How to Start an LLC in Kentucky (2024 Guide)
To get started, you'll need to pick a suitable business name, choose a registered agent, and file your Articles of Organization with the Kentucky Secretary of State ($40 processing fee).
You can do this independently, consult with a business attorney for specialized legal guidance, or join the other 65% of our readers and hire a specialized Kentucky LLC formation service (recommended).
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How to Form an LLC in Kentucky in 6 Steps
In order to form your LLC in Kentucky, there are certain steps you’ll need to complete:
- Name Your Kentucky LLC
- Choose a Registered Agent
- File the Articles of Organization
- Create an Operating Agreement
- Get an EIN
- File a Beneficial Ownership Information Report
Step 1: Name Your Kentucky LLC
Before you get started, you will need to pick a suitable name for your Kentucky LLC.
This will need to comply with all applicable naming requirements under Kentucky law and be both succinct and memorable, as this will make it easily searchable by your potential clients.
1. Important Naming Guidelines for Kentucky LLCs:
- Your name must end with the phrase “limited liability company,” “limited company,” or the abbreviation “LLC” or “LC.”
- The names of all professional limited liability companies must end with the phrase “professional limited liability company,” “professional limited company,” or the abbreviation “PLLC” or “PLC.”
- Unless this is the case, your name cannot include words that suggest that your LLC is affiliated with a state or federal agency. Examples of such words include “department,” “state secretary,” and “FBI.”
- Your name cannot contain restricted words that relate to certain professions (e.g., medicine, law, CPA services, etc.) unless you have received prior approval and/or have the required licensing from the relevant state body.
For more information, we recommend having a look at Kentucky’s statutory LLC naming guidelines.
2. Is the name available in Kentucky?
To check whether your desired name has already been taken by another business entity in Kentucky, you can perform a name search on the Kentucky Secretary of State’s website.
If you’re not going to start your LLC right away, it might be a good idea to consider reserving your name for up to 120 days. You can do this by filing a Reservation or Renewal of Reserved Name form with the Commonwealth of Kentucky and paying the $15 processing fee.
For more information, you can have a look at our Kentucky LLC Name Search guide.
3. Is the URL available?
You should check online to see if your business name is available as a web domain. Even if you don’t plan to make a business website right away, this is an extremely important step as it will prevent others from acquiring it, potentially saving you both time and money in the long term.
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Once you have verified your name is available, you may now select a professional service to complete the LLC formation process for you.
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FAQ: Naming a Kentucky LLC
LLC is short for “limited liability company.” It is a simple business structure that offers more flexibility than a traditional corporation while still providing legal protection for your personal assets. Read our What is a Limited Liability Company guide for more information.
Or, watch our two-minute video: What is an LLC?
You must follow the Kentucky LLC naming guidelines when choosing a name for your LLC:
- Include the phrase "limited liability company" or one of its abbreviations (LLC or L.L.C.).
- Do not use words that could confuse your business with a government agency (FBI, State Department, CIA, etc.).
- Receive the proper licensing when using the words such as lawyer or doctor.
If you are having trouble coming up with a name for your LLC, use our LLC Name Generator. That will not only find a unique name for your business but an available URL to match.
Most LLCs do not need a DBA, known as an assumed name in the state of Kentucky. The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under another name.
To learn more about DBAs in your state, read our How to File a DBA guide.
Step 2: Choose a Registered Agent in Kentucky
After you find the right name for your LLC, you will need to nominate a Kentucky registered agent. This is a necessary step in your Articles (i.e., the document used to file and register your LLC with the Commonwealth of Kentucky.
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.You can think of your registered agent as your business’s primary point of contact with the state.
Who can be a registered agent? A registered agent must be a resident of Kentucky or a business entity that is authorized to transact business in the Commonwealth. As a new business owner, you can elect to use an LLC member (e.g., yourself, a partner, etc.), work with a business attorney, or use a registered agent service.
