How Much Does an LLC Cost in Kansas (What You Need to Know)
When forming a Kansas LLC, you must follow specific filing processes, including paying the necessary filing fees to the Kansas Secretary of State.
Through my experience as a Mergers and Acquisitions specialist and after consulting LLC experts in the state, we'll share our insights regarding the initial costs and filing fees associated with forming a business in Kansas.
As you think about creating an LLC, enlisting the services of a professional Kansas LLC company can help prevent missteps that might extend the time it takes to start your LLC.
Quick Summary
- It costs $165 to file the Articles of Organization for your Kansas LLC.
- Once the business has been approved, additional expenses you may incur are licenses and permits, taxes, annual reports, and other pertinent documents.
- The sales tax rate in Kansas is 6.5%, according to the Kansas Department of Revenue.
- My colleagues with LLCs in Kansas attest that the state does not require a formally structured company.
Cost to Start an LLC in Kansas
Before an LLC can legally operate in the state, there are mandatory fees and optional expenses that must be covered. These are the following:
1. LLC Formation Filing Fee ($165 - Mandatory)
An LLC in Kansas costs $165 to submit your Articles of Organization to the Secretary of State.
Expedited service is not offered in the state. However, I find it helpful that online applications are immediately approved and mail filings are reviewed and processed within 2-3 business days.
2. Registered Agent Fee ($80-$300 Annually – Optional)
The appointment of a Kansas registered agent is required to create a Kansas LLC. Although you or any LLC partner can serve as your own resident agent, many LLCs opt to use a specialized registered agent company.
The Kansas LLC cost of a registered agent service varies per business but expect to pay anything between $80-$300 per year.
3. Name Reservation Fee ($35/Mail-$30/Online - Optional)
Suppose you wish to secure a business name for 120 days with the Kansas Secretary of State without immediately forming your limited liability company.
In that case, you can complete a Temporary Reservation of Business Entity Name form and incur a $35 filing fee or $30 for online filing.
Before filing a name reservation form, I remind clients to check the Kansas LLC business search to determine if their preferred name is available and ensure that it follows state regulations.
Expenses Following the Approval of Your LLC
Let's take a closer look at other costs related to starting an LLC in Kansas.
1. Professional Business License (Depending on the Line of Business - Mandatory)
In Kansas, you can obtain a professional license from the organization overseeing your sector [1]. According to the Kansas Department of Revenue, this system encompasses over 100 different professions and businesses, ensuring that approximately 95% of industry-specific operations meet state standards for professional licensing and compliance.
To illustrate, a client of mine wanted to operate an accounting firm. I advised them to contact the Kansas Board of Accountancy to obtain the proper professional license before doing business in Kansas.
The requirements and costs vary by field and granting body.
2. Annual Report Fee ($50/Online-$55/Mail - Mandatory)
Businesses must submit an annual report to the Secretary of State once a year in Kansas. A $50 filing fee is due when you submit your annual report online, and $55 for mail filings [2].
3. Taxes (Depending On Income Bracket - Mandatory)
Kansas has different business taxes for LLCs, including:
- State Income Tax: Kansas's state income tax rate ranges from 3.7% to 5.7%. After submitting articles of formation and an operating agreement, the amount you are due to the Secretary of State will be determined by the business income you generate.
- Sales Tax: Based on Kansas law, the sales tax rate is 6.5%, according to the Kansas Department of Revenue.
- Withholding Tax: A Kansas LLC manager must deduct 7.65% from employment income to cover federal taxes. This sum will be required when you file the company's federal taxes.
- Self-Employment Tax: As a self-employed business owner, you will be liable for paying a federal self-employment tax of 15.3%. The federal state determines this, which may be predicated on the LLC's tax closing month or tax closure date when you finish registering your business.
4. Operating Agreement ($100 - $200 - Optional, but Recommended)
An operating agreement is a binding legal agreement between members that establishes the guidelines and policies your company will adhere to, including voting procedures, profit and loss sharing, and partnership interest.
Since it’s an internal document, you can draft one on your own for $0 or hire a professional LLC service for a fee ranging between $100-$200.
For clients with budget to spare, I advise them to employ an attorney to draft the operating agreement to ensure it's legally binding.
5. Certified Document Copies ($15 + $1 per additional page - Optional but Recommended)
The Secretary of State will charge $15 for certification, plus $1 per page for certified copies of legal papers.
Orders may be placed in person, via mail, or by fax. For certified copies to be faxed back to you, an extra $1 per page is required.
6. Certificate of Existence ($15/Mail-$10/Online - Optional but Recommended)
In Kansas, a certificate of existence costs $15 ($10 if ordered online). A certificate of good standing certifies that your LLC has submitted all necessary state paperwork and that all the state fees and taxes are current.
When clients ask the importance of obtaining one, I tell them that the document is necessary for pursuing potential investors and request business financing.
7. Employer Identification Number ($0 - Optional, but Recommended)
You can obtain an EIN for free from the IRS website, or you can have an LLC service provider get one for you for anything between $50-$100.
As a Kansas business owner, you must have an EIN when you file your state and federal taxes, register a Kansas business bank account, and make employee monthly payments.
"An LLC with multiple members is required to secure an IRS Employer Identification Number (EIN), regardless of whether it employs anyone."
- Jon Morgan, CEO, Co-Founder & Editor-in-Chief of Venture Smarter
FAQs
Is There A Penalty For Paying My Taxes Late In Kansas?
There is a penalty for paying your taxes late in Kansas. You're subjected to a fine of 1% to 24% of the amount due for each month.
Can You Pay Kansas State Taxes with a Credit Card?
You can pay Kansas state taxes with a credit card. Other payment options include checks, money order, and debit card.
How Much Does It Cost to Reinstate an LLC in Kansas?
It costs $35 to reinstate an LLC in Kansas. LLC members are also required to pay the penalties for each late filing.
References:
- https://ksbiz.kansas.gov/plan/research-licenses-permits/
- https://www.kansas.gov/annual-reports/index.d
