A Hawaiian LLC provides limited liability protection against creditors and bad business debt. But speaking of business funds, it is essential to have a good overview of the cost to set up and run this type of business structure in the first place.
Working with our legal team and browsing the Hawaiian Secretary of State’s website, we've summarized all the costs you may bear when starting an LLC in Hawaii.
Here’s what you need to know.
Quick Summary
- Forming an LLC in Hawaii costs $51 for the Articles of Organization, paid to the DCCA.
- All businesses in Hawaii pay a GET tax rate depending on the sector the company operates in.
- All LLCs in Hawaii must pay an annual report fee of $50 plus a biennial fee of $25 to avoid dissolution by the SOS.
How Much Does an LLC Cost in Hawaii?
An LLC in Hawaii costs $51 to file your Articles of Incorporation with the Department of Commerce and Consumer Affairs (DCCA), Business Registration Division (BREG).
However, there are other filing costs that business entities pay during the process, such as registered agent services, LLC taxes, and annual and biennial reports.
Hawaii LLC Filing Fee
The LLC filing fee in Hawaii is $51. $50 is for the Articles of Organization, and the $1 is the state archives fee [1].
If you want a faster delivery process, you can pay an extra $25 for expedited shipping.
LLC filing can be done online, by mail, or by fax. If you're using paper filing methods, ensure the details you fill on the forms are legitimate, and the document is signed with black ink.
Hawaii Registered Agent Service Fee
If you're forming an LLC in Hawaii, you need a registered agent to create and file all legal documents.
In Hawaii, apart from the option of acting as your own registered agent, you can hire a professional service to handle your correspondence.
Ensure the Hawaii registered agent you hire has a business street address in Hawaii, is of legal age, and can be available during regular office hours.
Depending on the company you collaborate with, the registered agent service fees may range from $100-$300 per year.
Hawaii Tax Rates
There are several state tax filing requirements for company LLCs in Hawaii [2].
- State income tax: The state income tax is imposed on any income you pay yourself. The tax rate ranges from 1.4% to 8.25%, depending on the aggregate amount of taxable income.
- GET tax: There is no sales tax in Hawaii. Instead, it has a General Excise Tax (GET) set at varying rates for certain sales activities. For example, you're subject to a 0.5% tax rate if you run manufacturing and wholesaling. If you engage in loans or insurance commissions, you pay 0.15% GET tax.
- Self-employment tax: Members of a Hawaii LLC must pay self-employment tax on any profits they get from the company. The self-employment tax rate is set at 15.3%.
Withholding payroll tax: Hawaii requires employers to withhold payroll tax from employees' wages. The typical withholding rate is 7.65% of the employee's taxable salary.
Other LLC Filing Costs
Let's look at additional LLC filing costs in Hawaii.
1. Hawaii LLC Name Reservation
Suppose you're not planning on incorporating your Hawaii LLC immediately.
In that case, you can pay a $10 fee to the Hawaii DCCA through the state's Business Express site to reserve a company name for 120 days.
To ensure the name you select complies with state standards, conduct a Hawaii LLC business search and educate yourself on business name regulations.
2. DBA Name
In Hawaii, there are three different ways of choosing a business name:
- Use your official name
- Use the legal business name
- Use a trade/DBA name
A DBA or an assumed name is a different name for your business other than the legally registered name.
A DBA in Hawaii costs $50 and helps open a business bank account or diversify your brand name.
3. Certificate of Good Standing
Some financial institutions will want you to prove that your LLC complies with all applicable laws and tax regulations. This is where the Certificate of Good Standing comes in.
You may purchase one by paying $7.50 and requesting it from the DCCA, BREG.
4. Certified Document Copies
These are true copies of the primary documents certified and endorsed by the state. Certified copies include articles of organization or a Hawaii LLC operating agreement.
You can purchase these documents online through the Hawaii Business Express website, where regular copies cost a flat rate filing fee of $3, while certified documents cost $10 each [3].
5. Annual Reports
An annual report is an official file that documents the company's finances and activities of the previous fiscal year.
In Hawaii, you must submit an annual report for $50 for your LLC to remain in good standing; if you miss the deadline, you'll be subject to a $10 penalty.
If you want to receive email reminders, so you don't miss your filing deadline, it's a good idea to do your filing online so that notifications are sent to your email.
Also, the payment system will depend on your filing method: if you file online, you'll have to pay using a credit card and cash, money order, or check for paper filing.
6. Biennial Report
Also, Hawaii requires LLCs to pay a $25 biennial report fee. The purpose of this charge is to inform the state of any modifications that occur to the company and is required every two years.
For instance, you must file a biennial report if you've changed the business name, added a new shareholder, or altered the registered agent service.
7. Federal Tax Id/EIN
An Employer Identification Number is a nine-digit code that the Internal Revenue Service assigns to every company.
The EIN is necessary for filing state and federal taxes, applying for business entity loans, or proving credibility.
You can file for an EIN on the IRS website for $0 or hire a professional company and pay a filing fee of $50-$100.
8. Hawaii LLC Amendments Filing
All vital information about your Hawaii firm is stated in your business formation paperwork at the time of establishment. However, these details might alter over time.
If they do, you must register any adjustments or corrections for a $25 filing fee with the Business Registration Division (BREG) of the Hawaii Department of Commerce and Consumer Affairs.
You can do this yourself or hire an LLC formation service to submit it on your behalf.
Foreign LLC Registration
Companies classified as foreign are those that were established in another state or nation.
To conduct business in Hawaii, these organizations must register with the Hawaii Department of Commerce and Consumer Affairs, Business Registration Division's Office for a Certificate of Authority.
A certificate of existence from the federal state of incorporation must be submitted with the foreign LLC registration, which costs $50 and $25 for expedited filing.
You’ll also need to attach your articles of organization and an operating agreement.
FAQs
Is Hawaii an Ideal State For an LLC?
Yes, Hawaii is an ideal state for an LLC, considering its affordable fees and easy formation process. Also, Hawaii offers a flexible taxation system for LLCs and other business structures.
How Long Does It Take To Incorporate a Hawaii LLC?
It takes 7 days to incorporate a Hawaii LLC online. If you do it via mail, it will take 3 weeks, including mailing time. However, it's a great thing that you can pay for expedited shipping.
Are There Annual LLC Fees in Hawaii?
Yes, there are annual LLC fees in Hawaii paid to the department of commerce and consumer affairs. This is the $50 and $25 yearly and biennial report fee, respectively. There are also taxes that you'll pay depending on what business you do.
Do You Need Professional Help with Your Hawaii LLC?
A Hawaii limited liability company is a fantastic choice if you want to launch a business. It offers limited liability protection, financial flexibility, and cheap upkeep costs.
Although you can complete the formation procedure on your own, hiring a professional service might save you from making costly mistakes.
If you're looking for a Hawaii LLC service to get your company off the ground, here's a list of the best LLC services in Hawaii that check all the right boxes, from service features and price points to faster turnaround and lifelong customer service.
References:
- https://cca.hawaii.gov/breg/registration/dllc/
- https://tax.hawaii.gov/geninfo/get/
- https://cca.hawaii.gov/breg/faqs/general/how-do-i-request-a-certified-copy-of-a-document/
