Before we get started on this guide on how to start an LLC in Kentucky, you need to know about the easy way of making this happen. There are services that will help you form an LLC in Kentucky. I always recommend going to ZenBusiness because they have been helping business owners form a Kentucky LLC with ease.
I will take you through all the steps on how to do this on your own but it’s important that you know it’s possible.
I also like to talk about potential business ideas for you based on what Kentucky is known for.
Kentucky is best known for a few things:
- Horse Racing
The Kentucky Derby is a fun time where lots of people come in to check out the amazing horse race adventure that’s been going on for years. I would combo #1 and #2 so you’d have a new bourbon business called Bourbon Racing LLC which will have the undertone of knowing it’s about horse racing while still being a brand.
I did a quick search and it looks like someone had my idea 10+ years ago so you’d need to talk to the Kentucky Secretary of State’s office if you wanted to try and revive this business.
Alright – let’s get into why you’re here and talk about how to start an LLC in Kentucky.
Name Your Kentucky LLC
The first step is to pick a name for your new LLC. There are Kentucky LLC naming guidelines you’re going to need to follow.
Here are a few of the rules you’ll need to review whether it’s a single member LLC you’re going through the typical Kentucky LLC formation process:
- Your LLC’s name must include the phrase “Limited Liability Company” or the abbreviation “LLC.”
- Your LLC’s name must be distinctive from the names of other business entities already on file with the Kentucky Secretary of State.
- You may reserve a name for your LLC by filing an Application for Reservation of Name with the Kentucky Secretary of State. The reservation is effective for 120 days and may be renewed for additional 120-day periods.
To see if your desired LLC name is available, you can perform a Kentucky business entity search on the Secretary of State website.
You can do the search here:
Once you’ve been able to search for your Limited Liability Company and whether the name is available with the Kentucky Secretary of State’s office – you’re going to need your digital version of that too.
I recommend you use GoDaddy to determine if you can get the .com for your business name. It’s going to be important for you and the LLC owners that you have the right business name locked in with the state and online.
Once you’ve been able to get the right name, you’re going to need to get the help of a registered agent service.
Choose your registered agent
A registered agent is someone who receives official legal and tax correspondence and has access to your business records. The agent must have a physical street address in Kentucky and be available during normal business hours.
The LLC’s registered agent may be an individual resident of Kentucky, or a corporation authorized to do business in Kentucky that has a physical office in the state. The LLC’s registered agent must sign a written consent to serve as agent, which must be filed with the Articles of Organization.
You may not serve as your own registered agent if you are not a resident of Kentucky.
You can also use a potential Kentucky law firm who offers a registered agent service for you to consider. There are law firms that do this and will make it easier for you to keep your Kentucky Limited Liability Company in the right status with the state.
You’re going to need to focus on the business growth and not whether you have registered agent services setup the right way.
If your business structure is setup like all the other business owners that have setup a Kentucky LLC and you feel comfortable with the Kentucky registered agent process then you’ll be comfortable with your business.
I recommend using a service like Northwest Registered Agent because they are one of the most popular registered agents for new business entities.
Prepare and File Articles of Organization
The next step is to file your Articles of Organization with the Kentucky Secretary of State.
- The Articles of Organization must include:
- The LLC’s name and principal place of business
- The LLC’s purpose
- The name and address of the LLC’s registered agent
- The LLC’s duration, if not perpetual
- Whether the LLC will be managed by members or managers
- The name and address of each organizer
You can find the Articles of Organization on the Kentucky Secretary of State website.
The Articles of Organization must be signed by an organizer and delivered to the Kentucky Secretary of State for filing. The Articles of Organization must be accompanied by the filing fee, which is $40 if paid by check or money order, or $45 if paid by credit card.
You will need to include a Certificate of Good Standing from the state of formation if the LLC is less than one year old. The Certificate of Good Standing must be no more than 60 days old.
After the Articles of Organization are filed, you will need to publish a notice in a local newspaper for six consecutive weeks.
You will need to prepare an Affidavit of Publication, which must be filed with the Kentucky Secretary of State within 120 days of the date of first publication. The Affidavit of Publication must be accompanied by the filing fee, which is $45 if paid by check or money order, or $50 if paid by credit card.
Create an operating agreement
All LLCs organized in Kentucky must have an operating agreement.
