How to Start an LLC in Kentucky for $0 (KY LLC 2023)


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How to Start an LLC in Kentucky: If you’re looking to start an LLC in Kentucky 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 Kentucky. 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 Kentucky LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂

kentucky-llc

How to Start an LLC in Kentucky

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 in Kentucky, you must file your Certificate of Formation with the State and pay a filing fee of $40. 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 Kentucky. Below mentioned all 5 steps that explain everything you need to do to start a Kentucky LLC in 2023. Let’s get started! You can always hire a professional LLC formation service in Kentucky 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 Kentucky LLC

Kentucky name your llc

The first step while forming a limited liability company in Kentucky 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.

Kentucky LLC Naming Guidelines

There are a few specific requirements all the LLCs in Kentucky 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 Kentucky can have the same name. ZenBusiness offers unlimited business name searches at $0.
  • “Limited Liability Company”, “Ltd. Liability Co.”, “Limited Company”, “Ltd. Co.”, “LC”, “L.C.”, “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 Kentucky 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 –
Kentucky Business Entity Search – Online Search
Name Reservation Form – PDF
Name Availability Standards – Guidelines
Kentucky LLC Name Search – Instructions
Division of Business Filings
Business Filings
P.O. Box 718
Frankfort, KY 40602

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 on, then you can reserve your LLC name for 120 days. To keep the name, you must file a name reservation application and pay $15 to reserve your name with the Kentucky 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 Kentucky Secretary of State by submitting a Certificate of Assumed Name in Kentucky and the filing fee of $46.

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Apart from LLC formation, ZenBusiness offers customized website templates and incredible logo designs 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.

Do I have to include LLC in my company email/domain?

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 Kentucky

kentucky registered agent

The second step to forming an LLC in Kentucky 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 Kentucky. Hence, hiring a competent Kentucky Registered Agent for your LLC is necessary. 

Make sure your registered agent is a resident of Kentucky 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.

LLC Service

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  • 100% accuracy guarantee

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$39 + State Fees

  • Free operating agreement

  • DIY packages

  • Good customer support

These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Kentucky. Some LLC formation services also offer standalone Kentucky 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.

Who Can Be a Registered Agent?

A person above 18 years of age and has a physical address in the state of Kentucky 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.

Can I Be My Own Registered Agent?

Yes, you can be your own registered agent if you are a resident of the state of Kentucky 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 Kentucky.

Why Shouldn’t I be My Own Registered Agent?

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.

What is Piercing the Corporate Veil in LLC?

If an LLC is sued in Kentucky, 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.

Registered Agent Consent Application

In Kentucky, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $10 should be paid for it. For more information on the same, read our guide on how to change a registered agent in Kentucky.

Step 3: File Articles of Organization in Kentucky

Kentucky certificate of formation

The third and most important step in forming a Kentucky LLC is to file the Certificate of Formation. This Kentucky Articles of Organization is a legal document that is required to register your business with the Kentucky Secretary of State. It costs $40 (by mail and $208 online) to file your formation certificate in Kentucky. (Read more on LLC cost in Kentucky).

The Certificate of Formation 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 Kentucky LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to Kentucky, you must register as a Kentucky 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 “log in to Subscribe Account” option and log in with your credentials. If you’re not subscribed, then you can directly start filing your LLC by clicking on the “Online Filing” button below. Read more about the Kentucky Articles of Organization for online registration.

How to File by Mail

If you prefer filing real-life forms for your Kentucky LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,

Mailing Address: Michael G. Adams
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602

In-person Drop-off: Room 154, Capitol Building
700 Capital Ave.
Frankfort, KY 40601

Processing Time: Normally, it takes around 4-5 business days (approx) to get your LLC formed in Kentucky. 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.

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Every LLC owner has to pay the filing fees to register their business in Kentucky. 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 Kentucky.

Step 4: Create Your Kentucky LLC Operating Agreement

Kentucky operating agreement

Moving on to the fourth step, filing your operating agreement. An operating agreement is a 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 Kentucky 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 Kentucky LLC later. Hence, having an operating agreement may not be necessary but it is surely ideal.

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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 a Kentucky LLC EIN

Kentucky file EIN for llc

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 for that matter. 

EIN is needed when the LLC hires employees. Hiring employees in Kentucky LLC requires following specific rules and regulations. On the other side, EIN for Kentucky foreign LLC should be obtained if your LLC is based in other states.

To obtain EIN (aka FEIN), one has to 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 who can help you with the process.

Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999

Fax: (855) 641-6935 | Fee: Free

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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 Kentucky. 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 Kentucky 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,

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 Kentucky LLC

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 Kentucky 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 Kentucky,

Fees/TaxAmount to be Paid
Name Reservation Fee (online)$15
Articles of Organization Fee$40
LLC Annual Fee$15
Sales Tax6%

In Kentucky, 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 1 year without registering your LLC. It can be renewed by paying $15 30 days before the 120 days span is over.

In Kentucky, an Annual Report has to be produced every year. It costs $15. Also, the State of Kentucky requires to pay a Sales Tax of 6%. Read our guide on LLC costs in Kentucky for more information.

Kentucky Foreign LLC

If you are interested in forming a Foreign LLC in Kentucky, then you need to file the Certificate of Foreign LLC to the Kentucky 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 Kentucky SOS to form your foreign LLC in Kentucky. To know more in detail, check out our guide on Kentucky Foreign LLC.

Reasons to Start an LLC in Kentucky

Kentucky is one of those states where having an LLC is easy and cost-effective. Other than the filing fee, there are not many tax liabilities. LLCs with employees or LLCs that want to hire employees may have to pay employment taxes. The LLC formation process. tax filing, amendment filing, and personal tax returns filing are easy in Kentucky. Alongside there are various business funding options for small businesses, especially if it is a woman-owned business, you will get long-lasting benefits.

There is a whole list of key benefits that a person will encounter if they are thinking of starting an LLC in Kentucky. Out of those detailed benefits, some of them are discussed in brief so that you can adequately make up your mind regarding the opening of your LLC.

The state tax rebate

If a small business is thinking of incorporating into Kentucky, their LLC gets enrolled with the Kentucky Small Business Tax Credit (KSBTC) program. It is specially designed to give benefits to the starting-ups. Under this program, the LLC who has to pay the state tax in Kentucky under the KRS 141.0401 act can apply for a tax return.

This value may range from $3,500 to around $25,000, which is more than efficient for a small startup to thrive and pay up its bills for several months. Read more on Kentucky’s classification of LLC tax.

Sales tax credit through tourism attraction 

The Kentucky Tourism Development Act mainly targets the startup LLC’s that are formed in the Kentucky province. If they help the state attract tourists and increase the income through tourism, then the state tax that they have to pay will be paid back to them in the form of an incentive. 

A direct loan is given to some essential businesses

According to the Kentucky state, the primary income source is agribusiness, tourist places, and the service industries. That is why they are giving very importance to a program that Kentucky Economic Development Finance Authority starts. The main aim of this program is to provide some long-term finances by providing them a direct loan. 

It means that if you are entering the Kentucky LLC, you can also avail of the services of loan, which are not readily available.

Kentucky Business Investment 

The KBI benefit is mainly available by the fuel-based industry dealing with energy-efficient fuels and companies producing alternative energy from non-renewable fuels. Such companies are provided an income tax credit under the KBI program. This rebate is that the government thinks that these industries are doing some good work towards environmental improvement.

Top Industries Operating in Kentucky

If you are an entrepreneur looking to start an LLC in Kentucky, you should know about the industry in detail. You should know their contributions and size in the state to take the help of the below-mentioned information.

Coal Mining

Coal mining in the state produces more than 100 million tons which is the combined production of underground mining and surface mining. According to the census, 442 coal mines were operating in the state in 2017 with 4,000 registered mine workers, which increased to around 6,257 in the year 2017 who are working in underground mines.

Logistics Business

More than 540 logistics centers are currently present in the state, employing more than 75000-80000 people. The logistics trade in Kentucky is the state is at a day drive for 65% of US residents, which makes it a perfect place for planning the logistics and distribution centers by businesses. There is a spend of around $600 billion in the country, out of which 70% is served by Kentucky state.

Manufacturing

If you look at the most significant share in GDP, it is of the manufacturing sector that is around 18% recently. In 2009, this value was half, which shows growth in the manufacturing business in the state. The state is raising jobs for more than 14% of the population living in the state currently.

This field has been the best for workers as the pay scale has increased to around $44,000 per capita worker, which is 10-15% higher than other states and businesses.

These are the business industries that are at the top of the state list. If you want to know some low-investment businesses, then here are the options.

  • Gift Basket business
  • Airbnb
  • Calligraphy teaching business

Kentucky LLC Formation Review

Time needed: 5 minutes.

Just to recap, here are the easy steps again when forming an LLC in Kentucky. Click on the steps in this list to read the full detail.

