How to Start a Business and Form Your LLC in Kentucky

Kentucky Business Facts and Environment

Kentucky Business Facts

The Bluegrass state of Kentucky has many advantages that contribute to its friendly business climate. The state’s central location enables the distribution of materials and goods to a huge consumer and industrial global market. Kentucky’s colleges and universities are true partners in workforce development and Kentucky is a great place to raise a family with one of the lowest cost of living rates in the United States.

Major Companies Headquartered in Kentucky

Kentucky is the home of Humana, Papa John’s Pizza, Yum! Brands and Texas Roadhouse.

Startup Environment

Kentucky ranks third lowest in the nation for cost of doing business and the state offers free workforce recruiting and training of employees. Kentucky entrepreneurs also benefit from some of the lowest electricity costs in the nation, a high quality of life, short commute times, a central location, global shipping hubs and incentive programs such as the Kentucky Innovation Network offering startup and capitalization support and mentoring to help grow small businesses.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Choosing a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that the better). In Step 3 we’ll show you how to search for the name in Kentucky, but we highly recommend you do the following before searching Kentucky state databases:

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if your name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use Google at a fairly advanced level you can reasonably clear a name yourself.

Tip: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.

• Make sure your company name choice is available by searching the Kentucky Business Entity Database. NOTE: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

Restrictions on Kentucky Business Name & Business Purpose

• Review the Kentucky Guidelines to Name Availability.
• The name of every corporation must contain the word “Incorporated,” “Corporation,” “Limited,” “Company,” or the abbreviation “Inc.,” “Corp.”, “Ltd.,” “Co.” (or words or abbreviations of like import in another language).
• The name of every Kentucky limited liability company must contain the words “Limited Liability Company” or “Limited Company,” or the abbreviations “LLC,” or “LC.” The word ‘Limited may be abbreviated as “Ltd.” and the word “company” may be abbreviated as “Co.”.

Step 3: Register the Business

Each state has its own requirements for registering a business. Now that you’ve chosen a business structure and selected your business name, here are the requirements to register your business in Kentucky.

How to form an LLC in Kentucky

• File the “Articles of Organization” with the Kentucky Secretary of State.
• Once the articles are filed and approved you will need to properly organize the LLC (this also applies to “1-person LLCs”) by holding an “Organizational Meeting” which takes contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more.

How to Incorporate in Kentucky

• File the “Articles of Incorporation” with the Kentucky Secretary of State.
• Hold an “Organizational Meeting” to determine the percentage of ownership for each shareholder as well as resolve to do tasks like open a company bank account, pay back pre-incorporation expenses, elect S-Corporation status and more.
• Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.

Considerations when registering a Kentucky business

TIP: Check our order form to see how long Kentucky is currently taking to process regular and expedited orders.

• Hire a professional Registered Agent. Many people list their home or business address on the Articles of Organization or Incorporation. This can cause issues because it becomes public record (you’ll get lots of junk mail). A professional Registered Agent will provide their address and forward any important documents to you. It’s also convenient if you have to move (you don’t have to file forms or pay fees, just update your address with your agent).

How to File a DBA in Kentucky

• File a Certificate of Assumed Name with the Kentucky Secretary of State. This form must be mailed or delivered in person.  

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We can help you identify the necessary forms to obtain your business license.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection. Click here to view our preferred provider of business insurance online.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: Your Assumed Name in Kentucky is valid for 5 years (unless you change the company name or other information listed on the certificate) at which point you’ll need to renew it.

LLC: Kentucky LLCs must file an annual report every year by June 30.

Corporation: Kentucky corporations are required to file an annual report each year by June 30. LLCs and Corporations will pay a filing cost of $15.

Ready to start a business in Kentucky?

Our Kentucky filing services will help you get started as quickly as possible.

Important Kentucky Contacts

Kentucky Secretary of State

Business Services (for Corporation and LLC filings)
700 Capital Ave., Ste. 152
Frankfort, KY 40601
Phone: (502) 564-3490

Kentucky Taxation Departments

• Kentucky Department of Revenue

Kentucky Labor and Employment Departments

• Commonwealth of Kentucky Labor Cabinet

Kentucky Startup Resources

1. Small Business Administration (SBA) Kentucky District Office

• Kentucky District Office

2. SCORE Kentucky

• The Kentucky chapters of SCORE are part of a national nonprofit association and a resource partner with the U.S. Small Business Administration.  

3. Kentucky Legal Statutes

• 2014 Kentucky Revised Statutes CHAPTER 271B – BUSINESS CORPORATIONS – note this is the broad code that includes various other topics including business corporation.
• 2011 Kentucky Revised Statutes CHAPTER 275 LIMITED LIABILITY COMPANIES – the specific act that applies to Kentucky LLCs.

4. Kentucky Chambers of Commerce

• Kentucky Chamber of Commerce
• Southern Kentucky Chamber of Commerce
• Northern Kentucky Chamber of Commerce
• Frankfort Area Chamber of Commerce

5. Kentucky Business One Stop Business Portal

• The Kentucky Business One Stop is a new business outreach tool that provides faster, friendlier, more reliable, and cost-effective services to business customers through one interactive portal.

6. Angel.co Kentucky Startups

• A list of Kentucky Startups and Kentucky angel investors registered with Angel.co.

7. Kentucky Business News

• Louisville Business First
• Louisville Courier-Journal
• The Lane Report

8. Governor’s Office of Minority Empowerment

• The Governor’s Office of Minority Empowerment has the mission to work for the success of minorities throughout the Commonwealth of Kentucky by promoting self-sufficiency through education and training and ensuring equal access to jobs and economic development.

9. Kentucky Small Business Development Center

• The Kentucky Small Business Development Center has been assisting the Commonwealth’s small business community for more than 35 years.

10. U.S. Green Building Council (USGBC)  Kentucky

• USGBC Kentucky connects business owners, homeowners, educators, organizations, building design and construction teams and policy makers with sustainable approaches to today’s pressing energy, environmental and economic issues.