How to Form an LLC in Kentucky in 7 Steps

You may have to pay various fees to startup and maintain your Kentucky LLC and ongoing fees, taxes, and other business costs can vary depending on what kind of business your LLC does and where it is located. A list of common LLC forms and fees can be found on the Secretary of State's website.

Domestic LLCs must pay a filing fee of $40 when they submit articles of organization to the state. For foreign LLCs, the fee is $90.

You must pay a $15 annual report fee each year to maintain your LLC in Kentucky. If your LLC is required to have any licenses and permits, you also need to pay their renewal fees.

A few different types of LLCs can be created in Kentucky.

• Single-member LLC: A single-member LLC is an LLC with only one member. For tax purposes, single-member LLCs are considered disregarded entities. This means the owner doesn't file a separate business tax return and instead pays any taxes owed on business profits on their individual income tax return.
• Multi-member LLC: A multi-member LLC is an LLC with more than one member. For tax purposes, multi-member LLCs file and pay taxes like partnerships.
• Professional LLC: A Professional LLC is an LLC designed specifically for businesses that provide licensed professional services, such as doctors, dentists, psychologists, occupational therapists, veterinarians, engineers, architects, accountants, physical therapists, and attorneys.

A certificate of formation is like a charter document for an LLC and confirms it's authorized to do business in the issuing state. While Kentucky doesn't require businesses to have a certificate of formation, the articles of organization filed to form your LLC can verify that your business is a valid legal entity in the state. You may need your articles to open a bank or merchant account, get a business loan, or handle other tasks.

You should have your articles of organization from your initial business formation filing with the state. You can request a certified copy from the Kentucky Secretary of State online for a $10 fee.

A certificate of good standing is another document that confirms your company is legally registered with the state and in compliance with its laws. In Kentucky, it's known as a certificate of existence or authorization. You may purchase a certificate of existence for a $10 fee.

To form your Kentucky LLC, you must choose a valid business name, select a Kentucky registered agent, and file your articles of organization with the Secretary of State. You don't need to file an operating agreement to form your LLC, but it's helpful to have one to protect your company's status, ensure members agree on expectations, and avoid issues or misunderstandings that might arise between LLC members.

One of the main reasons business owners create LLCs is for the advantage of limiting their personal liability. This feature protects LLC owners' personal assets from their company's liabilities. In other words, your cars, home, and personal accounts will not be on the line if someone sues your LLC or collects business debts. You do not receive this benefit with all business entities. With a sole proprietorship, for example, your personal assets could be in jeopardy if your business becomes unable to pay its debts.

Further, LLCs have the benefit of pass-through taxation. With pass-through taxation, LLC members pay taxes on the company's profits through their own personal income tax returns. This is similar to partnership business taxation. Pass-through taxation can be preferable to the way corporations are taxed, which can result in double taxation. Double taxation occurs when a corporation pays taxes on its profits at the corporate level and then stockholders pay taxes on their dividends.

Finally, the LLC structure is simpler and more flexible than that of a corporation. You will find that there are fewer formalities with an LLC and that it is easier to maintain. Unless you plan to have many investors or issue stocks, an LLC is often a good choice for small businesses.

To maintain your Kentucky LLC, you need to file an annual report with the Secretary of State's office and pay a $15 fee by June 30 of each year. You can file online or print your annual report and return it by mail or in person. You also need to renew any required business licenses or permits and pay local, state, and federal taxes.

No. Articles of organization are what you file with the state to establish your business as a domestic LLC in Kentucky. An operating agreement is an internal company document that you use to form key agreements among your LLC members. It's an optional agreement that is not required to be filed with the state. But you should keep it on record with your important company paperwork. You may need to show your operating agreement to certain professionals like accountants and lawyers before obtaining services.

Yes. You can do business under a name other than your LLC's name but need to register this name with the Secretary of State. In Kentucky, this is called an assumed name. You may hear people refer to it as a fictitious business name or a DBA (“doing business as") name in other states.

Businesses commonly use an assumed name when they would like to offer a different type of product under a new name or branch into another line of business. As with your LLC name, your assumed name must be distinguishable from all other registered Kentucky business names.

To legally operate under an assumed name, you need to file a certificate of assumed name with the Secretary of State and submit a $20 filing fee.

Certain types of businesses may need to have a special license or permit if they offer professional services. You can find out whether you need a special license or permit by searching the Occupational License/Permits database on Kentucky's One Stop Business Portal. Depending on where your LLC does business, you may also need to apply for local licenses or permits. You should contact the city or county government where your LLC is located to find out what's required.

Yes. You can apply for an LLC online by filing your articles of organization with the Secretary of State through their One Stop Business Portal. You can also choose an LLC formation service to handle the online filing of your LLC in Kentucky.

The mailing address for the Kentucky Secretary of State is:

Division of Business Filings
P.O. Box 718
Frankfort, KY 4060

The physical office is located at:

Secretary of State
700 Capital Avenue, Suite 152
Frankfort, KY 40601

Yes. If none of your LLC members are willing and able to act as the registered agent, you can use a registered agent service. With a registered agent service, you pay a small fee to another business or individual. In exchange, they agree to receive your LLC's legal papers on your behalf.

A domestic LLC is any LLC formed within the state of Kentucky.

Entrepreneurs looking to do business in states outside of Kentucky should register as a foreign LLC in those states. Foreign LLC filing requirements vary by state, so check each state's Secretary of State's website for instructions and filing fees. You will also be asked to submit proof of your LLC's good standing in its home state of Kentucky, usually by providing a copy of your LLC's certificate of existence or authority.

You can register a foreign LLC in Kentucky by completing a certificate of authority and paying a $90 state fee. You file with the Secretary of State but if you pay the fee by check, make it payable to the Kentucky State Treasurer.

To dissolve a Kentucky LLC, you must file articles of dissolution and pay a $40 filing fee.

An anonymous LLC shields the identity of the LLC members and managers. Kentucky does not currently allow anonymous LLCs. The only states that permit the formation of anonymous LLCs at this time are Delaware, New Mexico, Nevada, and Wyoming. If you have privacy concerns, you can use a professional registered agent service to receive service of process instead of your own address.