How to Start an LLC in Hawaii: If you’re looking to start a Hawaii LLC for $0, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC for free in Hawaii. However, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost $0.
On this page, You’ll find all the steps that must be taken to ensure that your Hawaii LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Hawaii
- After Starting Your Hawaii LLC
- Hawaii Foreign LLC
- Best Business Niches in Hawaii
- Hawaii LLC Formation Review
How to Start an LLC in Hawaii
An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.
If you wish to start an LLC, you must file your Certificate of Formation with the State and pay a filing fee of $50. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Hawaii. Below mentioned all 5 steps that explain everything you need to do to start a Hawaii LLC in 2023. Let’s get started! You can always hire a professional LLC formation service in Hawaii to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.
Step 1: Decide a Name for Your Hawaii LLC
The first step while forming a limited liability company in Hawaii is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
LLC Naming Guidelines in Hawaii
There are a few specific requirements all the LLCs in Hawaii have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Hawaii can have the same name. ZenBusiness offers unlimited business name searches at $0.
- “Limited Liability Company”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Hawaii State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Submit Offline Form to –|
|Hawaii Business Entity Search – Online Name Search|
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Hawaii LLC Name Search – Instructions
|Department of Commerce and Consumer Affairs|
Business Registration Division
P. O. Box 40
Honolulu, Hawaii 96810
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $7.50 (online) and $10 (By mail) to reserve your name with the Hawaii Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Hawaii Secretary of State by submitting an Application For Registration of Trade Name in Hawaii and the filing fee of $50.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
ZenBusiness – ($0 for LLC Formation)
Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Hawaii
The second step to forming an LLC in Hawaii is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Hawaii. Hence, hiring a competent Hawaii Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Hawaii or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0/year), you also get registered agent service and other services at a very reasonable price.
These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Hawaii. Some LLC formation services also offer standalone Hawaii registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.
A person above 18 years of age and has a physical address in the state of Hawaii can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent if you are a resident of the state of Hawaii and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in Hawaii.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in Hawaii, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
Step 3: File Articles of Organization in Hawaii
The third and most important step in forming an LLC is to file the Articles of Organization. This Hawaii Articles of Organization is a legal document that is required to register your business with the Hawaii Secretary of State. It costs $50 (by mail and online) +$1 as State Archive Fee to file your formation certificate in Hawaii.
The Articles of Organization includes details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in Hawaii LLC, one should know the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Hawaii, you must register as a Hawaii Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a subscriber, then click on the “Get Started” option under the “Start” tab and log in with your credentials on the next page. If you’re not subscribed, then you need to Sign-up first. Click on the button below to Sign-up or log in. Read more about the Hawaii Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your LLC registration, then you can download Domestic LLC Form LLC-1. Read the form thoroughly, fill it out, and mail it to the following address,
Department of Commerce and Consumer Affairs
Business Registration Division
335 Merchant St.
P.O. Box 40
Honolulu, HI 96810
335 Merchant St.
Honolulu, HI 96813
Email: [email protected]
Fax: (808) 586-2733
Processing Time: Normally, it takes around 14 business days (approx) to get your LLC formed in Hawaii. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Every LLC owner has to pay the filing fees to register their business in Hawaii. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Hawaii.
Step 4: Create Your LLC Operating Agreement in Hawaii
Moving on to the fourth step, filing your operating agreement. An operating agreement is an internal document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Hawaii LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Hawaii LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂
Step 5: Filing an LLC EIN in Hawaii
The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business.
EIN is needed when the LLC hires employees. Hiring employees in Hawaii LLC requires following specific rules and regulations. On the other side, EIN for Hawaii foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Limited Liability Company in Hawaii. If you do it yourself, it should take you a long time to understand and do all the steps properly.
However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.
After Starting Your Hawaii LLC
After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.
Apart from that, there are a few things you need to take note of,
- Get a company business bank account
- File Hawaii business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Hawaii LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings, to make sure your LLC is up-to-date.
Cost of Starting an LLC in the State of Hawaii
LLCs can be formed for $0. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Hawaii must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Hawaii,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee (online)||$7.50|
|Name Reservation Fee (By mail)||$10|
|Articles of Organization Fee||$50|
|LLC Annual Fee||$12.50|
In Hawaii, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 120 days without registering your LLC.
