Starting a Kentucky LLC, step-by-step
Starting a Kentucky LLC costs $40. And it takes 1 day to get an LLC in Kentucky.
Here are the 6 steps to forming an LLC in Kentucky:
- Choose an LLC Name
- Select a Registered Agent
- File Articles of Organization
- Create an Operating Agreement
- Get an EIN
- Register for Limited Liability Entity Tax
If you want to form your LLC yourself, follow our free guide below.
If you want someone to take care of it for you, we recommend hiring Northwest Registered Agent
(We recommend Northwest. We've reviewed all the top companies in the industry. And Northwest is our #1 pick for prices, customer support, and address privacy. Check out Northwest vs LegalZoom to learn more.)
How much does it cost to start an LLC in Kentucky?
It costs $40 to start an LLC in Kentucky.
And then it costs $15 per year.
What are these fees for?
- The $40 is to file the Articles of Organization – the document that creates an LLC.
- The $15 per year is for your Annual Report – a mandatory filing that keeps your LLC in good standing.
And good news, veterans! In Kentucky, if a military veteran owns 51% or more of an LLC, you can file that LLC’s Articles of Organization for free ($0).
Veteran-owned LLCs can also get the $15 fee waived on the LLC Annual Report for the first 4 years.
Said another way, you still have to file the Annual Report forms each year, but the first 4 years are free.
This program (called Boots to Business) is also available to active-duty service members and members of the National Guard.
Learn more about Free LLCs for Kentucky Veterans.
And to learn more about LLC Costs, see LLC Costs in Kentucky.
How long does it take to get an LLC in Kentucky?
If you file your LLC by mail, it will be approved in 1 business day (plus mail time).
But if you file online, your LLC will be approved immediately.
Please see How long does it take to get an LLC in Kentucky to check for any delays.
Here are the steps to forming an LLC in Kentucky
1. Search your LLC Name
Search your Kentucky LLC Name to make sure it’s available in the state.
You need to do this because two businesses in the state can’t have the same name.
First, search your business name and compare it to existing businesses in Kentucky. You can make sure the LLC Name you want is unique from existing businesses using the Business Entity Search from the Kentucky Secretary of State.
Second, familiarize yourself with the naming rules in Kentucky (so your Kentucky LLC gets approved).
We’ll explain both in more detail here: Kentucky LLC Name.
2. Choose a Kentucky Registered Agent
The next step is to choose a Kentucky Registered Agent.
A Kentucky Registered Agent is a person or company who accepts legal mail and state notices on behalf of your Kentucky Limited Liability Company.
Who can be an LLC Registered Agent?
You have 3 options for who can be the Registered Agent:
- A friend or family member
- A Registered Agent Service
The Registered Agent for your LLC must have a physical street address in Kentucky. PO Boxes aren’t allowed.
And the Registered Agent’s name and address will be listed on public records.
If you don’t have an address in Kentucky, or you want more privacy, you can hire a Registered Agent Service for your LLC.
Kentucky Registered Agent Services keep physical street addresses in Kentucky to meet state requirements – and our recommendation will also keep your information off public records.
We recommend Northwest Registered Agent
Our favorite feature about Northwest is they’ll let you use their office address throughout your LLC filing. This way, you can keep your address off public records.
They’ll also scan any mail sent to your LLC and upload it to your online account.
Northwest has excellent customer service, and they’re who we trust to be our own Registered Agent.
3. File Kentucky LLC Articles of Organization
To start an LLC, you need to file the Kentucky Articles of Organization.
This gets filed with the Kentucky Secretary of State.
The Kentucky Articles of Organization costs $40 if you file online.
This is a one-time fee to create your LLC.
If you want to file this yourself, see our step-by-step guide: Kentucky Articles of Organization.
Or, you can hire a company to do it for you.
4. Create a Kentucky LLC Operating Agreement
A Kentucky LLC Operating Agreement serves as a “companion” document to the Articles of Organization.
The Articles of Organization creates your LLC, and the Operating Agreement shows who owns the LLC.
Additionally, some banks require an Operating Agreement when you open an LLC bank account.
And having an Operating Agreement will be very helpful if you ever end up in court. Reason being, it helps prove that your LLC is being run properly.
That’s why we recommend that all LLCs have an Operating Agreement – including Single-Member LLCs.
Furthermore, an Operating Agreement is an “internal document“. Meaning, you don’t need to file it with the state or the IRS (Internal Revenue Service). Just keep a copy with your business records.
You can download a free template below.
Then, learn how to fill it out by watching our step-by-step Kentucky Operating Agreement video.
5. Get an EIN for your LLC
The next step is to get a Kentucky EIN Number from the IRS for your LLC.
Note: An EIN Number is also called a Federal Tax ID Number or Federal Employer Identification Number.
An EIN Number is used to:
- identify your LLC for tax purposes
- open a business bank account
- apply for business licenses and permits
How much does an EIN cost?
Getting an EIN Number from the IRS is completely free.
How long does it take to get an EIN?
If you apply online, it takes 15 minutes.
If you apply by mail or fax, it can take 1-3 months.
