Kentucky has some of the lowest costs to do business in the country and a very affordable cost of living. When you combine this with a low regulatory environment and high quality of life, the Blue Grass state is a great place to start a business. If you are looking to start an LLC in Kentucky, this guide will walk you through the step-by-step process to help get your business up and running in no time.
What are the benefits of an LLC?
- LLCs provide liability protection for business owners, meaning that the owners’ assets will not be at risk.
- Easy to set up and manage
- One person may form an LLC
When do you need to form an LLC?
If you are exploring starting a business or perhaps you are already in business as a sole proprietor it is a good idea to form an LLC. If you are operating a business without an LLC you could be placing yourself and your personal assets at risk.
While it is not required to form an LLC before starting a business the benefits include accounting and tax standardization, limited liability risk right away, and it will be easier to stay organized since all of your business-related expenses will be tied to one business bank account.
Step 1: Choose your company name
The first step in starting an LLC is to select a business name. It is essential to choose a business name that is unique from existing entities.
Perform a Kentucky business name search
The Kentucky Secretary of State maintains a database of business entities registered in Kentucky that is free for the public to search.
Your Kentucky LLC must contain “Limited Liability Company” or include the abbreviation LLC or LLC. Prefixes, suffixes, and plural versions of an existing entity name do not make it unique.
For instance, if you wanted to start a breakfast restaurant called Italian House LLC you would want to make sure there wasn’t a similar sounding name like Italian House Stop Cafe etc. The intent with naming rules is to create a clearly distinguishable name that avoids confusion for the public so if you find a name that is somewhat similar to the one you are considering it is probably best to move on to another name idea.
If you are struggling to develop a Kentucky LLC name, one option is to use a business name generator, which can help come up with hundreds of name suggestions in seconds.
Perform a trademark search
If you intend on using your business for a commercial purpose you will want to perform a trademark search before selecting your Kentucky business name. A trademark will help protect against infringement of unauthorized use of your business name and logo without your permission and can eventually become a valuable asset if your business grows.
Avoid using a trademarked or similar name to an existing business to protect yourself.
Find out if your proposed business name is available by conducting a trademark search online at the US Patent & Trademark Office.
Determine if you want to use a DBA name
A DBA is a registered “Doing Business As” name and can be used instead of the legal LLC business entity name.
A DBA allows you to have a name for your business that reflects what it does or who its customers are. Business owners use their company’s DBA names on checks, orders, contracts, and correspondence when doing business.
Some of the main benefits of a DBA:
- Flexibility: If you have your LLC established, you can use DBA names instead of creating separate entities for each new venture.
- Branding: A DBA name is easier to brand and identify for customers.
- Expansion: It is easy to file DBAs in different geographical locations to target other customers and appear hyper-focused in your marketing.
You do not need to operate under a DBA if you use your Kentucky business name for all business purposes. However, using a DBA name will not affect your Kentucky LLC name registration.
Register the domain name
Once you decide on a business name, check to ensure that the domain name is available. can show you which domain extensions are available for your business name.
Although .com domain names are ideal, extensions like .net, .co, and .biz are becoming more commonplace
Register social media profiles
It is vital to have a solid social media presence in today’s business environment. So be sure to register for your business name on the different social media platforms ahead of time so that no one can sign up for them.
Step 2: Register Kentucky LLC
After choosing a name, start the registration process online at the Kentucky Secretary of State.
Registering your LLC in Kentucky is a relatively straightforward and quick process.
Select a registered agent
A registered agent is required for a Kentucky LLC and is an individual point of contact for Kentucky designated to receive official correspondence from the Kentucky Secretary of State. If you work from home a registered agent can help prevent your home address from being solicited by business mail since the registered agent’s address will serve as the official address for the business.
If you are not going to be your Kentucky LLC’s registered agent, find a substitute Kentucky resident or company to serve in this role. Be sure that the registered agent’s address is included in all your business documents and correspondence if you intend to use a different registered office.
What are Kentucky registered agent requirements?
A Kentucky registered agent:
- must be over the age of 18
- have a physical street address in Kentucky
- be available during regular business hours
How to register
Once you choose a registered agent and perform a Kentucky business search, the next step is to fill out the Kentucky Articles of Incorporation.
