How To Form an LLC In Kentucky (KY)?

Kentucky is not only a state that’s great for sampling the finest bourbon and watching championship horse racing; it is also an attractive place for business owners to start a new small business.

If you’re reading this article, then you probably agree. And if you want to learn how to form an LLC in Kentucky, then we are here to help.

Keep reading to learn more about the steps of forming an LLC in Kentucky and how to speed up the process with the help of an LLC formation company.

Create a Name for Your Kentucky LLC

Choosing an LLC name is the first step in getting your Kentucky business off the ground. We recommend choosing a name that is related to your business, sticks in the minds of your customers, and is easy to pronounce.

The chosen name must also comply with the naming requirements of a business operating in the United States and Kentucky, specifically:

• Your Kentucky LLC name must be unique and distinguishable from other LLCs.
• The name of your Kentucky LLC should not include words that confuse your business with any government agency, such as FBI, State Department, Treasury, etc.
• Restricted words like university, bank, and attorney may need additional paperwork or a licensed person, like a lawyer or doctor, to be part of your Kentucky LLC.
• The chosen LLC name must include one of the following phrases: “LLC’” “Limited Liability Company,” or “L.L.C.”

Run a name search

Once you have chosen a name for your LLC in Kentucky, we recommend checking if the name is available or if it is already taken by another business entity. This is easily achieved by running a name search on the Kentucky Secretary of State website.

Secure a domain for your Kentucky LLC

After confirming that your chosen LLC name is available, we recommend securing a domain related to your business name. Ideally, this will be something like:

Yourbusinessname.com

But other variations that include your location or service (yournameentucky.com or yournamecarrepair.com) also work.

Appoint a Registered Agent

All LLCs in Kentucky are legally required to appoint a registered agent. Your registered agent is responsible for receiving and forwarding legal and state correspondence documents on behalf of your LLC.

They must be Kentucky residents with a physical street address (not a P.O. Box address) in the state. Moreover, your registered agent must be available to receive documents during regular business hours.

You can appoint yourself or someone within the business to act as a registered agent for your LLC. You can also hire a professional registered agent service provider like one of the excellent options we’ve listed below.

You’ll need to pay a small fee to these third parties, but it’s a worthwhile investment. A specialist registered agent will keep you in compliance with state laws and free you up to grow your business.

ZenBusiness

ZenBusiness is a leading registered agent service provider in Kentucky. They are rated #1 on MarketWatch, Investopedia, and Forbes and have assisted more than 300,000 business owners.

ZenBusiness’ registered agent services cost $199 per year and include the following:

• Email notifications
• Mail forwarding
• Fast turnaround
• Document scanning
• Access to a custom dashboard.

Other LLC formation services ZenBusiness offers include creating an operating agreement, securing a domain name and website, business license reports, EIN, taxes and accounting, annual reports, incorporation, and banking and finances.

Northwest

Northwest is another incredible registered agent service provider in Kentucky. Their annual fee is only $125 and includes the following services:

• Document scanning
• Pre-filled state forms
• Mail forwarding
• Annual report reminders
• Compliance notifications
• Corporate guides
• Online document storage.

You can even get a small discount ($100 per year) if you use Northwest’s multi-year registered agent services in more than four states. You can also hire Northwest for other LLC formation services like trademarking, payment processing, mail forwarding, annual report filing, phone services, and a virtual office.

IncFile

IncFile has helped over 800,000 businesses to remain compliant by offering them the following registered agent services:

• Automatic email forwarding
• Access to tailored dashboard
• Personalized email and SMS notifications
• Online document storage

While their registered agent services cost $119 per year, you will get a free first year of registered agent services if you use IncFile to form your LLC.

You can also hire IncFile for other LLC formation services like amendment, tax consultations, virtual address, EIN, certificate of good standing, business licenses and permits, and foreign qualification.

File Articles of Organization

After choosing a name for your Kentucky LLC and appointing a registered agent, you must file an Article of Organization. This legal document registers your business as a separate entity with the Kentucky Secretary of State.

The simplest way to file your Article of Organization is online via the Kentucky Business One Stop Portal at a cost of $40. You will be required to provide the following information:

• The purpose of your LLC
• The name and physical address of your LLC
• Names and street addresses of all the initial members and managers
• The physical address and name of the hired registered agent.
• The effective date of your Kentucky LLC

You can also file in person or by mail. If you opt for this option, you must download the Kentucky Articles of Organization form and fill it out accurately. Then send the copy together with a check for the filing fee of $40 to the following address:

Kentucky State Treasurer – Kentucky Office of the Secretary of State

700 Capital Avenue

P.O. Box 718

Frankfort, KY 40602-0718

All Kentucky businesses are required to file an annual report at a cost of $15.

Write an Operating Agreement

Business owners in Kentucky are not legally required to create, formalize, and file an Operating Agreement for their LLCs. However, we recommend creating one.

An Operating Agreement is a legal document that outlines the LLC structure and the roles and responsibilities of each member of your LLC. It also defines the ownership percentage of your business entity.

