If you’re thinking about starting a business in Kansas, you may be wondering how to set up an LLC. Here’s a quick overview of the process.
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A limited liability company, or LLC, is a business structure that can combine the best aspects of a partnership and corporation. Like a partnership, an LLC has “pass-through” taxation, meaning that the business itself is not taxed on its profits. Like a corporation, an LLC offers limited liability protection to its owners, meaning that they are not personally liable for the debts and obligations of the LLC.
Setting up an LLC in Kansas is a relatively simple process. You’ll need to file articles of organization with the Kansas Secretary of State’s office and pay a filing fee. You’ll also need to create an operating agreement outlining the ownership and management structure of your LLC. Once you’ve done all of this, you’ll be ready to start doing business in Kansas!
The Benefits of an LLC
An LLC, or limited liability company, is a business structure that can combine the best of both the corporate and sole proprietorship worlds. While corporations exist as independent legal entities and offer their shareholders limited personal liability, they also come with a host of complexities, from meeting rigorous filing and reporting requirements to dealing with double taxation. LLCs, on the other hand, offer many of the same benefits as corporations—namely, limited personal liability for business debts and obligations—without all of the headaches. And while sole proprietorships offer simplicity and pass-through taxation (meaning profits are “passed through” to the owner’s personal tax return), they don’t offer any protection for the owner’s personal assets.
An LLC offers a happy medium: simple management structures, flexible profit distribution options, pass-through taxation (in most cases), and limited personal liability for business debts and obligations. If you’re doing business in Kansas, here’s how to set one up.
How to Set Up an LLC in Kansas
If you are planning on setting up an LLC in Kansas, there are a few things that you need to do in order to get started. First, you need to choose a name for your LLC. Once you have chosen a name, you need to register it with the Kansas Secretary of State. You will also need to create an Operating Agreement, which outlines the ownership and management structure of your LLC. After you have taken care of all of the paperwork, you will need to get a business license from the state of Kansas.
Choose a name for your LLC
Your LLC’s name must include “Limited Liability Company,” “L.L.C.,” “LLC,” or an abbreviation of one of these phrases. It may not include words that could confuse your LLC with a government agency or a nonprofit organization. You may reserve a name for 120 days by filing an Application for Reservation of Name form with the Kansas Secretary of State’s office.
File a Certificate of Formation
To form an LLC in Kansas, you must file a Certificate of Formation with the Kansas Secretary of State. The Certificate of Formation must include the following:
-The LLC’s name and address
-The names and addresses of the LLC’s organizers
-The LLC’s purpose
-The LLC’s duration
-Whether the LLC will be managed by members or managers
-The names and addresses of the LLC’s initial members or managers
You must also include a filing fee with your Certificate of Formation. The filing fee for an LLC in Kansas is $165.
Appoint a registered agent
One of the first steps in forming an LLC in Kansas is appointing a registered agent. A registered agent is a person or business entity that agrees to receive legal papers on behalf of your LLC. This could be served papers relating to a lawsuit or official notice from the state.
The LLC’s registered agent must have a physical street address in Kansas and be available during normal business hours. The LLC’s organizer may serve as the registered agent, but it’s usually best to appoint someone else so there’s always someone available to receive legal papers.
An out-of-state business that wants to form an LLC in Kansas must appoint a registered agent within the state. The same is true for an individual who lives outside of Kansas but wants to form an LLC in the state.
Create an operating agreement
An LLC’s operating agreement is a fundamental document that sets out the roles, responsibilities and relationships of the LLC’s owners, called members. An LLC operating agreement is not required by Kansas law, but is highly recommended. Without an operating agreement, your LLC will be governed by the state’s default rules for LLCs.
Creating an operating agreement gives you and other members of your LLC flexibility in how you want to run your business. You can tailor the agreement to fit the unique needs of your business and change it as your business grows and evolves. Plus, having an operating agreement can help you avoid misunderstandings and disagreements down the road.
Here are some key provisions that you may want to include in your LLC’s operating agreement:
-The name and address of your LLC
-The names and addresses of each member
-How profits and losses will be distributed among members
-Who will manage the LLC and how decisions will be made
-How new members can be admitted to the LLC
-What will happen if a member wants to leave the LLC or transfer their interest in the LLC
-What events will trigger dissolution of the LLC
Get an EIN
If you will have more than one member in your LLC, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). You can apply for an EIN online on the IRS website. You will need to have your Articles of Organization and your LLC Operating Agreement available when you apply.
Now that you know how to set up an LLC in Kansas, you can get started on your business today. Make sure to consult with an attorney or accountant to ensure that you are taking all of the necessary steps to protect your business and yourself.