Keep in mind that your Kentucky registered agent will need to either sign your Articles of Organization or complete a Statement of Consent Registered Agent form (submitted in conjunction with your formation documents) in order to be accepted.
FAQ: Nominating a Registered Agent
Yes. You can choose to act as your own registered agent, appoint a member of your LLC, work with a business attorney, or hire a professional registered agent service (recommended).
Keep in mind that you will need to be a resident of the Commonwealth of Kentucky in order to act as your LLC’s registered agent.
Using a professional registered agent service is an affordable way to manage government filings for your LLC. For most businesses, the advantages of using a professional service significantly outweigh the annual costs.
Step 3: File Your Kentucky LLC Articles of Organization
To register your LLC, you will need to file Form KLC: Articles of Organization with the Kentucky Secretary of State. You can do this online, in person, or via mail.
Before filing, make sure you have completed your Articles of Organization correctly. You will need to have filled in the following sections:
- Your LLC’s name
- Your LLC’s initial principal office address (this cannot be a P.O. box)
- Your LLC’s management structure (i.e., by members or by managers)
- Your registered agent’s name, street address, and consent to appointment (either as a signature or via a completed consent form)
Note: Paper filings will need to be submitted alongside two exact or confirmed copies. These will be file-stamped and then returned to your LLC’s registered office. You will then need to file one of those file-stamped copies with the county clerk of the county in which your LLC’s registered office is registered.
File the Articles of Organization
OPTION 1: File Online With the Kentucky Secretary of StateFile Online
- OR -
OPTION 2: File Form KLC by Mail or In PersonDownload Form
State Filing Cost: $40, payable to "Kentucky State Treasurer" (Nonrefundable)
Michael G. Adams
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602
Room 154, Capitol Building
700 Capital Ave.
Frankfort, KY 40601
Hours of Operation: 8:00 a.m.–4:30 p.m. ET
For help with completing the form, visit our Kentucky Articles of Organization guide.
Note: If you're expanding your existing business to the state of Kentucky, you'll need to register as a foreign limited liability company (LLC).
FAQ: Filing Kentucky LLC Documents
According to the Secretary of State’s website, all business filings (besides annual reports) are generally processed on the same day that they are received, but can take up to three business days.
An LLC is referred to as a "domestic LLC" when it conducts business in the state where it was formed. A foreign limited liability company must be formed when an existing LLC wishes to expand its business to another state.
Read our What Is a Foreign LLC article to learn more.
The cost of starting an LLC is at least $40, which is the filing fee that will need to be paid in order to submit the Articles of Organization to the Secretary of State.
To learn more, read our guide on the cost to form a Kentucky LLC.
Step 4: Create a Kentucky LLC Operating Agreement
An operating agreement is not required in Kentucky, 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 LLC owners are on the same page and reduces the risk of future conflict.
For more information on operating agreements, read our Kentucky LLC operating agreement guide.
FAQ: Creating a Kentucky LLC Operating Agreement
No. The operating agreement is an internal document that you should keep on file for future reference. However, many other states legally require LLCs to have an operating agreement.
Step 5: Get an EIN
You can get an Employer Identification Number (EIN) from the IRS for free. It is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a Social Security number (SSN) for the company.
Why do I need an EIN? An EIN number is required for the following:
- To open a business bank account for the company
- For federal and state tax purposes
- To hire employees for the company
Where do I get an EIN? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.
Get an EIN
Option 1: Request an EIN from the IRS
- OR -
Option 2: Apply for an EIN by Mail or Fax
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
FAQ: Getting an EIN
An SSN is not required to get an EIN. You can simply fill out IRS Form SS-4 and leave section 7b blank. Then call the IRS at (267) 941-1099 to complete your application. Learn more about applying as an international applicant.
All LLCs with employees, or those with a multi-member LLC must have an EIN. This is required by the IRS.
Learn why we recommend always getting an EIN and how to get one for free in our Do I Need an EIN for an LLC guide.
