Launching a business in Kentucky requires entrepreneurs to follow some specific processes. Just as in the other states, Kentucky requires small businesses to file paperwork for their company in order to formally establish the business. Whether you’re forming a limited liability company (LLC), partnership, or corporation, this necessary step provides some real advantages to protect your interests.
Most small start-ups will probably lean toward creating an LLC. This legal structure gives you limited personal liability against debts and claims against your business and is one step beyond a sole proprietorship. You’ll still have to pay taxes on any business income you earn, but you’ll file them on your personal taxes.
As in other states, you’ll need to list a registered agent to accept legal papers on behalf of your Kentucky business entity. Not sure where to start in terms of finding and choosing a registered agent in the Bluegrass State? We’ve got some answers to entrepreneurs’ most frequently asked questions on the topic.
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How is an LLC formed in Kentucky?
To start an LLC in Kentucky, there are a few things you need to do. Follow these steps to set up an LLC:
1. Name the company
So, you’ve got a great idea for a business. Now what? First, you’ll need to name it. Kentucky has some rules you must abide by when choosing a name. These include:
- According to Kentucky law, your LLC name must contain the phrase “Limited Liability Company” or “Limited Company.” You may also use “LLC” or “LC.” Prefer to abbreviate “limited company”? You are required to use the abbreviation “LTD CO” in Kentucky.
- It’s your job to ensure that the name you choose is distinguishable from those already registered with the Kentucky Secretary of State. You can check for availability in the State’s Business Name Database. Assuming the name you want is free to use, simply file a Reservation or Renewal of Reserved Name (which is titled Form RES) and pay the $15 filing fee. The reservation is good for 120 days. Although you can file online, there’s also a mail-in option.
- Worried your business name is too long or formal for everyday use? You can choose something catchier for real-world use. Frequently referred to as a “Doing Business As” (DBA), your fictitious name just needs to be filed in Kentucky. For a $20 fee, you can simply go online and file a Certificate of Assumed Name (using Form ASN) with the Kentucky Secretary of State. You can also opt to mail in your form and $20 fee. The DBA is good for five years.
2. Pick a registered agent
Designating a registered agent is required of every LLC in Kentucky. The agent’s purpose is to accept the tax and legal paperwork on behalf of your business.
The registered agent can be a person or company located in Kentucky that’s available during regular business hours.
3. File the Articles of Organization with the State of Kentucky
Your next step is to file your Articles of Organization with the Kentucky Secretary of State. Like other forms, you can do this by mail or online through the state. The fee is $40.
Be prepared to supply the name and address of the company, the name and address of the registered agent, the purpose of the company, whether or not it’s a veteran-owned company, and the LLC organizer’s signature.
4. Create a company operating agreement
Like most states, Kentucky does not require you to create an LLC operating agreement, although it’s highly advisable. The purpose of this internal document is to lay out the rights and responsibilities of both members and managers.
Simply Google “LLC operating agreement template” to find some examples online. Then modify the samples to fit your Kentucky business.
It’s recommended that you not skip this step, as your operating agreement also helps demonstrate that your LLC is actually a separate business entity. If you don’t create an operating agreement for your company, Kentucky law will govern how your limited liability company operates.
5. Obtain an EIN
If you plan to have employees or if you plan to have your LLC taxed as a corporation rather than a sole proprietorship, you’ll need to get an Employer Identification Number (EIN) from the IRS. It’s a free process and you can apply online here.
The IRS makes it easy to get your EIN, thanks to its interview-style applications in which you simply supply answers. There are even hyperlinked keywords and definitions, as well as embedded help topics so you don’t need separate instructions.
6. File an annual report
Although some states only require you to file a report every two years, Kentucky requires an annual report. The deadline is June 30 and your first annual report must include the names and addresses of your limited liability company’s managers and members, as well as any principals and registered agent. Subsequent reports must be filed the following years between January 1 and June 30. In Kentucky, the fee is $15. You can file online or via mail.
What is a Kentucky registered agent?
Just as you’ll find in other states, you’ll need to appoint a registered agent when you create your LLC. This person or entity must have a physical street address in Kentucky (vs. a post office box). Their role is to accept tax and/or other legal paperwork on behalf of your limited liability company.
Do I really need a registered agent in Kentucky?
Yes, you are required to select and list a registered agent to start an LLC in Kentucky.
Can I be my own registered agent in Kentucky?
In Kentucky, you are allowed to list yourself as the registered agent for your Kentucky LLC. Entrepreneurs frequently serve as their own registered agent, but there are some requirements you need to be aware of.
Who can be a registered agent in Kentucky?
Debating whether to represent yourself as a registered agent or pay a company to be your registered agent? In Kentucky, the criteria are similar to that in most other states:
- You must be at least 18.
- A Kentucky street address is required. You cannot use a post office box.
- Because legal paperwork is delivered in person, you must be available to accept legal paperwork at your home, office, or business.
Why would a company choose to work with a registered agent service?
As a start-up, money might be tight, tempting you to serve as your own registered agent. Before you make that decision, ensure that you understand the advantages of paying a registered agent instead.
- Experience. A registered agent service has a lot of experience in the business world. Aside from accepting paperwork on your behalf, they’re also proficient in compliance matters, which could be valuable down the road.
- Privacy. The documents being delivered to a registered agent should be private, but sometimes, the delivery can create a spectacle. If your company is being sued, for example, the sight of someone showing up, handing you papers, and saying, “You’ve been served,” is best left to an off-site registered agent service.
- Availability. Entrepreneurs usually can’t be tied to their home, office, or business during regular hours. You will probably need to run errands, attend meetings, or even travel. For this reason, a registered agent service is ideal.
- Time savings. Registered agents will make the time to fill out your forms. Even if you have the knowledge and experience to fill out confusing or lengthy forms, using a professional service can save you time.
List of Kentucky registered agent services
You should have no problem finding a registered agent for your LLC in Kentucky, but here are a few choices to get you started:
- Incfile.com: Incfile.com can help entrepreneurs file their LLC formation paperwork and serve as the company’s registered agent. The online company offers a host of beneficial business services that includes filing reports and other necessary documents with the state. The first year is free. After that, it’s $119 a year.
- Northwest Registered Agent: For $125 a year, Northwest Registered Agent offers an online portal, real-time updates when mail is received, and pricing that remains the same each year. The company offers its services in several states and has years of experience in the field. Additional business services are also offered.
- Swyft Filings: Swyft Filings offers registered agent services that start at $149 a year. Users get an online dashboard, report and filing reminders, and secure document storage for this fee. In addition, the company has a buffet of other business services available when you have a need.
How much does a registered agent service cost in Kentucky?
Most registered agent services in Kentucky charge between $49 and $100.
How does an owner select a registered agent in Kentucky?
The registered agent is selected on the LLC formation paperwork, which in Kentucky is called Articles of Organization. The registered agent’s name and address are listed on this document.
Can a company change its registered agent?
You can easily change your Kentucky registered agent by filling out the Statement of Change of Registered Agent and/or Registered Office Address.
What’s a statutory agent?
You may see the term “statutory agent” used interchangeably with “registered agent.”
What’s a commercial registered agent?
You may be asked if your registered agent is commercial (paid-for services) or non-commercial (e.g., you represent yourself).