Get started on forming your LLC in Kansas by following these simple steps.
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Kansas LLC Basics
An LLC, or limited liability company, is a type of business entity that offers its owners personal liability protection while also providing certain tax advantages.3 min read If you’re looking to start a business in Kansas, you may be wondering if forming an LLC is the right decision for you. In this article, we’ll cover the basics of what you need to know about LLCs in Kansas.
Why Form an LLC in Kansas?
There are many reasons to form an LLC in Kansas. LLCs provide personal asset protection from business debts, help you save on taxes, and can make it easier to raise money for your business. An LLC also gives you the flexibility to choose how your business will be managed. You can elect to have a board of directors, have one member manage the LLC, or appoint a professional manager.
Kansas is a great state to form an LLC. The state offers low filing fees and has simple LLC formation requirements. And once you’ve formed your LLC, you’ll benefit from the state’s pro-business regulations and friendly tax laws.
The Benefits of Forming an LLC
There are many reasons to form a Limited Liability Company (LLC). LLCs combine the most advantageous aspects of sole proprietorships, partnerships, and corporations. The main advantages of forming an LLC are:
-Limited liability for the owners: In general, the personal assets of LLC owners are not at risk if the business is sued or cannot pay its debts. This limited liability protects the LLC owners from being held personally responsible for business debts.
-Easy to form and operate: An LLC can be formed by just filing a few documents with the state, and there are relatively few ongoing formalities required to keep an LLC in good standing.
-Pass-through taxation: An LLC does not have to pay taxes at the corporate level; instead, all profits and losses “pass through” to the individual LLC owners who report them on their personal tax returns. This pass-through taxation helps business owners save money by avoiding double taxation (once at the corporate level and again at the individual level).
The Disadvantages of Forming an LLC
There are a few potential disadvantages to forming an LLC in Kansas, including:
-LLCs are more expensive to set up and maintain than sole proprietorships and partnerships.
-LLCs offer less personal liability protection than corporations.
-LLCs may be subject to self-employment taxes.
How to Form an LLC in Kansas
You can form an LLC in Kansas by filing the Articles of Organization with the Secretary of State and paying the filing fee. You will need to provide a registered agent and a business address. You will also need to create an operating agreement.
Choose a Name for Your LLC
An LLC name must contain the words “limited liability company” or “limited company,” or the abbreviations “LLC,” “LC,” “L.L.C.” or “L.C.”
It can’t contain certain restricted words, like Bank, Attorney, University or Insurance.
The name must be distinguishable from the names of other business entities on the records of the Kansas Secretary of State.
You may reserve a name for 120 days by filing an Application for Reservation of Name with the Kansas Secretary of State.
File Articles of Organization
To form an LLC in Kansas, you must file Articles of Organization with the Secretary of State. The Articles of Organization must include:
-the LLC’s name and address
-the LLC’s registered agent and registered office
-the LLC’s purpose
-the names and addresses of the LLC’s organizers
-the effective date of the Articles of Organization
You can file the Articles of Organization online, by mail, or in person. The filing fee is $165.
Appoint a Registered Agent
A registered agent is a person or business that agrees to accept service of process and other legal documents on behalf of your LLC. The registered agent must have a physical address in Kansas and be available during normal business hours.
You can appoint an individual, such as yourself, or a business entity registered with the Kansas Secretary of State to act as your LLC’s registered agent.
If you choose an individual, he or she must sign a written statement consenting to serve as your LLC’s registered agent in Kansas.
If you choose a business entity to serve as your LLC’s registered agent, the entity must sign a written statement consenting to serve and must be authorized by its governing documents to accept service of process on your LLC’s behalf.
Create an Operating Agreement
An operating agreement is an internal document outlining the ownership and operation of your LLC. Although it’s not required by Kansas law, having an operating agreement can help you avoid disagreements among your LLC’s members and keep your business running smoothly.
Your LLC’s operating agreement should cover the following topics:
-The ownership structure of your LLC, including the percentage of ownership interests held by each member
-The rights and responsibilities of each LLC member
-How decisions will be made within the LLC
-How profits and losses will be allocated among the members
-What will happen if a member wants to leave the LLC or dies
Creating an operating agreement is an important step in forming your LLC. It can help you avoid disputes among your members and keep your business running smoothly.
Comply With Other Requirements
To complete the formation of your LLC, you must also:
-Appoint a registered agent
-File a certificate of formation with the Secretary of State
-Adopt an LLC operating agreement
-Get an employer identification number (EIN) from the IRS
-Publish a notice of intention (if required by your county)