In Hawaii, an Annual Report has to be produced every year. It costs $12.50. The state of Hawaii does not have any Sales Tax. Instead, it has various general excise taxes starting from 0.15% on insurance commission to 4% on other products. Read our guide on LLC costs in Hawaii for more information.
Hawaii Foreign LLC
If you are interested in forming a Foreign LLC in the state of Hawaii, then you need to file the Certificate of Foreign LLC to the Hawaii Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents, like the Certificate of Good Standing, etc. to the Hawaii SOS to form your foreign LLC in the state of Hawaii. To know more in detail, check out our guide on Hawaii Foreign LLC.
Reasons to Start an LLC in the State of Hawaii
When it comes to Hawaii, people think of a tourist spot. But, it is surprising how over 128,000+ small businesses are operating in Hawaii and created around 3700+ jobs today. The growing economy in this state attracts more businesses than in earlier times. EZ, several business funding options, and tax credits are some prominent benefits of starting an LLC in the state of Hawaii.
In general, an LLC is a simple business structure. It has long-lasting benefits. One of the biggest benefits of having an LLC is the tax structure. There are no direct business taxes LLCs have to pay. Every LLC gets tax classification options at the time of registration. LLCs also get a member-managed or manager-managed option. For a legal requirement, LLCs have to file their business. LLCs with employees are required to obtain EIN. If you have a foreign business, there are different tax benefits for LLCs in Hawaii. Some of the benefits are mentioned below,
Growing Strong Economy
Hawaii is having more than 31,000 active LLCs at this moment. Every year around 7500+ LLCs is being formed in this state. The growing strong economy makes it easy for businesses to create jobs and employment opportunities.
Hawaii Incentive programs
The biggest incentive program available in this state is the Enterprise Zones program. Administered by the Department of Business, Economic Development & Tourism, the program offers tax credits to the LLCs operating in special economic and enterprise zones. Creating more jobs, developing stressful areas, and developing projects gain more incentives in Hawaii.
No Double Tax assurance
Double tax is the fear of every person thinking of making an LLC. They always think of how they can save themselves from the double taxes, and their search ends up with an LLC in the state of Hawaii. The government ensures that the LLC will be taken through a process that will save their double tax. It increases the potential profits of the member. Read more on Hawaii’s classification of LLC Tax.
Enjoy the Benefits of the Corporation
Liability protection is provided to every corporate member, but if one chooses LLC in the state of Hawaii, they also get the premium services of liability protection. If the LLC is under any debt, then the creditors cannot move to the assets of the members of the LLC to recover their money.
Best Business Niches in Hawaii
If a person wants to Start an LLC in the state of Hawaii, they have to find the best niche. There are many industries, but new businesses in the state are left in a few industries. Pick a niche, meet the LLC formation requirements, pay the filing fees, and start your LLC in the state of Hawaii. Here is the list of the best businesses one can consider.
Hawaii apparel maker Business
Hawaii is a beach state which is known for its locally-made apparel. The most sold clothing in the state is Aloha shirts which are made in local manufacturing units. The first manufacturing unit started in the 1960s, and till that time, the demand for this apparel has never decreased. The apparel industry is still booming, giving opportunities to new businesses also.
Vacation renting services
Being a beach state, the state of Hawaii is flooded with tourists every time of the year. The state has noticed a footfall of around 10 million people in 2019, which increased about 5.4% from the previous figure. Now, these tourists need a place to stay when they visit the state. You can plan space and provide renting services to the tourist and provide the best value for reoccurring services.
Tourist Guide Company can also be a profitable business in the state. There many points of attraction in the local area of the state which one can visit for which a tour guide is a must. As mentioned above, the number of people visiting the state is increasing, so the demand for catering to them is the best guide services.
Boat owners and renting companies
Boating in the middle of the sea is still loved by most people visiting Hawaii. That is why you can plan to open a boat renting company nearby the beach. Now all you need to do is start advertising your business among the tourists and earn huge bucks.
Some small businesses that a person can also think of are:-
- Business advertisement companies
- Landscaping business
- Small grocery store business
- Weeding photography
Hawaii LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Hawaii. Click on the steps in this list to read the full detail.
- Name your Hawaii LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Hawaii, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming a Limited Liability Company in Hawaii. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Hawaii but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
Things to Consider While Stating an LLC in The State of Hawaii
In this article, almost all the broad steps are explained. However, these are all basic steps. There are some more things to consider when you’re starting your LLC. While doing the business name search, make sure to search the business name database properly to get an appropriate name for your business. If you hire a professional service, they provide a business name reservation service to make it easier for you. They have a business name search page where you can easily search for the name you have.
