LLC Cost in Kentucky 2023: Review & Free Guides
Starting a Kentucky LLC can be a great way to protect your personal assets as a business owner. LLC owners also get some benefits with taxation as it relates to their Kentucky business.
But before you go through with the Kentucky LLC formation process, you need to know how much it’s going to cost to register this business entity with the Kentucky Secretary of State. That’s why we’ve put together this guide.
Below, you’ll learn every filing fee Kentucky LLCs have to pay and learn more about how limited liability entity tax works and whether hiring a registered agent service or LLC formation service could be the right move for your business.
So, with that in mind, let’s get started.
What Is an LLC in Kentucky?
Kentucky LLCs are a type of business entity. LLC is short for limited liability company, which is a different way to hold your company than a corporation or sole proprietorship.
In order to start an LLC in Kentucky, you need to file several types of paperwork with the Kentucky Secretary of State. You’ll have to pay a filing fee for each document, and will then need to pay an annual report fee to the Kentucky Secretary of State every year after that.
However, the Kentucky LLC cost is much lower than it is elsewhere. This is good news for your business bank account and may leave you enough left over to hire a registered agent service to make forming your Kentucky LLC easier. But more on that in the next section.
LLC Cost in Kentucky
In this section, we’ll cover all of the Kentucky LLC cost factors to keep in mind when deciding whether to turn your Kentucky business into a Kentucky limited liability company.
Kentucky LLC Filing Fee
The main Kentucky LLC filing fee is $40. That’s the filing fee you’ll pay regardless of whether you make your business filings online or with paper copies.
This covers operating agreements and some other key Kentucky business documents that you need to fill out with the Kentucky State Treasurer to form an LLC.
Kentucky LLC Annual Report Fee
As an LLC small business, you also will be responsible for filing annual reports every year. Each annual report costs $15, which is much lower than the cost of annual reports and business filings in other states.
Registered Agent Fee
Every business in Kentucky must have a registered agent. Your LLC’s registered agent can either be you or a registered agent service.
If you act as your own registered agent, you won’t have to pay a thing. But if you hire Kentucky registered agent services, you could pay between $100 and $300 annually, and save a good amount of time.
Cost to Form a Foreign LLC in Kentucky
The cost of starting a foreign LLC in Kentucky is $90. The state charges more for a foreign LLC than it does for a domestic Kentucky LLC.
Business Permits & Licenses
Kentucky has no statewide requirements for business licenses or permits. You may be able to conduct business through your business structure and receive business income without any.
However, some states have special licensing requirements. This varies for different business entities, so be sure to look up the information for your LLC online before paying state filing fees or trying to legally operate in compliance with the Kentucky Department of State.
After the LLC formation process is complete; you will be responsible for paying various federal taxes and state taxes. Make sure you have good legal or tax advice and business insurance to avoid paying extra.
With that in mind, here are the key federal taxes and state taxes to be aware of when thinking about domestic LLC costs, gross receipts, and business debts with the Kentucky Secretary of State.
State Income Tax
The Kentucky Secretary of State charges a flat 5% state income tax. This is the amount you’ll pay on your personal tax returns, no matter how much income you had during the year you pay taxes.
State Sales Tax
Kentucky charges a 6% sales tax rate. These service fees should be kept in a separate bank account after you form an LLC for liability protection and to avoid mistakes that could increase your LLC costs or require the use of a professional service in the business world.
Federal Self-Employment tax
The federal self-employment tax rate is 15.3%. This is the figure that you will be responsible for paying as your own boss after you’ve filled out an operating agreement, and articles of organization, and have completed the LLC formation process.
Payroll Tax Withholding
The state of Kentucky asks that you withhold 4.5% of your employees’ paychecks after filing an operating agreement and articles of organization to become a valid LLC.
Other LLC Filing Costs
You may face other costs while filing your LLC paperwork too. Here are a few to be mindful of as you go through the LLC formation service process.
LLC Name Reservation Fee
If you want to reserve a business name before you form an LLC, then it will cost you $15 to do so, which you can pay via electronic funds transfer.
“Doing Business As” (DBA) Name
You can also register a DBA name with the secretary of state. This costs $20 to do after you file your articles of organization and operating agreement.
Business Domain Name & Website
The cost of registering a domain name and registering a business website varies on the domain you choose and how many small businesses want it, as well as the website creation tool you choose.
Certified Document Copies
If you need certified document copies for things like franchise tax, business insurance policies, and unemployment insurance tax, then it will cost $10 for up to 5 pages, then $0.50 per additional page after that.
Certificate of Good Standing (Certificate of Compliance)
Kentucky charges $10 to provide businesses with a certificate of good standing, which states that you have your own operating agreement and are in good standing with the state after you form an LLC.
