Last Updated on September 13, 2020
Hawaii LLC Formation Costs
Hawaii LLC Filing Fees - $50
Recurring Fees - $15 Annual Report Fee
Filing Time - It normally takes 1-2 weeks for the LLC paperwork to be approved in Hawaii. Expedited processing is also available for an additional fee.
Don’t want to form an LLC by yourself? - Let IncFile guide you through the LLC formation process so you know everything was done right. Only pay state fees!
The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Hawaii. 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 Hawaii 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 Hawaii 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!
To form a Limited Liability Company in Hawaii, file the Articles of Organization with the State of Hawaii, Business Registration Division. The LLC filing fee for standard processing is $51. Approval for the LLC typically takes 1-2 weeks. Expedited processing is available which shortens the approval process to 2-3 business days and is an additional $25.
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A HAWAII LLC
The steps for filing online or by mail are largely the same. The screenshots show filing online.
- Go to https://hbe.ehawaii.gov/BizEx/home.eb and select “Use QuickFile”.
- Enter the email address and password used to register with DCCA and login.
- Next, click on the “Continue to Homepage” link. Then click “Use QuickFile”.
- Look for ‘Initial Business Filings’ and click the “LLC-1 Articles of Organization for Limited Liability Company” link. You will be given a prompt to use the wizard or continue with the filing. For the purposes of this step-by-step guide, we will just continue with the filing.
Step 1: Name the LLC
Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names in the state of Hawaii. Check on available LLC names.
The name of the LLC must include one of the following designators at the end of the business name:
- Limited Liability Company
- Limited Liability Co.
- Ltd. Liability Company
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Step 2: Mailing Address of Principal Office
In this section, enter the street address, city, state, zip code and country 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 Hawaii, but you may not use a PO Box for the designated office.
Step 3: Registered Agent
To have an LLC in Hawaii, a Registered Agent must be identified. The Registered Agent is either a resident of Hawaii (select Individual under Agent Type) or a registered agent service (select Entity under Agent Type and enter their state of incorporation from the State drop-down menu). The agent must have a physical address in the state to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of 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.
Learn more about the requirements of a registered agent in Hawaii.
Step 4: Organizer Information
The LLC Organizer is someone who is involved with the formation of the Articles of Organization. The Organizer may or may not be a member, such as a mentor, attorney or accountant, but the initial members could be listed as an organizer.
At least one organizer has to be listed.
Learn more about who can be an LLC Organizer.
Step 5: Period of Duration
Most businesses intend to exist forever and would suggest “At-will”. If you have a specific end date in mind (typically used for investment-related businesses) choose the close date.
Step 5: 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.
If the LLC is Manager-Managed, select option A or option B if the LLC is Member-Managed.
If A was selected, list the total number of members of the LLC.
In section C, enter the name and address of each of the members and/or managers.
Step 6: Liability
This section has options on if the members will be liable for the debts and obligations of the LLC.
Most people select “Shall not be liable for the debts, obligations, and liabilities of the company”.
While you can select this option, if the LLC takes out a bank loan, expect the bank to require a personal guarantee from the members that will require them to pay back a loan personally.
Step 7: Signature
Have an individual authorized to sign contracts to sign.
Step 8: Review
Review that the information is correct.
Step 9: Pay and File
Pay and file the Articles of Organization.
In approximately 2-3 business days if expedited or up to 2 weeks with standard processing, the LLC will be approved.
If mailing the LLC-1 form, send payment to:
State of Hawaii – DCCA
Business Registration Division
PO Box 40
Honolulu, HI 96810
If you have questions, contact the Hawaii Department of Commerce and Consumer Affairs at 808-586-2727 or firstname.lastname@example.org
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
Related: Hawaii operating agreement template
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 Hawaii 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 counties in Hawaii 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.
- General Excise Tax License – In order to sell products and certain services, registration with the Hawaii Department of Commerce and Consumer Affairs will be necessary.
File Annual Reports
LLCs are required to file an annual report with the Hawaii Department of Commerce and Consumer Affairs. The annual report updates ownership information and other details.