The form can be filled out online and requires the following information:
- Name of corporation
- Registered agent information
- Email address
The Kentucky Secretary of State has done a great job revamping its website to make online filing as easy as possible. If you want to mail in your business forms or file them in person you can do so at the following address:
Commonwealth of Kentucky
Division of Business Filings
P.O. Box 718
Frankfort, KY 40602
Step 3: Next steps after filing Kentucky LLC
Apply for an EIN
The IRS requires each LLC to have its own unique employer identification number. The Internal Revenue Service website can generate a federal tax identification number. An EIN makes it easy to file your business taxes and stay in compliance with the IRS and is similar to a Social Security number for your business.
EIN’s also add credibility to your business and are required for compliance purposes from time to time by companies that have to pay you for goods and services. An EIN is also required to open a business bank account and will help you establish business credit in the event you need to take out a business loan.
Start a business bank account
A business bank account is required for LLCs to start conducting business. Therefore, it is highly recommended that you start a low-risk bank account to start receiving income and paying any start-up expenses.
After the LLC has been established, your business bank account will be used for payroll, payment of bills, a deposit of earnings from your business, and any other financial transactions your business may have.
Back office tasks such as bookkeeping can also be performed on your start-up bank account to keep start-up costs low.
Apply for a business license and permits
If you are planning on selling goods or services in Kentucky, you will want to look into whether or not the city or industry requires a particular business license.
The best way to get more information on the different license requirements throughout the state is to visit Kentucky.gov.
Prepare an LLC operating agreement
An operating agreement is a contract between the LLC owners that lays out the financial and functional decisions of managing a Kentucky LLC. An operating agreement is needed if there are multiple business owners of a Kentucky LLC.
An operating agreement can be as simple or in-depth as desired, but it is important to have one in writing before starting any significant operations within the business.
File annual report
Kentucky corporations must file an annual report through the Sunbiz portal to stay in good standing with the Department of State. A Kentucky annual report is not a financial statement and the main intention behind Annual Reports is to help keep track of active businesses in Kentucky and ensure that the state has the most up-to-date contact information for businesses on file with the Secretary of State.
How much does it cost to file a Kentucky LLC?
The Kentucky filing fee for a Domestic LLC in Kentucky is $40. You can get a complete list of fees for all business forms by visiting the fees page on Kentucky.gov.
Recommended LLC formation services
- Northwest Registered Agent: Started as a registered agent service but expanded into business formations and offered additional professional services like mail forwarding and virtual business address services.
- ZenBusiness: Another recommended online business formation platform that can help set up an LLC in Arizona. They offer a full suite of services for new business owners, including operating agreements, business websites, domain names, and more.
- Incfile: A top online incorporation service provider in the market that offers various business filing services like LLC formation, Registered Agent, State Filings, and Compliance Filings.
Kentucky LLC FAQs
How do I get an LLC in Kentucky?
The best way to get an LLC in Kentucky is to file articles of incorporation form with the Kentucky Secretary of State. This will make your business official with the State.
Does a Kentucky LLC require an operating agreement?
Kentucky LLCs do not require an operating agreement but they can be a good idea if you have many owners in a business.
Do I need a license for an LLC in Kentucky?
There is no generic business license outside of your LLC registration, but specific licensing requirements exist in certain cities and industries. The One-Stop Business portal is a great resource for information on which industries require them.
Does Kentucky have an annual LLC fee?
Yes, there are annual reports that active LLCs must file with the Department of State to stay in good standing. The cost to file an annual report is $15 for LLCs.
How do you look up who owns a Kentucky LLC?
The best way to look up who owns a Kentucky LLC is to perform a Kentucky business search through the Kentucky Department of State. Searching is free for the public, and the database maintains a list of corporations that have registered their business with the state.
What is a Kentucky Certificate of Good standing?
A Kentucky certificate of good standing indicates that a business is in good standing with the state and has paid all applicable business fees to perform business within the state. Companies can get their certificate of good standing by visiting the Kentucky Secretary of State website.
How do you terminate a Kentucky LLC?
You can dissolve a Kentucky LLC by filling out an Articles of Dissolution form and filing it with the Kentucky Secretary of State. If you don’t plan on being in business, terminating your business is a good idea, so you won’t be responsible for biennial business filing fees.
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