Articles of Organization Fee
When you file articles of organization in the state of Kentucky, you will be charged $40. That’s true regardless of whether you file the articles of the organization online or in person.
You may or may not have any attorney fees while creating your LLC or preparing your annual report. These can vary significantly based on the situation you’re experiencing.
Tax ID Number (EIN)
It doesn’t cost anything to register an employer identification number for your business name in Kentucky. You can complete the process online at no cost.
6 Basic Steps to Start an LLC in Kentucky 2023
If you’ve reviewed the costs associated with starting a Kentucky LLC and still wish to do so, here are some instructions you can follow to begin the process.
Choose a Name for Your LLC in Kentucky
The first thing you need is a business name to attach to your physical address and all of your paperwork. You have to select a name for your LLC that no other company in Kentucky is already using.
Choose a Registered Agent in Kentucky
Now you’re ready to choose a registered agent. You can hire registered agent services to do the job for you if you’re willing to pay a registered agent fee. Or you can be your own registered agent to save money.
File Organizational Paperwork With the State
The next step is to file your organizational paperwork with the state. This is when you’ll pay your fees and fill out things like your operating agreement. It’s the main step involved with becoming an LLC in Kentucky.
Obtain a Certificate from the State
Once you’ve filed your paperwork, all that should be left to do is to wait until the state gets back to you with a certificate that says you have a valid business entity. But if the state needs more information from you, then they’ll request it.
Prepare an LLC Operating Agreement
At this point, you’re ready to prepare your operating agreement. This is what tells the state how your company is going to be structured and how you’re going to run the business.
Obtain an EIN for Your LLC in Kentucky
Now all that’s left to do is obtain your EIN. You can do this online for no fees whatsoever. You just need to input your company information and then the government will automatically create an EIN for your business in as little as 10 minutes.
The Top 2 LLC Services in Kentucky
|Northwest Registered Agent||ZenBusiness|
|Award||Best Overall||Best Customer Service|
|Pricing||Free – $275 annually + filing fees||Free – $299 annually + filing fees|
|Detail||Read Review||Read Review|
Northwest Registered Agent
Northwest is a great business services provider that can help you with everything from LLC paperwork to acting as your registered agent and providing ongoing taxation support. The company gets great reviews from customers and can be an ongoing partner for you as you work to create the best Kentucky LLC possible.
ZenBusiness is another excellent option for starting an LLC in Kentucky. They’ll help you with the paperwork for free if you hire them to become your registered agent. Plus, ZenBusiness offers ongoing assistance with things like accounting, tax, and business advice.
One thing that sets this company apart is that ZenBusiness provides after-hours customer support. That could be impactful if you like to do business outside of standard hours.
Read more: Best LLC Services 2023
Starting an LLC in Kentucky is a smart move for many businesses that want personal asset protection and taxation benefits. But there are some costs associated with doing so, and it’s important to be aware of these before beginning the process.
We hope this guide has given you the information you need to make a more informed decision. Whether you decide to create the LLC yourself or hire a service to help you do it, you should have the guidance you need to get started.
We wish you the best of luck with whatever decision you make.
Frequently Asked Questions (FAQs)
An LLC is a type of business entity that offers some benefits related to taxation, profit-sharing flexibility, and asset protection.
Yes, you can complete all of the paperwork on your own without needing to hire a service if you’d like to try and save money.
It costs a baseline amount of $40 to start your LLC, but you may encounter other fees that could increase this price – especially if you hire a service to do the job for you.
Yes, every LLC in the state of Kentucky needs a registered agent. You can either fill that role yourself or hire a company to do it for you.
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Entity name. legislature.ky.gov. Accessed January 31, 2023. https://apps.legislature.ky.gov/law/statutes/statute.aspx?id=45775
Kentucky Secretary of State – Online Business Filings. web.sos.ky.gov. Accessed January 31, 2023. https://web.sos.ky.gov/ftsearch/?path=nameavail
Fees – Secretary of State. www.sos.ky.gov. Accessed January 31, 2023. https://www.sos.ky.gov/bus/business-filings/Pages/Fees.aspx
Corporation Income and Limited Liability Entity Tax – Department of Revenue. revenue.ky.gov. Accessed January 31, 2023. https://revenue.ky.gov/Business/Corporation-Income-and-Limited-Liability-Entity-Tax/Pages/default.aspx
Employer ID Numbers | Internal Revenue Service. Irs.gov. Published 2012. Accessed January 31, 2023. https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
Home – Secretary of State. www.sos.ky.gov. Accessed January 31, 2023. https://www.sos.ky.gov