  1. Name your Kentucky 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.
    name your llc

  2. Choose a Registered Agent

    In Kentucky, 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.
    registered agent

  3. File a Formation Certificate

    Filing a formation certificate is necessary when forming an LLC in Kentucky. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    articles of organization

  4. Create an Operating Agreement

    An operating agreement is not a strict requirement in Kentucky but something encouraged when you start an LLC to avoid future conflicts.
    operating agreement

  5. 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.
    file EIN for llc

How Fast Can I Form an LLC in Kentucky

For immediate filing, you can opt for an online method as it takes 1 business day. Filing via mail can take upto 3-5 business days.

<h4>How Fast Can I Form an LLC in Kentucky?</h4>If you’re thinking about starting a business, forming an LLC is a great way to limit your personal liability for business debts and lawsuits. But it’s important to get all of the right information before you start.

To register your LLC in Kentucky, you’ll need to prepare and submit the required paperwork. This includes filing Articles of Organization, reserving a name, and naming your registered agent. You’ll also need to apply for an EIN and register for unemployment insurance.

First, decide on a name that’s available for use in Kentucky. Then, reserve the name with the Secretary of State for up to 120 days by submitting a Reservation or Renewal of Reserved Name application online or through mail.

Then, choose an individual or professional service to serve as your registered agent in the state of Kentucky. This person or service will receive official legal documents on behalf of your company and forward them to the Secretary of State.

Having a registered agent is an essential part of forming your LLC in Kentucky. The agent must have a physical address in the state of Kentucky (not a PO box or virtual office) and be available to accept legal mail during regular business hours.

You can hire a registered agent yourself or appoint a professional service like Incfile. An experienced agent will help you keep your business up and running, while saving you time and money.

Next, you’ll need to file the Articles of Organization with the Secretary of State. This is the document that officially forms your business and establishes it as a legally recognized entity with the state government.

It’s very important to complete the Articles of Organization correctly. If you miss any details, it could cause your LLC to fall out of compliance with the state’s rules and regulations.

Once your articles are filed, the next step is to file a yearly report with the state. This is an annual requirement for all Kentucky LLCs. You’ll need to complete this form by June 30 every year.

The yearly report is an important document for your business to keep in good standing with the state’s government. It shows banks, customers, and other organizations that you are a legitimate business.

Another document that’s crucial for forming your business in Kentucky is the LLC Operating Agreement. It’s like an “instruction manual” that explains how the business will operate, including how profits will be shared among members and what will happen if a member leaves the company.

An operating agreement is especially important for small businesses, which are more likely to have disputes over their finances. In addition to protecting your business from legal issues, an operating agreement also ensures that the decisions you make are in the best interests of your company and its members.

While it’s not a requirement for all states, an operating agreement can help your company avoid costly litigation and conflict. It can also ensure that your business’s policies are in line with the laws of the state where you live.

F.A.Qs

Can I file an LLC in Kentucky by myself?

If you are a resident of Kentucky, 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.

What is the cost of forming an LLC in Kentucky in a year?

Apart from the formation fee of $40 (domestic LLC) and $90 (foreign LLC), LLC cost in Kentucky includes $15 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year

How long does it take to get an LLC in Kentucky?

It takes no time (immediate) to get a Kentucky LLC if you file it online. For the mail filing, it takes 3 to 5 business days to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands which has impeccable turnaround time.

How to renew my LLC in Kentucky?

Every year all the LLCs have to submit an Annual Report and pay $15 to the Kentucky Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.

What is the tax structure for an LLC in Kentucky?

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 Kentucky Classification of LLC Tax.

In Conclusion

LLCs are easier to establish than other business structures. Small businesses, especially start-ups, can easily start their LLCs in Kentucky 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.

3 thoughts on “How to Start an LLC in Kentucky for $0 (KY LLC 2023)”

  1. Hola saludos. Estoy tratando de conformar una empresa para limpieza de alfonbras y ductos de aires podria conformarla como LLC. Ademas soy pastor e iniciador del Centro Cristiano Integral de Sanidad; Inc cual esta registrada como iglesia nomprofit. Podria de alguna forma asociar estas dos empresas? Gracias y muchas bendiciones

    Reply
  2. Hola, estoy pensando en conformar una empresa de servicios de mantenimiento general en Kentucky. Quisiera saber los costos totales (pagos al estado y pago de tramite) para revisar mi presupuesto. Gracias.

    Reply

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