How can I get an EIN?
US Citizens/US Residents: If you have an SSN or ITIN, you can apply for an EIN online. Follow these instructions: Apply for an EIN online.
Non-US Residents: You can’t get an EIN online, but you can still get one by fax or by mail. Follow these instructions: How to get an EIN without an SSN or ITIN.
6. Register for Limited Liability Entity Tax (LLET)
All Kentucky LLCs must pay the Limited Liability Entity Tax (LLET) every year.
If your LLC makes under $3 million per year, then your LLC will owe the minimum tax of $175 each year. (Most people owe the $175 minimum tax each year.)
LLCs that make more than $3 million will owe more. This amount is calculated using the state’s sliding scale.
You can register for the Limited Liability Entity Tax online using the Kentucky DOR: Business One Stop Portal.
Read more about the LLET here: Kentucky Department of Revenue: Corporate Income and Limited Liability Entity Tax.
What do I do after my LLC is approved?
After your Kentucky LLC is approved, there are some additional steps.
Open an LLC business bank account
You’ll want to open a business bank account for your LLC.
This makes accounting and record-keeping much easier for your business finances.
Having a separate business bank account also maintains your personal liability protection. This is because it keeps your business entity finances separate from your personal finances.
Get Kentucky business licenses and permits
Good news, Kentucky doesn’t have a state general business license.
However, depending on where your LLC is located, you may need a local business license or permit.
For example, if you want to start a daycare, you may need a business license from the city or county.
You can learn more on our Kentucky Business License page.
File your Kentucky LLC Annual Report
All Kentucky LLCs must file an Annual Report every year.
The Annual Report keeps your LLC in good standing with the state.
How much does a Kentucky LLC Annual Report cost?
The Annual Report filing fee is $15 per year.
When is the Annual Report due?
Your Kentucky Annual Report is due every year by June 30.
That said, you can submit your LLC’s report and pay the filing fee as early as January 1 each year.
When is my first Annual Report due?
Your first Annual Report is due the year after your LLC was approved.
For example, if your LLC was approved on February 10, 2024, then your first Annual Report will be due by June 30, 2025.
How do I file my LLC Annual Report?
You can file your LLC’s Annual Report online or by mail. We recommend the online filing because it’s easier to complete.
Follow our step-by-step guide here: Kentucky LLC Annual Report.
File and pay taxes
LLCs don’t pay federal taxes. Instead, the LLC Members pay the taxes for the LLC.
Said another way, the owners pay taxes for the LLC as a part of their personal tax return.
How will my LLC be taxed?
By default, a Kentucky LLC is taxed by the IRS based on the number of owners your LLC has:
- A Single-Member LLC is taxed like a Sole Proprietorship.
- A Multi-Member LLC is taxed like a Partnership.
Alternatively, you can ask the IRS to tax your LLC like a C-Corporation or S-Corporation.
Besides federal taxes, there are also state and local income taxes – and sales tax. Learn more in Kentucky LLC Taxes.
How to Start an LLC in Kentucky FAQs
Can I start an LLC online in Kentucky?
Yes, you can file your LLC online in Kentucky. The Articles of Organization filing fee is $40.
When you start your LLC online, it will be approved immediately.
What are the benefits of an LLC?
The first benefit of an LLC is protecting your personal assets. Meaning, if your business is sued, your personal assets – like your home, cars, and bank accounts – are protected.
This protection applies to all LLC owners (called LLC Members). It doesn’t matter if you have a Single-Member LLC or Multi-Member LLC. All of the LLC owners are protected from the business debts and liabilities.
This type of protection wouldn’t apply if you operate as a Sole Proprietorship or Partnership. With these types of informal business structures, the owners aren’t protected in the event of a lawsuit. For that reason, Limited Liability Companies (LLCs) are a much more popular business structure.
Another benefit is LLC pass-through taxation. This means the LLC itself doesn’t pay federal income taxes. Instead, the profits “pass through” to the LLC Members. And the Members pay the taxes on their personal tax return.
And Kentucky state income taxes are very similar, since the state honors the federal tax treatment of your LLC.
To learn more, please see How are LLCs taxed.
Is Kentucky a good state to start an LLC?
Whether Kentucky is a good state to start an LLC depends on where you live – and where you’re doing business.
Meaning, if you live in or do business in Kentucky, then you should start your LLC in Kentucky. While many websites talk about tax rates and advantages of certain states, none of that applies if it’s not the state where you live and do business.
For example, if you form an LLC in Delaware, but live in and conduct business in Kentucky, you’ll also need to register your Delaware LLC in Kentucky (and pay extra fees). And you’ll end up paying Kentucky taxes anyway. This ends up leading to more costs and more headaches with no advantages.
In summary, if you live in and conduct business in Kentucky, then yes, Kentucky is a good state to start a business. If you don’t live in and do business in Kentucky, then no, Kentucky isn’t a good state to start a business.
Real estate exception: If you’re purchasing real estate outside of Kentucky, you should form your LLC in the state where the property is located.
For more information, please see Best State to Form an LLC.
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.