There are many different options when it comes to forming a business in Kentucky. From a legal perspective, there are three main types of Kentucky for-profit business entities: LLCs, S Corporations or C Corporations. At Incfile, we believe forming an LLC provides the right mix of liability protection and streamlined administration for many entrepreneurs.
In order to start an LLC in the state of Kentucky, there are some minimum requirements you must meet. These are a completed set of Articles of Organization, a business name and a fee you pay to the Kentucky Secretary of State. We recommend taking some other steps before formally starting your LLC:
- Research your target market to make sure there’s a demand for the products and services you provide.
- Read industry guides to give you a starting point in your niche.
- Create a comprehensive business plan that defines the most important aspects of your Kentucky business.
- Write an Operating Agreement that covers how you will run your LLC.
After you’ve created your Kentucky LLC, you will also need to review your business license requirements, understand ongoing filing needs, set up a separate business bank account and get an accountant.
In Kentucky, you register a business by completing and filing your Articles of Organization with the Kentucky Secretary of State. You will need to gather pertinent information about your business, fill out the form and send it to the Secretary of State along with your filing fee. This will officially create your LLC in Kentucky.
You can file your Articles of Organization on the Secretary of State website or mail it in. Alternatively, Incfile can guide you through every step of the process by getting details from you and filing the form on your behalf — for free! There’s no additional charge for our basic LLC filing service, so all you need to do is pay the Kentucky state filing fee.
At the time of writing the fee charged by the Kentucky Secretary of State is $40. You can always check the latest Kentucky filing fees here. In several states, you can also pay an additional fee for expedited filing through Incfile, which may help form your LLC faster. The amount of the expedited fee is dependent on how quickly you want your filing processed. Some LLC filing services do charge you extra to prepare and submit your filing documents, but at Incfile, we do this for free — so you only pay the state fee.
Once you’ve gathered all of your information together and filed your Articles of Organization (or had Incfile do it for you), it can take up to 3 business days for the Kentucky Secretary of State to legally form your LLC, however most are formed within the same business day. Because of the quick formation process in Kentucky, the state does not offer an expedited filing process to have your LLC formed faster.
There are a few ways to register your Kentucky LLC name.
- If you’re forming a new business and your business name is unique in Kentucky and meets state naming rules, you simply include it in your Articles of Organization.
- If you want to change the legal name of your business, file Articles of Amendment with the Secretary of State.
- If you just want to do business under a different name, you must file a Certificate of Assumed Name with the KY Secretary of State, or have Incfile do it on your behalf.
If you want to prevent people from using your business name across the U.S., you can file a trademark for the name. We can help.
In many other states, the legal formation documents that you file to create a corporation or LLC might be known as Articles of Incorporation. In Kentucky, this document is called your Articles of Organization, and it performs the same functions as the Articles of Incorporation.
No, the State of Kentucky does not allow the formation of a Series LLC at this time. A Series LLC is a special type of LLC where you create one “overall” business and then have individual, series LLCs within it, each counted as separate legal entities.
If you want to change your Kentucky Registered Agent you may do so by filing your Statement of Change with the Secretary of State. Here at Incfile, we provide a free Kentucky Registered Agent service for the first year if you file through us. If you’ve been using a different Registered Agent and want to switch to us, we’ll file the Statement of Change on your behalf.
If you need to know the Registered Agent of a specific Kentucky business, you can perform a Kentucky Registered Agent search within the state's business database.
As an LLC, any business profits you earn will be reported on your personal 1040 filing and reported and taxed as “pass-through” income. You will typically need to pay:
- Self-employment or payroll tax on all business profits
- Federal income tax on profits after you meet your tax-free allowance
- Sales tax for selling taxable products and services
Kentucky charges a 6 percent state sales and use tax on all retail sales, leases and rentals of most goods. Unlike many states, there are no local sales and use taxes in Kentucky. Some sales or services may be exempt from sales and use tax — you can find a list of exemptions here.
Any individual or entity meeting operating as a seller in Kentucky must register as a sales and use tax vendor with the KY Department of Revenue. You can complete this process online.
The base rate for Kentucky sales tax is 6 percent. In many states there may be additional sales tax depending on your region, county or city, however this is not the case in Kentucky. Once you know your overall sales tax amount, calculate the value of all your taxable products and services. Then, multiply that by your sales tax rate to understand how much you will need to pay.
Once your LLC’s sales and use tax registration with Kentucky Department of Revenue is complete, you will receive instructions on how often you must file a sales tax return and pay sales taxes. Returns and payments may be due monthly, quarterly or annually.
Some businesses will need to pay a corporate franchise tax in Kentucky, however it does not apply to LLCs unless your LLC is treated as a C Corporation for tax purposes.
LLCs are required to pay Limited Liability Entity Tax, however which is a tax levied for the privilege of having liability protection within the state of Kentucky. The details of the Kentucky Limited Liability Entity Tax can be found on the KY Department of Revenue website.
If you're operating a business in Kentucky you'll likely need some kind of business license in order to maintain compliance and continue to operate. The types of business licenses you need will vary depending on your type of business, industry, location and various other factors. We can research the types of business licenses you might need for you.