Starting a Kentucky limited liability company may be a great way to safeguard your assets and take advantage of favorable tax circumstances.
But if you're considering forming an LLC in Kentucky, you should know the fees levied by the Kentucky Secretary of State.
With the help of our licensed business specialists, we've developed this post that reviews the most common and relevant filing costs of forming an LLC in Kentucky.
Quick Summary
- It costs $40 to file the Articles of Organization for an LLC in Kentucky.
- LLCs in Kentucky must pay a Limited Liability Entity Tax of at least $175 annually.
- All Kentucky LLCs must submit an annual report for a $15 filing fee by 30th June.
How Much Does an LLC Cost in Kentucky?
An LLC costs $40 in Kentucky. This is the filing fee for submitting your Articles of Organization to the Kentucky Secretary of State.
Additionally, you may encounter other LLC filing costs that will increase the total amount, such as filing annual reports, name reservations, and registered agent service fees [1].
Kentucky LLC Filing Fee
The filing fee for a Kentucky limited liability company is $40 to file the Articles of Organization - the legal paperwork required to incorporate an LLC in Kentucky.
The Secretary of State will need the details you provide in this formation file to identify your company and see if it complies with legal requirements.
The standard processing time for this is 2-3 weeks, but you can pay an additional $50 and reduce the turnaround time to between 4 and 6 business days.
Also, there's a rush filing option with 1 to 2 days lead time, but it costs $100 more.
Kentucky Registered Agent Service Fee
As per Kentucky law, all LLCs must appoint a registered agent to do business legally in the state.
Registered agents are in charge of accepting service of process and other crucial legal matters on behalf of your LLC.
To receive critical notices for your LLC, a registered agent must be regularly accessible during regular working hours and have a street address in Kentucky.
If you want to save money, you can act as your own registered agent for $0, but you must be available throughout office hours and handle all compliance independently.
Alternatively, you can delegate these duties to a professional Kentucky registered agent service and pay a filing fee between $70-$300 per year.
Kentucky Limited Liability Entity Tax
While Kentucky LLCs are not liable to Corporate Income Tax, they must pay a Limited Liability Entity Tax (LLET) annually [2].
The minimum LLET is $175 for a standard-income LLC. However, note that if your LLC generates more than $3 million in net income, you'll have to pay a higher rate.
Other LLC Filing Costs
Here are the additional Kentucky LLC fees you may anticipate during the formation process.
1. Business Name Reservation
A name reservation certificate is a prerequisite for the Kentucky LLC formation process. Thus, when you start your Kentucky business, you'll first need to register your name with the Secretary of State of Kentucky.
This guarantees that your chosen business name will be available and unclaimed when you file your Articles of Organization to register your LLC.
A name reservation holds your business name for a maximum of 12 months and costs a $15 filing fee.
If you're making the payment via checks, you need to mail the checks to the Kentucky State Treasurer's office.
However, before reserving your business name, you first need to make a Kentucky LLC name search to see if your desired name is available.
2. Assumed Name/DBA Registration
You should submit an assumed name registration if your LLC goes by a name other than the one on file. In Kentucky, your DBA name must differ from other company names on the record.
If you plan to register different DBAs for your Kentucky LLC, you must submit a Certificate of Assumed Name for each DBA name you employ.
When filing for a DBA name in Kentucky, you must pay a filing fee of $20, and after approval, you'll be issued an assumed name certificate that is valid for five years, after which you can renew it.
3. Annual Reports
To keep the details about your company and LLC members current in Kentucky, you must file the annual report for a $15 filing fee with the Commonwealth of Kentucky.
Timely submissions of your annual report also help your Kentucky LLC to stay in good standing and adhere to all regulations to continue operating.
Online filings are handled immediately, while mailed applications take 1-5 business days based on existing report filing volume.
The failure to submit a Kentucky annual report is not subject to late costs. However, if no report is received by 30th June, your business will be legally disbanded or canceled.
4. Kentucky Certificate of Existence
Whether applying for loans, entering long-term contracts, or seeking venture capital, you may be required to present a Certificate of Existence for your LLC.Â
This document verifies that your LLC is lawfully constituted and in operation. It also indicates that your Kentucky LLC has submitted its financial reports and has paid all necessary fees, levies, and fines.