When we talk about business opportunities, entrepreneurs need driver business services as well. For example, business tax accounts, amendment filing services, tax filing service, and business license service. As soon as your LLC in this state, Hawaii, is formed, you must get separate accounts for business. Also, you must get a business credit card for smooth business.
There are business licensing requirements for the LLC. Your LLC needs to obtain Licenses. Depending on the type of business, you need to get the license. Before you get it, make sure to get all the details of business licenses. There will be fees for business licenses to be paid. Licenses like employees business licenses, coverage for employees, general business licenses, and such are required. Professional service providers offer business license report services. Before you get the service, read business license services reviews to get the best-fitted one.
Apart from Licenses, LLCs need permits. Based on businesses, you need to get permits. For example, health permits, signage permits, building permits, and others. A health permit is required for health-related business, and so on.
Overall, apart from these details, LLCs need to have a business accountant for various business checking. A registered agent for service to handle business documents, an operating agreement for a form of business ownership, future business partners, business dissolution, and other business operating procedures. You can read the operating agreement guide to know more about it.
There are professional business experts who offer a business kit or package at affordable prices. If you purchase them, all these services and requirements will be fulfilled quickly. The filing speed will be more than the usual time.
How Fast Can I Form an LLC in Hawaii
The LLC filing procedure in Hawaii takes upto 2 weeks, depending on the number of applications. This process can be expedited by paying additional fees.
An LLC is an excellent way to organize your business and limit your liability. But it also requires specific procedures. If you are thinking about forming an LLC in Hawaii, you may be wondering how quickly you can get everything set up. Here are some ways to make it happen.
First, you’ll want to choose a legal name. You can check the official Business Name Registry website for a list of available names. Then you’ll need to determine whether you’ll be a member-managed or manager-managed company. In either case, you’ll have to fill out the Articles of Organization for Limited Liability Company form.
When you form an LLC in Hawaii, you’ll be asked to designate a registered agent. A registered agent is a person or company that accepts legal mail on your behalf and keeps your records up to date. They also keep track of your business taxes and handle any maintenance issues. This is especially important if you operate outside of Hawaii. However, your Registered Agent can also be you.
Once you have your chosen Registered Agent, you’ll need to set up a business bank account. This will separate your personal assets from your company’s assets and simplify your taxes. It’s also a good idea to trademark your company’s name to protect your rights.
The next step is to set up an account with the Hawaii Department of Commerce and Consumer Affairs (DCCA). This can be done online or at a local office. Once you have an account, you’ll be able to access your business documents. For an additional fee, you can have your filings expedited. Expediting costs $25 and takes about three to five business days to complete.
Once you have set up your account, you’ll be able to pay your registered agent’s fees by cash, money order or credit card. Your registered agent will accept legal mail and paperwork during normal business hours. His or her address will be posted in the public record of your LLC.
After you’ve completed your LLC, you’ll need to pay your General Excise Tax License and Withholding Taxes. These fees are calculated based on the gross business income of your business. Also, you’ll have to apply for a Dealers in Farm Produce License. Depending on your specific business, you’ll have to apply for an Unemployment Insurance Tax and Sales and Use Tax.
You can also register your LLC for trademarking. Unless you’re in the financial services industry, you might want to keep your name fictitious or trademark a unique abbreviation. Trademarking allows you to extend your brand to other companies in your field.
As with other states, you’ll need to file your Articles of Organization for Limited Liability Company. You can file your articles of organization by fax, mail or online. Depending on where you file, your papers can take seven to 14 business days to process. Alternatively, you can pay an expedited fee and have your papers processed in one to three business days.
If you are a resident of Hawaii, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $50 (domestic LLC) and $50 (foreign LLC), LLC costs in Hawaii include $12.50 for Annual Reports every year. LLCs are not liable to pay sales tax but have to pay various general excise taxes.
It takes 2 weeks to get an LLC in the state of Hawaii if you file it online. If you hire a professional LLC service, then it might take less than that. We recommend ZenBusiness, which has an impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $12.50 to the Hawaii Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Hawaii Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups, can easily start an LLC in the state of Hawaii at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.