A solid Operating Agreement should include the following details:

• The responsibilities and duties of each LLC member
• Loss and profit-sharing rules
• The voting rights
• Special perks and powers given to members
• The ownership percentage of each member
• Ownership transfer rules
• Guidelines for adding or removing members.

Please consult a legal professional if you need help creating your operating agreement.

Acquire Licenses and Permits

Most Kentucky-based businesses will require at least one license or permit in order to operate. The requirements and fees for the permits and licenses vary depending on the type of business license you want.

Generally, you will require a business license. You may also want to check with the Kentucky Department of Licensing for any other additional license and permit for your specific business.

You can also check the list of all agencies that handle licenses and permits, depending on your industry and profession.

Obtain Federal and State Tax IDs.

All Kentucky LLCs, except single-member LLCs, will be required to acquire a Federal and State Tax ID. This employee identification number identifies your LLC to the Internal Revenue Service (IRS). Think of it like a Social Security Number for your business.

You will need a Federal and State Tax ID to perform various business functions, such as filing taxes, hiring employees, and opening a business bank and credit account.

Getting a Federal and State Tax ID online from the Internal Revenue Service website is free. It is a straightforward process that takes only a few minutes. For instance, the IRS will give you a Federal and State Tax ID instantly after answering some basic questions, such as:

• Your type of LLC (business)
• Names of the LLC members
• Your business (LLC) industry.

On top of this, all new Kentucky LLCs must obtain a State Tax Number through the Kentucky OneStop Portal. This number allows you to pay for corporate taxes, state sales taxes, and any other state employment withholding tax.

Open a Business Bank Account

After getting a Federal and State Tax ID, the next step will be to open a business bank and credit account. Having a separate business bank account separates your personal assets from company funds. It will also make it easier to track your business transactions (investments, tax deductions, expenses, cash flow, etc.) and pay taxes.

You can easily open a bank account in Kentucky by visiting your nearest bank and providing the following documents:

• Article of Organization
• Operating Agreement
• Federal and State Tax ID

If you don’t already have a business bank account, one of the following Kentucky banks may be able to help:

• First Kentucky Bank
• Citizens Bank of Kentucky
• First National Bank of Kentucky

Get a Quote for Kentucky Business Insurance

Purchasing a Kentucky business insurance policy is another critical step in forming your LLC. While LLCs provide limited liability to the business owners in case of a claim or lawsuit, you will still need relevant business insurance policies to protect your Kentucky LLC.

There are multiple Kentucky business insurance policies you may consider purchasing. For example, the State of Kentucky is strict about worker’s compensation. Therefore, if your LLC has employees, you must purchase a worker’s compensation insurance policy.

You may also need other insurance policies, such as

• Professional liability insurance
• Auto insurance,
• Commercial liability insurance

Get a competitive quote for all your business insurance needs by visiting a comparison website like Insureon.

Buy an LLC Formation Package Instead

Forming a Kentucky LLC can be a complex and time-consuming exercise. So, if you need help with the steps discussed in this article, consider hiring an LLC formation service provider.

There are multiple LLC formation packages that you can purchase to accelerate and streamline the process of creating your LLC. Some of these services are even free to use.

ZenBusiness is one of our top recommendations for an LLC formation company. Their Starter Package features all the tools required to form an LLC in Kentucky, such as registered agent, EIN, operating agreement, etc.

They also have two other LLC formation packages that include additional tools to speed up and make forming your Kentucky LLC easier. For instance, the Pro package ($199) and Premium package ($349) include worry-free compliance, domain name, and expedited processing.

LegalZoom is another top LLC formation company to consider. Their Basic LLC formation package is free of charge — you only need to pay the state filing fee. They also have two packages for business owners who don’t mind spending extra cash on forming their LLC in Kentucky. At only $299, you will get access to trademarking, Article of Organization, power of attorney, EIN, and expedited filing.

FAQs About Forming an LLC in Kentucky

How Long Will It Take to Form My Kentucky LLC?

Forming an LLC in Kentucky takes one business day by filing your Article of Organization online or two to three weeks by mail. You can also pay for expedited filing if you want fast delivery.

How Much Does It Cost to Set Up an LLC in Kentucky?

To set up an LLC in Kentucky, you must file an Article of Organization online at a cost of $40. You will also be required to file your annual report at a cost of $15 every year.

Can I Act as my Own Registered Agent in Kentucky?

Yes. You can appoint yourself to act as a registered agent for your Kentucky LLC, provided you are a Kentucky resident with a permanent street address. You must also be available during all regular business hours to receive legal and business documents.

Can I Form a Single-Member LLC in Kentucky?

Yes. Kentucky legislation allows you to form a single-member LLC. The steps of forming it are similar to what we have discussed in this article.

Start Your Kentucky Business Today

Forming your LLC in Kentucky can be a straightforward and affordable process if you follow the steps outlined in this article.

But don’t worry if you don’t have the time to do it yourself. You can hire an LLC formation company to take care of everything for you. We wish you the best of luck, however you choose to proceed!

Also see:

• Kentucky (KY) Secretary of State (SOS) LLC & Business Search
• Kentucky (KY) Registered Agent Services
• How To Find Kentucky Bookkeepers