Kentucky LLC Cost: Everything You Need to Know
Determining Kentucky LLC cost is an important part of deciding whether or not forming an LLC is the best option for your company.3 min read
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.
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.
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