Key Takeaways

  • The initial Kentucky LLC cost is $40 to file Articles of Organization with the Secretary of State.
  • Other possible expenses include name reservation ($15), assumed name registration ($20), and optional services like expedited filings.
  • LLCs must file an annual report ($15) to remain in good standing.
  • Additional costs may include business licenses, permits, operating agreement preparation, and registered agent services.
  • Understanding ongoing and optional costs helps business owners budget beyond just the $40 filing fee.

Determining Kentucky LLC cost is an important part of deciding whether or not forming an LLC is the best option for your company.

How to Form an LLC in Kentucky

There are multiple steps you will need to take to form an LLC in the state of Kentucky.

  • Check for Name Availability - The first step in forming your Kentucky LLC is checking the state database to make sure that your business name is available. The process is simple and involves a quick search using the Kentucky FastTrack Business Organization Search.
  • Choose Your LLC Name - When deciding on your business name, you will need to make sure that the name is different from any other name found in the database. Additionally, you will need to make sure that it has an indicator following the name, such as limited liability company, limited company, or the abbreviations LLC or LC.
  • Decide the Business Address for Your Public Listing - If your business will have multiple locations, you will need to decide which address you will use for your business official headquarters address.
  • Decide Whether Your LLC will be Managed by Members or Managers - You have two options when deciding the structure of your LLC. Having managing members means that owners of the company will manage the day-to-day functions of your business. If your business is manager-managed, the company will appoint a non-owner to run the company,
  • Choose the Date to Start Your LLC - You will need to determine the date that your business will officially start operating as an LLC.
  • Appoint Your Registered Agent - A registered agent will be the person who will accept legal documents on behalf of your organization. They must be available to receive process paperwork at a physical address.
  • File Your Articles of Organization - You will need to file your articles of organization with the Kentucky Secretary of State's Office either online, in person, or by mail. Your articles of organization will also require a $40 filing fee.
  • Establish Your Company Records - Your articles of incorporation will serve as your first official corporate documents. You will also be completing additional records throughout the life of your LLC, such as your company operating agreement and the minutes of corporate meetings. Determine a system for filing and maintaining all your corporate records.
  • Draft Your Operating Agreement - You will need to create the operating agreement for your company that outlines the rules and formalities on how the business will be run. This will need to include how often you will hold meetings and how agreements can be adopted.
  • Hold Your First Organizational Meeting - The members of the LLC should meet for an initial organizational meeting and keep minutes of what went on in the meeting for the corporate records.
  • Obtain a Federal EIN Number - If your LLC consists of more than one member, or you plan on hiring employees, you will need to obtain an EIN from the IRS. You will need this number for payroll and sometimes to open a corporate bank account. There is no cost to obtain an EIN.
  • Get State Tax Identification - To operate in Kentucky, your LLC will need to file for a state tax identification number. This can be done by submitting a 10A100 form with the Kentucky Department of Revenue.
  • Open up a Business Bank Account - Once you have obtained your tax identification numbers, you will want to open a business banking account so that you can track income and expenses for the business.

Initial Kentucky LLC Filing Costs

The minimum Kentucky LLC cost is $40, which is the state fee to file your Articles of Organization with the Kentucky Secretary of State. This can be filed online, by mail, or in person. In addition:

  • Name Reservation (Optional): If you want to hold your business name before filing, Kentucky allows a 120-day reservation for $15.
  • Assumed Name (DBA): If your LLC operates under a name different from its legal one, you must file a Certificate of Assumed Name for $20.
  • Expedited Processing: Some filings may be expedited for additional fees if you need approval quickly.

These upfront costs are the baseline for creating your LLC in the state.

Other Considerations When Forming an LLC

There are other things to consider when forming your LLC, including S-corp or C-corp taxation.

When you form an LLC, the default taxation is pass-through. With pass-through taxation, the profits of the company will pass through to the member's personal tax returns. While most LLCs keep this form of taxation, they can also elect to be taxed as either an S corp or a C corp.

S corp taxation is a good option for members who make $75,000 a year or more so that they can save on employment taxes. Opting for a C corp is beneficial for those who make more than $250,000, want to provide employee benefits, or plan to reinvest most of the profits of the company back in the business.

Ongoing Kentucky LLC Maintenance Costs

Beyond the initial filing, Kentucky LLC owners must budget for ongoing compliance:

  • Annual Report Fee: Each year, your LLC must file an annual report with the Kentucky Secretary of State. The filing fee is $15 and keeps your business in good standing.
  • Business Licenses and Permits: Depending on your industry and location, you may need additional licenses or permits, with costs that vary by city or county.
  • Registered Agent Fees: While you can serve as your own registered agent, many businesses hire a professional service, usually costing between $100 and $300 per year.
  • Operating Agreement Costs: Drafting a detailed LLC operating agreement may involve legal fees if you seek attorney assistance.

Factoring in both startup and recurring expenses ensures you know the true Kentucky LLC cost.

Optional and Situational Costs

Certain LLC expenses depend on how you structure and grow your business:

  • EIN Application: Free if filed directly with the IRS, but service providers may charge between $75–$100 to obtain one on your behalf.
  • Foreign LLC Registration: If expanding into Kentucky from another state, you must register as a foreign LLC. This filing costs $90.
  • Business Insurance: While not always required, liability or workers’ compensation insurance is an additional ongoing cost for many LLCs.
  • Professional LLCs: Certain licensed professions (like doctors or lawyers) may incur different filing requirements and fees.

Frequently Asked Questions

  1. How much does it cost to start an LLC in Kentucky?
    It costs $40 to file Articles of Organization with the Kentucky Secretary of State.
  2. Are there ongoing fees for a Kentucky LLC?
    Yes. LLCs must file an annual report costing $15.
  3. Do I need to pay for a name reservation?
    Only if you want to reserve your LLC name before filing. The fee is $15.
  4. Can I form a Kentucky LLC without a registered agent service?
    Yes. You may act as your own registered agent, but many hire professional services that cost $100–$300 annually.
  5. What is the cost for a foreign LLC in Kentucky?
    Registering a foreign LLC in Kentucky requires a $90 filing fee.

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