LLC, similar to a CEO of a corporation.
Most LLCs are member-managed. Select the one than applies and click on “Next”.
Step 8: Business Representative
This section asks for information about the business representative. If one of the members is filling out the Articles of Organization, most will select “Individual” from the first box and LLC Organizer from the second. An additional menu will pop up asking for contact information. Once entered, click on the “Next” button to continue.
Step 9: Delayed Effective Date
The next step asks about the effective date of the LLC. By default, the LLC is effective on the date submitted. If you prefer to have the LLC officially start at a later date (up to 90 days), select “Yes” to the question “Do you want to enter a delayed effective date and time?” and enter the date and time in the following fields. Otherwise, select “No” and click on “Next” to continue.
Step 10: Business Administrators
One business administrator must be assigned to the Limited Liability Company. Most will select the checkbox to make the business representative be the administrator. Select the checkbox if that is so, otherwise add a new contact for the business administrator.
Step 11: Electronic Signature
Select the name of the business administrator from the drop-down menu and sign the Articles.
Next, the registered agent has to sign as well.
Step 12: Registration Summary
Review that the information is correct. If so continue.
Step 13: Pay and File
Pay and file the Articles of Organization.
In approximately 24 hours if filing online or around a week if filing by mail, your new Kentucky Limited Liability Company will be approved.
If mailing the Articles of Organization, send payment to:
Secretary of State
PO Box 718
Frankfort, KY 40602
That concludes the basics of forming an LLC in Kentucky. Remember, even though you can do it yourself, there is more to an LLC than just the filing. If you have questions, work with an attorney or a specialized entity formation company such as IncFile or Inc. Authority to make sure everything is done correctly.
If you have questions, contact the Kentucky Secretary of State at 502-564-3490.
Professional services like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Kentucky Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Sales Tax Permit – In order to sell products and certain services, registration with the Kentucky Department of Revenue will be necessary.
File Annual Reports
LLCs are required to file an annual report with the Kentucky Secretary of State. The annual report updates ownership information and other details and costs $15 per year.