Having a Kansas LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in Kansas.
On this page, you’ll learn about the following:
- How to Start an LLC in Kansas
- After Starting your Kansas LLC
- Kansas Foreign LLC
- Why an LLC in Kansas
- Top Businesses in Kansas
- Kansas LLC Formation Review
How to Start an LLC in Kansas
An LLC or a 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. This section gives you a step-by-step guide on how to start an LLC in Kansas.
Step 1: Decide a Name for Your LLC
Deciding on a business name is the first step to start an LLC. In Kansas, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the Kansas business naming requirements. Once you pass through them, you can successfully name your business.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face many issues by avoiding focus on choosing a business name for their LLC business formation filings.
Here are some of the major benefits of choosing the best LLC names.
- Helps establish a company’s presence in the market;
- Creates a new identity that will resemble your LLC;
- Allows ease in finishing your LLC registration process;
- You can get the EIN once you have your name registration certificate
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, Kansas. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in Kansas. The cost of a name reservation is $30 (online) and $25 (by mail).
Important Quick Links:
Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612-1594
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Step 2: Assign a Registered Agent in Kansas
A registered agent for service is your authorized person or business entity that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in Kansas. Choosing a Kansas registered agent for your LLC is required.
Make sure your registered agents are residents of Kansas. It could also be a business. Here are the recommended agents:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Kansas. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in Kansas
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Kansas Secretary of State, which costs $160-$165. You may file them online or by mail.
This Kansas Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Kansas, like if it is a member-managed or managers-managed. LLCs with employees need to check the Kansas government portal for the requirements before they hire employees.
Before you start filing your forms, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Kansas LLC will offer.
How to File Online
Go to the Secretary of State Online Service and create an account to access the form that you must fill out and submit. You will need this to file most of your forms online. Once you have your account, choose file Articles of Organization and fill out the form completely before submitting it. To know more about online filing, visit the Kansas Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your Kansas LLC registration, then you can download the Kansas Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature.
Mail To: Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612
Step 4: Create Your Kansas LLC 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 an LLC operating agreement Kansas does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve Kansas LLC later.
Step 5: Filing a Kansas LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your Kansas LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
After Starting your Kansas LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Kansas business permits & licenses
- Get liability for business and professional liability insurance with coverage for employees
- File a Kansas LLC annual report or biennial report
- Already existing LLCs that wish to operate in Kansas must register as Kansas foreign LLC.
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.
Kansas Foreign LLC
To register a Kansas foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, Kansas. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check Kansas Foreign LLC to know more about having a foreign LLC.
Why an LLC in Kansas
The primary reason for having an LLC in Kansas is its economic structure. However, around 45% contribution in GDP comes from agriculture in the state. But there are oil, gas, manufacturing units, and other industries that help in economic growth. An LLC in Kansas can receive various business funding options. Depending on the viable business structure, LLCs will receive the line of credit. Any business can opt for a business credit card to differentiate their personal and professional spending.
Along with a strong economic structure, there are some other long-lasting benefits of starting a Kansas LLC. In general, the processing of business forms, or any legal forms takes much lesser time. If you opt for a registered agent service then it would be even easier to in tax filing and other procedural steps.
Freedom in Distribution of Profit
Unlike a partnership, in Kansas, LLCs have the freedom to decide the distribution of profit among the partners. In the case of a partnership, the distribution is always 50-50. However, in setting up an LLC, it can be anything per the members’ contribution to the business.
Business Incentives & Tax Benefits
Like many other states in the United States, the Kansas government also provides incentives to small businesses. There are different types of incentives and tax credits one can expect while forming an LLC in Kansas. In the case of business incentives, LLCs can receive up to $500,000 as financial assistance. It can go up depending on the criteria and forms of business.
State Small Business Credit Initiatives
Under this program, the new businesses will get financial assistance starting from $25,000 to $500,000. Once your LLC gets qualified for the program, any amount between these will be provided to you.
Economic Development Grants
Under this program, an LLC can receive up to $750,000 and a minimum of $35,000. In this program, if the LLCs can create job opportunities in the state through their investment, then they can receive this assistance.
Foreign Trade Zones and Benefits
There are some specific locations in Kansas considered as Foreign Trade Zones. If any new business sets up an LLC in such zones, then ut can enjoy the benefits of FTZ. LLCs will get to operate in such areas without paying any duty. There will be a quota but no prominent tax to be paid for operating in FTZ.
Top Businesses in Kansas
When you want to form an LLC in Kansas, you should know what Kansas is known for? Top business industries that are established in the state of Kansas are discussed below.
It is noticed that the state of Kansas has huge farmland with extensive resources of minerals present in it. The state has topped in the production of minerals in which helium is the leading example. Also, the state is the leading producer of coal, in which the bituminous coal is present in the maximum amount.
Kansas is the state that is house to many advanced industries. The biggest one is the Aerospace and Transportation equipment which contributes around $6,802 million to the state economy. After that comes the Food and tobacco-based production that contributes around 4,602 million dollars which is enormous for Kansas state.
These are the leading contributions followed by various small and large-sized contributions from the manufacturing sector, including fabricated metal, motor vehicles, printing, and related support activities, etc.
It is noticed that there are more than 60,000 companies present in the state that are providing corporate and professional services. The reason behind such a vast number is people who are involved in professional courses that are producing more than 7.000 or more graduates in a year. The corporate services may include accounting, legal services, financial service providers, and much more.
The agriculture sector is becoming the most significant contributor of the state, which has also grown to a 4.8 million dollar export industry. The state is also number 1 in the production of wheat and sorghum, which is the staple food of most countries. Moreover, the dairy sector is also growing as a golden sector of the state with plenty of prospects.
Some of the small investment businesses in Kansas are:-
- Tutor services
- Food processing
- Animal healthcare business
Kansas LLC Formation Review
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Just to recap, here are the simple steps again when forming an LLC in Kansas. Click on the steps in this list to read the full detail.
- Name your Kansas 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 Kansas, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- 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.
If you are a resident of Kansas, 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 $160 (domestic LLC) and $165 (foreign LLC), LLC costs in Kansas include $50 for Annual Reports every year. LLCs are liable to pay sales tax of 6.5% every year
It takes no time to get a Kansas LLC if you file it online. For the mail filing, it takes 2 business days to get an LLC.
Every year all the LLC have to submit an Annual Report and pay $50 to the Kansas Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in Kansas 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, leave a comment below.