How to Start an LLC in Hawaii

Starting an LLC in Hawaii is easy, just follow these simple steps:

To start an LLC in Hawaii you will need to file the Articles of Organization with the State of Hawaii, which costs $50. You can apply online or by mail. The Articles of Organization is the legal document that officially creates your Hawaii Limited Liability Company.

Follow the step-by-step guide below to start your Hawaii LLC today and get your business up and running.

STEP 1: Name your Hawaii LLC

Choosing a company name is the first and most important step in starting your Hawaii LLC. Be sure to choose a name that complies with Hawaii naming requirements and is easily searchable by potential clients.

1. Follow the naming guidelines:

• Your name must include the phrase “limited liability company” or one of its abbreviations (LLC or L.L.C.).
• Your name cannot include words that could confuse your Hawaii LLC with a government agency (FBI, Treasury, State Department, etc.).
• Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your Hawaii LLC.

For a complete list of naming rules in Hawaii, you can read Hawaii's Naming Guidelines.

2. Hawaii Name Availability. Make sure the name you want isn't already taken by doing a business name search on the Hawaii State website.

3. URL Availability. We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL in order to prevent others from acquiring it.

After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free

Not sure what to name your business? Check out our LLC Name Generator.

FAQ: Naming an LLC

STEP 2: Choose a Registered Agent in Hawaii

You are required to nominate a Hawaii Registered Agent for your Hawaii LLC.

What is a Registered Agent? A registered agent is an individual or business entity responsible for receiving important legal documents on behalf of your business. Think of your registered agent as your business's point of contact with the state.

Who can be a Registered Agent? a Registered Agent must be a resident of Hawaii or a corporation, such as a registered agent service, authorized to transact business in Hawaii. You may elect an individual within the company including yourself.

Recommended: ZenBusiness provides the first year of registered agent service free with LLC formation ($39 + State Fees)

FAQ: Nominating a Hawaii LLC Registered Agent

STEP 3: File Your Hawaii LLC Articles of Organization

To register your Hawaii LLC, you will need to file the Articles of Organization with the State of Hawaii. This can be done online or by mail.

When filing your Articles of Organization, you will need to state whether your Hawaii LLC will be member-managed or manager-managed. Before you file, read our member-managed vs manager-managed guide to help you choose the best management structure for your LLC.

If you’re expanding your existing LLC to the State of Hawaii, you will need to form a Foreign LLC.

FAQ: Filing Hawaii LLC Documents

STEP 4: Create Your Hawaii LLC Operating Agreement

When creating an LLC in Hawaii, LLCs are not required to have an operating agreement, but it's a good practice to have one.

What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.

For more information on operating agreements, read our Hawaii LLC operating agreement guide.

FAQ: Creating an Operating Agreement

STEP 5: Get a Hawaii LLC EIN

What is an EIN? EIN stands for Employer Identification Number. EINs are a nine-digit number assigned by the Internal Revenue Service (IRS) to help identify businesses for tax purposes. It is essentially a social security number for a business.

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why do I need an EIN? An EIN is required to:

• Open a business bank account
• File and manage Federal and State Taxes
• Hire employees

Where do I get an EIN? You can get an EIN for free from the IRS. Getting an EIN is an easy process that can be done online or by mail.

Note
FOR INTERNATIONAL EIN APPLICANTS: You do not need a SSN to get an EIN. For more information, read our How to Get an EIN as a Foreign Person guide.

FAQ: Getting a Hawaii LLC EIN

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Protect Your Business & Personal Assets

Business Banking for Personal Asset Protection

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

• Separates your personal assets from your company's assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company's credit history, which can be useful to raise capital later on.

Get Insurance

Business insurance helps you manage risks and focus on growing your business. The most common types of business insurance are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers' Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In Hawaii, businesses with one or more employees, including LLC members and corporate officers, are required by law to have workers compensation insurance. Get a free quote with ADP.

Properly Sign Legal Documents

Improperly signing a document as yourself and not as a representative of the business can leave you open to personal liability. When signing legal documents on behalf of your company, you could follow this formula to avoid problems:

1. Formal name of your business
2. Your signature
3. Your name
4. Your position in the business as its authorized representative

See the image below for an example.

This ensures that you are signing on behalf of your LLC and not as yourself.

