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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.
An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.
Starting an LLC in Kansas shouldn’t prove difficult as the process of creating an LLC in the state doesn’t deviate from the standard procedure that is used in most U.S. states. To avoid a misstep in the filing process, follow these steps to start an LLC in Kansas, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Kansas step-by-step
1. Select a name for your Kansas LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the state of Kansas:
- An LLC’s name must be distinguishable from the names of existing business entities on file with the Kansas Secretary of State.
- An LLC’s name must contain one of the following phrases or abbreviations at the end: “Limited Liability Company”, “Limited Company”, “L.C.”, “LC”, “LLC”, or “L.L.C.”
Reserve your LLC name with the Secretary of State
After selecting a name for your LLC, you should reserve it with the Kansas Secretary of State to avoid another business entity putting it to use before you are ready to file your LLC’s Articles of Organization.
First, use the Kansas Business Filing Center’s Name Availability Status search to make sure that your chosen name is available. Then, reserve your LLC name online at the Secretary of State website or mail in a completed Temporary Reservation of Business Entity Name application.
A name may be reserved for 120 days and the reservation filing fee is $30 for online filing and $35 for mail filing.
2. Designate a registered agent
As in every U.S. state, forming an LLC in Kansas requires the appointment of a registered agent service to handle state and federal legal documents as well as service of process on the business’s behalf.
The registered agent must either be a state resident or business entity with a street address in Kansas OR if the individual or business is based out-of-state, they must have a business office in Kansas.
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Our picks of the best LLC services
Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owner will find useful too.
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3. File Articles of Organization
An LLC is formed in Kansas through the filing of Kansas Limited Liability Articles of Organization with the Kansas Secretary of State. The articles may be filed online (signing up for a KanAccess account is required) or via postal mail. The filing fee is $160 ($165 for mail filing) and payment can be made by credit card, check, or money order.
Your Kansas LLC’s Articles of Organization must include the following details:
- LLC name and mailing address
- Registered agent name and address
- Closing month of the LLC’s tax year
- LLC authorized organizer signature
Foreign LLCs doing business in Kansas
LLCs formed outside of Kansas that intend on doing business in the state must register with the Kansas Secretary of State.
Follow these steps to do business in Kansas as a foreign LLC:
- Comply with Kansas LLC naming rules and make sure that the business name is available for use in the state by using the Kansas Business Filing Center’s Name Availability Status search.
- Appoint a Kansas registered agent to handle service of process in the state.
- File an Application for Registration of Foreign Covered Entity with the Kansa Secretary of State. The application can ]be filed through the mail or by fax. The filing fee is $165 ($185 for fax filing).
- Along with the application, you must include a Certificate of Good Standing or Certificate of Existence from the LLC’s home state. The certificate must be dated from 90 days or less of its filing with the Kansas Secretary of State.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Kansas, drafting a comprehensive LLC operating agreement is strongly recommended for all newly-formed limited liability companies.
The operating agreement should do the following:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- Detail how the LLC will be run
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).
The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Fulfill your Kansas LLC’s additional legal obligations
Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
File Annual Reports
All LLCs active in Kansas–including those formed in the state and foreign LLCs doing business in the state–are required to file an Annual Report with the Secretary of State each year. The report is due by the 15th day of the 4th month after the end of an LLC’s tax year (as an LLC’s tax year typically ends in December, the due date for annual reports is usually April 15th).
Annual reports may be filed online or by postal mail. The online filing fee is $50 and the mail filing fee is $55.
Obtain business licenses and permits
Certain Kansas LLCs may be required to obtain one or more state or locally-issued business licenses, permits, or certifications depending on the nature of their business and location.
You can find detailed information on Kansas state business licensing requirements by visiting the Kansas Business Center website. For information on local licensing regulations, consult with a city clerk in the city or county where your LLC is based.
Register with the Kansas Department of Revenue
Certain Kansas LLCs, including those that collect sales tax and those with employees, must register with the Kansas Department of Revenue.
Kansas LLC checklist
A Kansas LLC’s name must obey the following rules:
- Must be distinguishable from the names of existing business entities on file with the Kansas Secretary of State.
- Must contain one of the following phrases or abbreviations at the end: “Limited Liability Company”, “Limited Company”, “L.C.”, “LC”, “LLC”, or “L.L.C.”
Formational documents and filing fees:
- Temporary Reservation of Business Entity Name – $30 ($35 for mail filing)
- Kansas Limited Liability Articles of Organization – $160 ($165 for mail filing)
- An LLC is organized in Kansas through the filing of Kansas Limited Liability Articles of Organization with the Kansas Secretary of State.
Additional legal obligations:
- Filing Annual Reports – Required for all LLCs doing business in Kansas
- State and/or local business licenses, permits, and certifications – Required for certain types of LLCs
- Kansas DOR registration – Required for certain types of LLCs