How to Start an LLC in Kansas | Mid 2023 Update

Starting a Limited Liability Company (LLC) in Kansas is a strategic choice for entrepreneurs looking to benefit from personal liability protection, tax advantages, and increased credibility. Kansas, known as the Sunflower State, offers a fertile ground for various businesses. This guide provides you with a comprehensive set of steps for how to start an LLC in Kansas.

Whether you are looking to start a full family office, or looking to get your personal finances in order, starting an LLC is a great place to start.

How to Start an LLC in Kansas: Step-by-Step Guide

Creating a Kansas LLC involves several essential steps to ensure compliance with state regulations. In this guide, you’ll find a detailed overview of the process for forming a Kansas LLC, including choosing a name, appointing a registered agent, filing the Articles of Organization, creating an operating agreement, obtaining an EIN, complying with tax and regulatory requirements, maintaining your LLC, and outsourcing LLC creation.

Choose a Name for Your Kansas LLC

The first step in forming your LLC is selecting a business name. The name you choose should include “Limited Liability Company”, “LLC”, or “L.L.C.” and be distinct from other registered entities in Kansas. Avoid using words that could confuse your LLC with a government agency (e.g., FBI, Treasury, State Department, etc.).

You can use the Kansas Secretary of State’s Business Entity Search Tool to check the availability of your desired name. If the name is available and you are not ready to file your Articles of Organization yet, you can reserve the name for 120 days by filing a Name Reservation application and paying a fee of $35.

Additionally, securing a matching domain name for your business’s online presence is advisable.

Appoint a Registered Agent in Kansas

A registered agent with a physical street address in Kansas is a legal requirement for your LLC. This agent is responsible for receiving legal documents and official notices on behalf of your LLC. A registered agent can be an individual residing in Kansas or a business entity authorized to do business in the state. The registered agent you appoint should be reliable and available during normal business hours.

File Kansas LLC Articles of Organization

To officially create your LLC, file the Articles of Organization with the Kansas Secretary of State. This document requires information such as the name of your LLC, registered agent’s details, and whether the LLC will be member-managed or manager-managed. You can file online or by mail with a filing fee of $165. It’s wise to retain a copy of the filed Articles of Organization for your records.

Create an Operating Agreement for Your Kansas LLC

Although not mandated by Kansas law, having an operating agreement is highly advisable. This internal document outlines the operating procedures, member roles, ownership structure, and management style of your LLC. Ensure your operating agreement includes details on ownership percentages, voting rights, member duties, and how profits and losses are shared, as well as protocols for adding or removing members.

Consider consulting an attorney or using an online template to ensure your operating agreement is comprehensive and conforms to Kansas statutes.

Obtain an EIN for Your Kansas LLC

An Employer Identification Number (EIN) is vital for tax reporting purposes. It’s a nine-digit number assigned by the Internal Revenue Service (IRS) and is essential for opening a business bank account, filing taxes, and hiring employees. You can obtain an EIN from the IRS for free. Secure this number as it will be used in various legal and financial transactions.

Comply with Kansas LLC Tax and Regulatory Requirements

Ensure that you understand and comply with tax and regulatory requirements:

  • Federal Income Tax: LLCs are typically pass-through entities, and profits and losses are passed through to members who report them on their individual tax returns. However, you can opt to have your LLC taxed as a corporation.
  • State Income Tax: Kansas levies a state income tax on LLC members for their share of the LLC’s profits.
  • Sales Tax: If your LLC is selling goods or certain services, you must register for a sales tax permit and collect sales tax.
  • Business Licenses and Permits: Your business may require additional licenses or permits depending on its nature and location. Check with local and state government offices for specific requirements.

Maintain Your Kansas LLC

Keep your LLC in good standing by adhering to ongoing requirements:

  • Annual Report: Kansas LLCs must file an annual report with the Secretary of State. This report is due on the 15th day of the fourth month following the LLC’s fiscal year-end. There is a $55 filing fee for the annual report.
  • Recordkeeping: Maintain meticulous records, including financial statements, member and manager details, and meeting minutes. Store these documents at a secure location.
  • Renewals of Licenses and Permits: Keep track of renewal dates for any licenses and permits and ensure they are renewed in a timely manner.
  • Compliance with Tax Requirements: File federal and state tax returns and pay any taxes due. Consult a tax professional for advice on tax planning and compliance.

Outsourcing Kansas LLC Creation

While forming a Kansas LLC on your own is doable, many entrepreneurs choose to outsource the process to professional services such as LegalZoom, Incfile, or ZenBusiness. These services can simplify the LLC formation process and save you time, allowing you to focus on growing your business.

Outsourcing LLC creation offers several benefits:

  • Expertise: Professional services are well-versed in state requirements and can help you avoid common pitfalls and errors.
  • Convenience: They will handle the paperwork, filings, and interactions with the state on your behalf, ensuring all necessary steps are completed.
  • Registered agent services: Many LLC formation services also offer registered agent services, providing you with a reliable and experienced registered agent for your LLC.
  • Ongoing support: Most services offer ongoing support and assistance with maintaining your LLC, including compliance reminders and annual report filing.

When choosing an LLC formation service, compare pricing, features, and customer reviews to find the best fit for your needs. Keep in mind that the cost of using a professional service will be in addition to the state filing fees.

Final Thoughts on How to Start an LLC in Kansas

Starting an LLC in Kansas involves several critical steps, from choosing a business name to ensuring compliance with state and federal regulations. Being diligent in fulfilling these requirements can pave the way for a thriving and compliant business in the Sunflower State. Always consider consulting legal and financial professionals to guide you through the formation and operation of your LLC.

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