Keep Your Company Compliant

Hawaii Business Permits and Licenses

To operate your Hawaii LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.

The details of business licenses and permits vary from state to state. Hawaii requires all businesses such as sole proprietorships, DBAs, LLCs, corporations (S corp and C Corp), partnerships, etc. to obtain a General Excise Tax License. Make sure you read carefully and don't be surprised if there are short classes required as well.

Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.

Find out how to obtain necessary licenses and permits for your business or have a professional service do it for you:

• Federal: Use the U.S. Small Business Administration (SBA) guide.
• State: Visit Hawaii's Business Licenses.
• Local: Contact your local county clerk and ask about local licenses and permits.

Hawaii LLC Tax Requirements

Depending on the nature of your business, you may be required to register for one or more forms of state tax.

SALES TAX

If you are selling a physical product, you’ll typically need to register for a seller's permit through the Hawaii Department of Taxation website.

Hawaii does not have a sales tax and instead imposes a General Excise Tax.

Sales tax, also called "Sales and Use Tax," is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.

Read our sales tax guide to find out more.

EMPLOYER TAXES

If you have employees in Hawaii, you will have to register for the Unemployment Insurance Tax through the Department of Labor and Industrial Relations. You will also need to sign up for the Employee Withholding Tax through the Hawaii Department of Taxation on behalf of your employees.

Federal LLC Tax Requirements

Most LLCs will need to report their income to the IRS each year using:

• Form 1065 Partnership Return (most multi-member LLCs use this form)
• Form 1040 Schedule C (most single-member LLCs use this form)

How you pay yourself as an owner will also affect your federal taxes. Visit our guide to learn more about how to pay yourself from your LLC.

File Your Hawaii LLC Annual Report

Hawaii requires LLCs to file an annual report with the Department of Commerce. This can be done online or by mail.

Avoid Automatic Dissolution

LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk the loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.

Make Running Your Business Easier

After starting a business, two of the most important things you can do are get professional accounting and hire the right employees. Streamlining these processes can save you time and money as your business grows.

Hiring Employees

If you plan to hire employees, stay compliant with the law by following these steps:

• Verify that new employees are able to work in the US
• Report employees as "new hires" to the State
• Provide workers' compensation insurance for employees
• Withhold employee taxes
• Print workplace compliance posters and place them in visible areas of your workspace

Find out more information from the Hawaii Department of Commerce and Consumer Affairs.

FAQ: Hiring Employees

Accounting For Your Hawaii LLC

It’s critical to get your books in order, even if you haven’t officially opened for business. A well-managed accounting system will help you:

• Track your business finances, including bills, expenses, and income.
• Simplify your annual tax filings.

You can maintain your accounting in two ways

• Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
• Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.

Interfacing with Clients and Customers

In the day-to-day of running a business, it's hard to be readily available for new clients or customers who want to contact you. For service-based businesses that don’t already have a brick-and-mortar location, a virtual office can solve this problem. You can get a dedicated business mailing address and a business phone number with call-forwarding so that you never need to worry about losing a potential customer.

Women in Business Tools and Resources

If you have a woman-owned business, many resources are available to help you concentrate on your business’s growth:

• Funding - (ie. grants, investors, loans)
• Events - (ie. conferences, meetups)
• Guides - (ie. business formation, personal growth)
• Support - (ie. advice, communities, business strategies)

Our information and tools will provide educational sources, allow you to connect with other women entrepreneurs, and help you manage your business with ease.

More Information

Register as a Foreign LLC in Hawaii

Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in Hawaii, you will need to register as a foreign LLC. This can be done online or by mail.

How to Obtain a Certificate of Good Standing

A Certificate of Good Standing verifies that your Hawaii LLC was legally formed and has been properly maintained. Several instances where you might need to get one include:

• Seeking funding from banks or other lenders
• Forming your business as a foreign LLC in another state
• Obtaining or renewing specific business licenses or permits

You can order a Hawaii Certificate of Good Standing online.

Dissolve Your Hawaii LLC

If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your Hawaii LLC, there are two broad steps:

• Close your business tax accounts
• File the Articles of Dissolution

When you are ready to dissolve your LLC, follow the steps in our Hawaii LLC Dissolution Guide.