Start Your LLC in Kentucky

How to Start Your LLC in Kentucky

Kentucky's new business industry is on an impressive upswing, evidenced by a 21% surge in new business ventures in 2021. This presents an opportune time to consider establishing your own Kentucky LLC.

To assist you with the process, our user-friendly guide will provide you with a comprehensive overview of the fundamental steps involved in forming an LLC in Kentucky, including the state's unique formation requirements.

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1. Name Your LLC in Kentucky

The first and most crucial step in establishing your Kentucky LLC is to choose an appropriate name. This step involves following Kentucky's naming regulations and ensuring that your chosen name can be easily located by potential clients. Here are the guidelines for naming your Kentucky LLC:

  1. Adhere to naming guidelines, which include:
    • Incorporating the phrase "limited liability company" or its abbreviations (LLC or L.L.C.) in your name.
    • Avoiding words that might cause confusion between your LLC and a government agency (e.g., FBI, Treasury, State Department).
    • If using restricted words like "Bank," "Attorney," or "University," additional paperwork and a licensed professional, such as a doctor or lawyer, may be required to join your LLC.
  2. Confirm name availability in Kentucky by conducting a name search on the Kentucky Secretary of State's website to ensure that the name you prefer has not already been claimed.

2. Designate a Registered Agent

The second step in creating your Kentucky LLC is to select a registered agent, which is mandatory as per Kentucky law. A registered agent is authorized to receive legal notices and official documents on behalf of your LLC.

Your registered agent can be an individual, such as yourself or an employee of your LLC, or an entity that provides registered agent services.

Your chosen registered agent must meet the following criteria:

  • If opting for an entity, it must be an official registered agent service provider.
  • The agent must have a physical address within Kentucky.
  • The agent must be accessible and available to receive documents during regular business hours.

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3. File the Articles of Organization

The third step in forming your Kentucky LLC is to file the Articles of Organization. This document serves as your business's birth certificate, indicating that your company exists, what its name is, and other important information.

The Articles of Organization is a form that you need to file with the Kentucky Secretary of State to make your business official.

To file the Kentucky Articles of Organization (Form KLC), you'll need to provide the following information:

  • The LLC name, which must meet the naming requirements discussed in Step 1
  • The name of the registered agent, who must accept the appointment by filing a document with the government
  • The address of the registered office
  • The mailing address of the LLC's principal office
  • An indication of whether the LLC will be managed by members or managers
The LLC Organizer is responsible for filing the Articles of Organization on time and ensuring the correct information is included. You can act as the organizer or use a professional service to ensure accurate and appropriate filing.

How much does it cost to file the Articles of Organization?

The current filing fee for the Kentucky Articles of Organization is $40, with additional fees for expediting the process or filing other forms. Consider using a service like our Worry-Free Compliance to keep track of and file your ongoing paperwork with the Secretary of State.

Member-managed or manager-managed?

When it comes to managing your LLC, you can choose to have it member-managed or manager-managed.

For a single-member LLC, it may be simpler to have it member-managed, while a multi-member LLC may benefit from having managers to handle important decisions and management meetings.

4. Make an Operating Agreement

An operating agreement is an internal document that outlines the guidelines for running your Kentucky LLC. This document provides answers to important questions such as:

  • Who will be responsible for managing the LLC?
  • Who has ownership interest in the LLC and how is it determined?
  • What is the process for adding new members or managers to the LLC?
  • How often will the LLC hold meetings?
  • Who gets to vote on important decisions?
  • What financial contributions have been made to the company?
  • Can a member or manager delegate their managerial authority to someone else?
  • What is the process for dissolving the LLC?
  • How will the profits be divided among the members?
While small business owners may be tempted to skip this step, it's important to note that many business disputes arise from misunderstandings that could have been avoided with a written operating agreement. Therefore, it's crucial to create a comprehensive operating agreement that covers all the important aspects of your LLC.

5. Get an EIN for Your New LLC

Obtain an Employer Identification Number (EIN) from the federal government. An EIN is equivalent to a Social Security number for your business and is necessary for opening a bank account, hiring employees, and paying taxes. Kentucky requires businesses to obtain a Commonwealth Business Identifier (CBI) as the state tax ID.

Register with the Internal Revenue Service

To obtain a Federal EIN, you can apply online or submit a form by mail. Keep in mind that if you choose to file online, you must complete the process in one session, and you should have all necessary business information ready to save time.

If you prefer to minimize contact with the IRS, consider using an EIN service of any of our partners, which is prompt and hassle-free.

Register with the Kentucky Department of Revenue

After obtaining an EIN from the federal government, register with the Kentucky Department of Revenue to acquire a CBI. Complete a separate online form to achieve this.

Other Essential Registrations

Before beginning operations, register for workers' compensation insurance if you plan to have employees. You must also register to pay payroll taxes, sales taxes, unemployment taxes, and other tax filings.

Some Kentucky businesses may need to register for specific tax applications, such as motor vehicle usage and business personal property taxes.

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