Forming an Kentucky LLC
(2025 Guide)
2025 LLC Guide
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forms your LLC with Northwest for $39 (60% off). Details inside.
How to Start an LLC in Kentucky (Step-by-Step Guide)
Discover how to start an LLC in Kentucky, our step-by-step guide. Learn the essential requirements and process to form your business today.
To establish an LLC in Kentucky, submit the Articles of Organization to the Kentucky Secretary of State. The filing fee is $40, and approval is granted within one day.
Here are the 6 steps to complete:
1. Choose an LLC Name
2. Select a Registered Agent
3. File Articles of Organization
4. Create an Operating Agreement
5. Obtain an EIN
6. Register for Limited Liability Entity Tax
If you prefer to form your LLC independently, follow our complimentary guide below. For professional assistance, we suggest hiring Northwest Registered Agent.
Need to save time?
Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).
(See why Northwest is #1: Northwest vs LegalZoom.)
What is the cost to establish an LLC in Kentucky?
Establishing an LLC in Kentucky requires a $40 fee, with an additional $15 annually. What are these charges for? The $40 fee is for filing the Articles of Organization, which officially forms the LLC. The $15 annual fee covers the Annual Report, a necessary filing to maintain your LLC’s good standing. Good news for veterans! In Kentucky, if a military veteran owns 51% or more of an LLC, you can file the Articles of Organization at no cost ($0). Additionally, veteran-owned LLCs can have the $15 Annual Report fee waived for the first four years. This means you must still submit the Annual Report each year, but fees are waived for the first four years. This initiative, known as Boots to Business, is also available to active-duty service members and National Guard members. To qualify, you simply check a box when filing the Kentucky Articles of Organization. For more details on LLC costs, refer to LLC Costs in Kentucky.
How long does it take to form an LLC in Kentucky?
If you choose to file by mail, approval will occur in 1 business day, plus mailing time. Filing online results in immediate approval. For any potential delays, please refer to How long does it take to get an LLC in Kentucky.
Here are the steps to forming an LLC in Kentucky
1. Search Your LLC Name
Begin by ensuring your desired LLC name is available in Kentucky. This is crucial because no two businesses in the state can share the same name. Start by searching your business name and comparing it to current businesses in the state. You can verify the uniqueness of your desired LLC name using the Business Entity Search tool provided by the Kentucky Secretary of State.
Additionally, familiarize yourself with the state’s naming rules to ensure your LLC gets approved. We’ll delve into both aspects in more detail here: Kentucky LLC Name.
Note:
Most people choose “LLC”.
2. Select a Kentucky Registered Agent
The following step involves selecting a Registered Agent. A Kentucky Registered Agent is an individual or company responsible for receiving legal mail and state notices on behalf of your Kentucky Limited Liability Company.
Who is eligible to be an LLC Registered Agent? You have three options for appointing a Registered Agent:
You
A friend or family member
A Registered Agent Service
Kentucky mandates that LLC Registered Agents must maintain a physical street address within the state. PO Boxes are not permissible. The name and address of the Registered Agent will be included in public records.
If you lack an address in Kentucky or desire increased privacy, you can opt for a Registered Agent Service for your LLC.
We suggest Northwest Registered Agent
One of the aspects we appreciate most about Northwest is their willingness to allow you to use their office address for your LLC filing. This ensures your personal address is not listed in public records.
Additionally, they provide a service to scan any mail addressed to your LLC and upload it to your online account. Northwest offers exceptional customer service, and we trust them as our own Registered Agent.
Special offer:
Form your LLC with Northwest for $39 + state fee and get a free year of Registered Agent service.
(Read our Northwest Registered Agent review.)
3. Submit Articles of Organization
To establish an LLC, you must submit the Articles of Organization to the Kentucky Secretary of State.
Filing the Kentucky Articles of Organization online costs $40. This fee is a one-time charge for forming your LLC. If you prefer to handle this process yourself, check out our detailed guide: Kentucky Articles of Organization. Alternatively, you may hire a company to handle it on your behalf.
Need to save time?
Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).
(See why Northwest is #1: Northwest vs LegalZoom.)
4. Draft an LLC Operating Agreement
An LLC Operating Agreement acts as a complementary document to the Certificate of Formation. While the Certificate of Formation establishes your LLC, the Operating Agreement identifies the owners of the LLC.
Moreover, many banks require an Operating Agreement when setting up an LLC bank account. It is also invaluable if legal issues arise, as it demonstrates the proper management of your LLC. For these reasons, we advise all LLCs, including Single-Member LLCs, to have an Operating Agreement.
Additionally, an Operating Agreement is considered an “internal document.” This means you don’t need to file it with the state or the IRS (Internal Revenue Service). Simply keep a copy with your business records. You can download a free template below. Then, watch our Kentucky Operating Agreement video for a step-by-step guide on how to complete it.
