How to Start an LLC in Kansas (May 2024 Update)
Kansas has emerged as one of the top states for business in recent years. In 2021, Kansas was ranked as having the most economic investment per capita in the entire United States! This influx of investment has led many entrepreneurs to consider starting a business in the Sunflower State. Many of these new businesses are forming as LLCs to gain legal protections and tax advantages. This article will walk through the key steps and requirements for starting an LLC in Kansas.
Before Filing Your Kansas LLC Paperwork
The first things you need to do before filing any official paperwork is choose your business name and designate a registered agent.
Reserving Your Business Name
It’s important to check that the preferred name for your Kansas LLC is available and distinguishable from other names in the state. You can search the Secretary of State’s database to see if your desired company name has already been taken. If it’s available, you can reserve the name for up to 120 days for a $30 fee. Reserving your name is not required, but it ensures no one else can claim it before you formally register your LLC.
Appointing a Registered Agent
All LLCs formed in Kansas must appoint a registered agent, also called a resident agent. This agent is authorized to accept legal documents and correspondence on behalf of your business. The registered agent must be a Kansas resident or business entity with an in-state physical address.
You can serve as your LLC’s registered agent yourself or designate another member. However, it often makes sense to hire a professional registered agent service to handle this responsibility. These services receive and scan your important documents so you don’t miss anything critical for your business.
Filing Your Kansas LLC Paperwork
To formally create your LLC, you must file Articles of Organization with the Secretary of State. Here are the key steps in this process:
Submitting Articles of Organization
The Kansas Articles of Organization form establishes your LLC. It includes details like your business name, registered agent, mailing address, owners/members, signature, and more. You can file the articles by mail with a $165 fee or complete the process online for $160.
Paying Your Filing Fees
In addition to the articles of organization, you must pay filing fees to the state. As mentioned above, this is $165 for mail filing or $160 for electronic filing. The state accepts check, money order, or online payment.
Taking Next Steps After Approval
Once your LLC has been officially approved in Kansas, there are a few other items you need to handle:
Making Corrections and Amendments
If you notice errors in your originally filed paperwork, you can submit a Certificate of Correction to the state. The filing fee is $35 for for-profit LLCs and $20 for nonprofits. You’ll also need to report changes to your registered agent or their address.
Filing Annual Reports to Maintain Good Standing
Kansas requires all LLCs to submit annual reports to provide updated details about the business. You can file these reports electronically for $50 per year or via mail for $55 per year. They are essential for keeping your LLC compliant.
Obtaining an Employer Identification Number (EIN)
Though not always needed, most LLCs require a federal EIN for tax and identification purposes. Even single-member LLCs often get an EIN instead of using the owner’s Social Security Number. Applying online takes just 15 minutes and is completely free.
Creating an Operating Agreement
While not mandated, having an operating agreement is highly recommended for Kansas LLCs. This document outlines financial structures, voting procedures, membership details, and more. It prevents confusion down the road.
Additional Considerations for Your LLC
Before opening for business, you’ll need to complete a few other tasks:
Understanding Business License and Permit Requirements
Depending on your industry, Kansas may require specific state or local licenses and permits. Be sure to research the requirements for your county and city. The Secretary of State website has helpful information based on your business activities.
Paying Taxes
As an LLC owner, you’ll need to pay Kansas income taxes on your share of the business’s profits. You may also need to collect and remit sales tax if selling taxable goods. If you have employees, you must pay withholding and unemployment insurance taxes.
Examining Your Business Insurance Options
Speak with an insurance broker about the optimal coverage for your Kansas LLC. Certain policies, like workers compensation and commercial auto insurance, are mandatory. But you may also benefit from general liability insurance, professional liability insurance, cyber insurance, and more.
Creating a Marketing Strategy
Lastly, create a cohesive brand identity and marketing plan to attract your ideal Kansas customers. Elements may include your color scheme, logo, signage, website, advertising channels, social media, and other platforms to reach local clients.
In Closing
Forming an LLC can be complicated, but it unlocks advantages like personal liability protection and pass-through taxation. As Kansas continues growing its vibrant business community, LLCs have become increasingly popular legal structures for entrepreneurs. We hope this guide gave you a head start on the process of starting your own Kansas LLC!