The LLC operating agreement is an internal document outlining the ownership and operating procedures of your LLC.
Although an operating agreement is not required to be filed with the state, it is highly recommended that you have one.
Operating agreements should contain the following information:
- The names and addresses of the LLC’s members
- How new members will be admitted to the LLC
- The LLC’s purpose
- Whether the LLC will be member-managed or manager-managed
- The powers and duties of the LLC’s managers, if any
- The LLC’s fiscal year
- Rules for taking, amending, and repealing LLC resolutions
- Provisions for holding member and manager meetings
- The process for amending the operating agreement
Operating agreements can be oral or written, but it is highly recommended that you have a written agreement. If you’re going to be putting personal assets into the business, you’re going to really want to use an operating agreement to make sure you’re tracking it correctly.
If you do not have an operating agreement, the state of Kentucky will provide one for you. However, this agreement may not be suitable for your LLC’s needs, and it is always best to have an agreement that is tailored to your specific business.
The operating agreement should be signed by all the LLC members and kept in the LLC’s records. If you’re Kentucky LLC operating agreement isn’t in a secure place – you should think about putting it with the rest of your legal documents.
If you’re going to conduct business, hire employees and are going to collect sales tax – you’re a real business that will need to keep track of the details of your business.
Get an EIN
The next step is to obtain an Employer Identification Number (EIN) from the IRS. The employer identification number is one of the most important pieces you need from the Internal Revenue Service.
You’ll be using this number for federal taxes, Kentucky sales tax, Limited Liability entity tax and it will help you with the tax structure.
This is the number you’ll need to give to your business accountant who can give you the business advice needed to use it correctly.
You will need an EIN if you plan to hire employees or if you are going to open a business bank account.
You can apply for an EIN online, by fax, or by mail.
If you apply online, you will receive your EIN immediately.
If you apply by fax or mail, it will take four to five weeks to receive your EIN.
There is no fee to apply for an EIN.
You can find the application for an EIN on the IRS website.
Open A Business Bank Account
The next step is to open a business bank account. This will help you keep your personal and business finances separate.
It is important to have a business bank account because it will make your life much easier come tax time.
You will need the following items to open a bank account:
Your business’s employer identification number
Your business’s formation documents
The names of your business’s owners
To open a business bank account, you will need to visit a local bank or credit union and bring the required items with you. I recommend that you use novo.co as the partner you use to open business bank accounts. If you’re going to need business credit for your individual or business entity – you’re going to want to use their service.
Get Small Business Insurance
The next step is to obtain small business insurance. This will protect your business from liability in the event that someone is injured on your property or if you are sued.
There are many different types of insurance available, so it is important to speak with an insurance agent to determine what type of coverage you need.
The types of insurance you should consider are:
Property insurance – This will protect your business property in the event of a fire, theft, or other damage.
Personal Liability insurance – This will protect your business from lawsuits if someone is injured on your property or if you are sued.
Workers’ compensation insurance – This will protect your employees if they are injured on the job.
Business interruption insurance – This will protect your business if it is forced to close due to a natural disaster or other event.
Business automobile insurance – This will protect your business if you are in an accident while using your vehicle for business purposes.
I recommend you go to commercialinsurance.net and get a quote for your new Kentucky LLC business and work with your LLC members to make sure it’s the right type of coverage. As a business owner, this is a critical step you’ll need as you’re getting your business setup and hopefully a business credit card too!
File an Annual Report
All LLCs in Kentucky are required to file an annual report with the Kentucky Secretary of State. The report is due by June 30th and there is a $15 filing fee.
The annual report must include the following information:
The name and address of the LLC
The names and addresses of the LLC’s members and managers
The LLC’s federal employer identification number
The LLC’s registered agent and registered office
The signature of a member or manager
You can file the annual report online, by mail, or in person.
If you have any questions about how to start an LLC in Kentucky, you can contact the Kentucky Secretary of State’s office at (502) 573-4457.
You can find more information about how to start an LLC in Kentucky here:
You’ve been able to get some business advice delivered straight here and with your Kentucky LLC articles in motion – you’re headed in the right step.
If you follow the advice for your Kentucky LLC here and make sure you’ve setup your business correctly – you’ll be in great shape!
Start an LLC Today
ZenBusiness is the easiest way to setup your business today.