How To Form An LLC In Kentucky: Everything You Need to Know
If asking how to form an LLC in Kentucky, you must register with the Kentucky Secretary of State by meeting the formation and naming requirements, filing the necessary forms, and paying all fees. 3 min read
If asking how to form an LLC in Kentucky, you must register with the Kentucky Secretary of State by meeting the formation and naming requirements, filing the necessary forms, and paying all fees. While it might seem complicated from the outside, establishing an LLC in Kentucky is surprisingly affordable and straightforward if you know which details the state requires.
What Are the Benefits of Forming an LLC?
A limited liability company (LLC) is a hybrid business entity that has characteristics of both a sole proprietorship and a corporation. LLCs allow owners, who are called members, to protect themselves from personal liability related to business debts and lawsuits. An LLC also provides flexibility in terms of organizational structure, offering pass-through taxes and fewer regulations than other business types.
Drafting Your LLC's Articles of Organization
One of the most important steps in creating an LLC is to create your Articles of Organization and file them with the Division of Business Filings. To do this, obtain a form from the Secretary of State website. This form includes two pages:
- The form to fill out and file
- Instructions for filling out the form
Read through the instructions before filling out the first page.
Next, choose a name for your LLC. Most states, including Kentucky, require you to follow certain guidelines when selecting a business name.
- The business name must contain “Limited Liability Company,” one of its abbreviations (LLC or L.L.C.), or “limited company”
- If using “limited company,” abbreviate it to LTD CO
- The name must only use English letters and/or Roman or Arabic numerals
- Your LLC name must be distinguishable from any other business name currently registered or reserved with the Office of the Secretary of State or any federal or state agency
- When you've decided on a name, perform an online search with the Secretary of State's database to make sure it is available for use; you can also call the Secretary of State at 502-564-3490
- Have a few alternate names in mind in case your first choice is taken
- Make sure a suitable domain name is available for your business, and buy it
- Fill out the optional form, and pay the $15 filing fee to reserve your name for 120 days
- List your LLC's registered agent and registered office in the Articles of Organization
- The registered agent must live in Kentucky and be available during regular business hours to accept legal documents on your company's behalf; the LLC cannot name itself as registered agent
- Include your LLC's mailing address in the Articles of Organization
- Decide if the LLC is member-managed or manager-managed
- Enter a delayed effective date, if needed
- Have every member of the LLC sign the Articles of Organization
- Include each individual's name, title, and address along with the signatures
- Don't forget to date the form
- File the Articles of Organization with the Secretary of State
Double-check the form to make sure the information is correct and complete. You can mail the form to the address listed on the instructions page or file it online. Either way, you must pay the $40 filing fee.
Setting Up an LLC in Kentucky
After you've filed your Articles of Organization, you must take a few more steps to establish your Kentucky LLC.
- First, draft your operating agreement. This is a document created by the LLC members describing how to govern the business. The operating agreement should outline each member's role, voting rights, financial allocations, how new members will be added, how existing members will be removed, and how the agreement itself should be changed. Kentucky doesn't require you to file the operating agreement with the state, but you should keep a copy on file with your registered agent.
- Next, obtain an Employer Identification Number (EIN) from the IRS. You will need an EIN to pay state and federal taxes, open a company bank account, and hire employees. Apply for an EIN online, by phone, or by mailing Form SS-4 to the IRS.
- Once you've completed these official documents, you can open a bank account for your LLC, obtain the necessary permits and business licenses, and register with the Kentucky Department of Revenue.
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