Download a free LLC Operating Agreement:
Member-managed: Google Doc | Word | PDF
Manager-managed: Google Doc | Word
(What’s better? See Member-managed vs Manager-managed LLC)
5. Obtain an EIN for Your LLC
The following step is to secure a Kentucky EIN from the IRS for your LLC. Note: An EIN, also known as a Federal Tax ID Number or Federal Employer Identification Number, is essential.
An EIN is needed to:
– Identify your LLC for tax purposes
– Open a business bank account
– Apply for business licenses and permits
How much does an EIN cost? The IRS provides an EIN at no charge.
How long does it take to receive an EIN? Online applications are processed in 15 minutes, while mail or fax applications may take 1-3 months.
How can I obtain an EIN?
– US Citizens/Residents: With an SSN or ITIN, apply online. Follow these instructions: Apply for an EIN online.
– Non-US Residents: You can’t apply online, but you can obtain an EIN via fax or mail. See these instructions: How to get an EIN without an SSN or ITIN.
6. Enroll for Limited Liability Entity Tax (LLET)
All LLCs in Kentucky are required to pay the Limited Liability Entity Tax (LLET) annually. If your LLC earns less than $3 million per year, it will be subject to a minimum tax of $175 each year. (The majority of LLCs pay this $175 minimum tax annually.) LLCs with earnings over $3 million will incur a higher tax, which is determined by the state’s sliding scale.
You can sign up for the Limited Liability Entity Tax through the Kentucky DOR: Business One Stop Portal online. For more information about the LLET, visit: Kentucky Department of Revenue: Corporate Income and Limited Liability Entity Tax.
What should I do after my LLC is approved?
Following approval, there are a few more steps to take.
Open an LLC Business Bank Account
You’ll need to establish a business bank account for your LLC. This simplifies accounting and record-keeping for your business transactions. Keeping a separate business account also preserves your personal liability protection by ensuring that your business finances remain distinct from your personal ones.
Get Business Licenses and Permits
The good news is that Kentucky doesn’t require a state general business license. However, depending on your LLC’s location, a local business license or permit might be necessary. For instance, starting a daycare could require a business license from your city or county. More details are available on our Kentucky Business License page.
File Your LLC Annual Report
Every LLC in Kentucky must submit an Annual Report each year to stay in good standing with the state. The filing fee for a Kentucky LLC Annual Report is $15 annually. When is it due? The report is due every year by June 30, but you can file and pay the fee starting January 1 each year. Your first report is due the year following your LLC’s approval. For example, if your LLC was approved on February 10, 2025, your first report is due by June 30, 2026. Reports can be filed online or by mail, but online filing is recommended for ease. Follow our step-by-step guide here: Kentucky LLC Annual Report.
File and Pay Taxes
LLCs themselves don’t pay federal taxes; instead, LLC members include their portion of the LLC’s income in their personal tax returns. How is your LLC taxed? By default, the IRS taxes an LLC based on its ownership: A Single-Member LLC is taxed as a Sole Proprietorship, while a Multi-Member LLC is taxed as a Partnership. You can also opt to have your LLC taxed as a C-Corporation or S-Corporation. Besides federal taxes, be aware of state and local income taxes, as well as sales tax. Learn more in Kentucky LLC Taxes.
Helpful Resources
How to Start an LLC in Kentucky FAQs
Can I start an LLC online in Kentucky?
Yes, you can establish your LLC online in Kentucky. The fee for filing the Articles of Organization is $40. When you file online, your LLC will be approved instantly.
What are the advantages of an LLC?
One major benefit of an LLC is the protection of your personal assets. If your business faces a lawsuit, your personal assets—such as your home, vehicles, and bank accounts—are safeguarded. This protection covers all LLC owners, known as LLC Members, regardless of whether you have a Single-Member or Multi-Member LLC. All LLC owners are shielded from business debts and liabilities. This protection is not available for Sole Proprietorships or Partnerships, making LLCs a more popular choice for business structures.
Another advantage is the LLC’s pass-through taxation. This means the LLC itself doesn’t pay federal income taxes; instead, profits pass through to the LLC Members, who then pay taxes on their personal returns. Kentucky’s state income taxes align with this federal tax treatment. For more details, see How are LLCs taxed.
Is Kentucky a good state to start an LLC?
Whether Kentucky is an ideal state for starting an LLC depends on your location and where you conduct business. If you reside in or operate in Kentucky, it makes sense to start your LLC there. While some websites discuss state tax rates and benefits, these are irrelevant if it’s not where you live and operate. For instance, forming an LLC in Delaware while living and doing business in Kentucky means you’ll need to register your Delaware LLC in Kentucky, incurring additional fees and still paying Kentucky taxes. This results in unnecessary costs and complications without any benefits.
In conclusion, if you live and do business in Kentucky, it’s a good state to start your business. If not, it isn’t advisable.
Real estate exception: If you’re buying real estate outside Kentucky, form your LLC in the state where the property is located. For more insights, see Best State to Form an LLC.
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