When you get an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing the S corporation (S corp) status. To learn more, read our LLC vs. S Corp guide.
Step 6: File a Beneficial Ownership Information Report
Beginning January 2024, LLC owners must file a Beneficial Ownership Information (BOI) report with the US Financial Crimes Enforcement Network (FinCEN). Existing LLCs can file their report any time between January 1, 2024, and January 1, 2025, while new LLCs must file their report within 90 days of formation.
This contains similar information to that of your Articles of Organization, such as your LLC name and member information, and can be filed online for free. Failure to file an accurate report on time can result in a $500 per day fine.
Note: There are certain filing exemptions, such as for large companies (i.e., more than 20 full-time employees), tax-exempt entities, and publicly traded companies.
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Maintain Your Kentucky LLC
After you’ve successfully formed your LLC, there are a couple of steps you’ll need to periodically take in order to maintain it, including:
- Submitting an annual report
- Sorting out your taxes
Below, we have outlined and discussed the different requirements and filing processes for each of these steps.
Submit the Annual Report
All LLCs based in Kentucky are required to submit a signed and dated annual report to the Secretary of State by June 30 every year along with a $15 filing fee. This report will keep the state’s records updated on key aspects of your business, such as:
- The address of its principal office
- Its current registered agent
- The names and addresses of its members/managers and directors.
You can submit this report online through the Kentucky Secretary of State website anytime between January 1 and June 30.
Note: Failing to submit your annual report by the deadline in June will result in administrative dissolution or revocation of your certificate of authority, depending on whether your LLC is a domestic or foreign entity.
Sort Out Your Taxes
There are several types of taxes that LLCs are required to pay at the local and state levels in addition to the federal income tax and self-employment taxes for LLCs elected as pass-through entities.
Here are some of the most common taxes you may come across in Kentucky, which can vary based on the nature of your business.
Kentucky is one of the few states that imposes a flat income tax rate of 5% on all income earned by resident and nonresident businesses. This means that no matter how much you earn, you will need to pay the same percentage of your income in taxes.
- Individual Income Tax: The members of LLCs with a default tax election are required to pay this flat 5% rate on their share of the LLC’s income by submitting Form 740 to the Kentucky Department of Revenue (for full-year residents) or Form 740-NP (for non-residents).
- Corporation Income Tax: LLCs that are treated as corporations for federal tax purposes are required to pay this flat 5% tax at an entity level on their total profits. In order to submit a return for corporate income tax, you’ll need to file Form 720 with the Department of Revenue.
Note: You can also use KY File, Kentucky’s online filing portal, to fill out these forms and file your income tax returns electronically free of charge.
Limited Liability Entity Tax
In Kentucky, LLCs with multiple members are liable to pay Limited Liability Entity Tax (LLET), which is imposed at a minimum of $175 a year. However, if your total gross receipts or gross profits exceed $3 million, you’ll be required to pay the lower of the two following rates:
- $950 per $1 million of Kentucky gross receipts or
- $7,500 per $1 million of Kentucky gross profits
Your LLC will need to pay and file a return for LLET by the 15th day of the fourth month following the close of the tax year, which can be done by submitting Form 720 to the Department of Revenue.
Sales and Use Taxes
Kentucky LLCs providing retail sales of tangible or digital property and certain services are required to pay statewide sales and use taxes at a rate of 6%. Unlike the majority of states, there are no local sales and use taxes in Kentucky.
It’s important to keep in mind that the filing and payment deadlines for sales and use tax will vary depending on the tax period assigned to you by the Department of Revenue.
Note: You will need to apply for a sales and use tax permit by filling out the Kentucky Tax Registration Application (Form 10A100), which can be completed online through the Kentucky Business One Stop Portal.
Steps After LLC Formation
After forming your LLC, you will need to get a business bank account and website, obtain all required business licenses, and get business insurance, among other things.
Visit our After Forming an LLC guide to learn more.