A Kentucky Certificate of Existence costs $10.
5. Kentucky Certified Document Copies
A certified copy is a replica file of the original document. Each certified copy in Kentucky costs $5 plus an extra $0.50 for each page for a document with more than 5 pages.
The Secretary of State can provide these certified copies, essential for setting up your Kentucky LLC in various jurisdictions and applying for investment capital.
Certified copies are also an excellent tool for LLC owners to prove the legitimacy of their businesses.
6. LLC Operating Agreement
A Kentucky LLC operating agreement is a statutory form that defines your LLC's managerial ownership, member duties, and business filings.
Although an operating agreement is not necessary for Kentucky to incorporate an LLC, owning one is wise.
You can begin working on your operating agreement anytime during the LLC formation process, especially after drafting your Articles of Organization.
Your operating agreements will be held in the personal business archives of your LLC; you will not submit them to the Kentucky Secretary of State.
You can create a bespoke operating agreement for your LLC for free ($0) using online free operating agreement tools.
Alternatively, you can hire an attorney or a professional LLC service to draft the operating agreement at a filing fee between $100-$300, depending on the company.
7. Kentucky LLC Taxes
After completing the Kentucky LLC incorporation procedure, you will be liable for paying different Kentucky business taxes (at federal and state levels).
- Kentucky state income tax: A flat 5% state income tax is levied by the Kentucky Secretary of State. Regardless of how much money you make during the tax year, this is the amount you'll have to pay on your tax returns.
- Sales tax: Sales tax in Kentucky is levied at a rate of 6%. Following the formation of your LLC, you should keep these service fees in a separate bank account for liability protection and to prevent errors that might raise the cost of your LLC or necessitate the employment of a business-related professional service.
- Self-employment tax: 15.3% is the federal self-employment tax rate for Kentucky. After completing the LLC creation procedure and filling out the registration documents, this is the amount you will be liable for paying as your own employer.
- Withholding tax on salaries: After submitting your incorporation paperwork, the state of Kentucky requires you to deduct 4.5% of your employees' paychecks to establish your company as a legal LLC.
8. Employer Identification Number Registration
To identify each company entity in Kentucky, an EIN is given by the IRS. This nine-digit number is required to register a business bank account, recruit staff, or submit tax returns to the Internal Revenue Service.
You may apply for an EIN on the IRS website for less money. If you have all of your information prepared, this service is free and doesn't take more than ten minutes.
But you can pay a professional to handle this task on your behalf. Depending on the firm you pick, the service fee for EIN acquisition ranges from $50 to $100.
Kentucky Foreign LLC Registration
If your LLC was initially created in another state and you wish to conduct business in Kentucky, you must be authorized by registering as a foreign LLC.
You must submit an Application for a Certificate of Authority to the Secretary of State to lawfully manage a foreign LLC in the Commonwealth of Kentucky.
Before the Secretary of State gives you this document, you must pay the $90 filing fee.
After the approval of your foreign LLC, you must apply for the necessary business licenses and permits based on the sector of your business.
FAQs
How Long Does It Take To Form an LLC in Kentucky?
It takes 2 to 3 weeks to form an LLC in Kentucky. This is the standard processing time, but you can pay extra $50 or $100 filing fees to reduce the turnaround times to 5 and 1 business day, respectively.
Do I Need A Registered Agent Service For My Kentucky LLC?
Yes, you need a registered agent service for your Kentucky LLC. According to Kentucky law, the registered agent will be the primary communication point with the SOS. You can be your own registered agent or hire a professional service.
Do You Need Professional Help with Your Kentucky LLC?
You must submit several forms to the Kentucky Secretary of State to form an LLC there. Each document must be filed with a processing fee, and you must shell out a yearly report payment to the Kentucky Secretary of State each succeeding year after that.
If you want to streamline this process and stay compliant, hiring the best Kentucky LLC formation services is a step in the right direction.
These are solid choices for forming an LLC in Kentucky. In addition to assisting you with registration paperwork, they also provide continuing aid with bookkeeping, tax, and corporate guidance.
References:
- https://www.sos.ky.gov/bus/business-filings/Pages/Fees.aspx
- https://revenue.ky.gov/Business/Corporation-Income-and-Limited-Liability-Entity-Tax/Pages/default.aspx
