How to Start a Business in Kentucky
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 Corporation, LLC or DBA. Click here to learn more about business entities.
- A Corporation is a separate entity (provides liability protection to the owners) with a structure that includes shareholders, directors and officers. It’s 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 and provides very easy management (doesn’t require directors or officers) and taxation. The LLC 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.
- 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.
Step 2: Choose 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
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
Step 4: Obtain your Federal Employer Identification Number (FEIN or “EIN”)
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, it’s required). However, if you are a DBA and don’t obtain an EIN you will be required to use your Social Security Number on many documents so it’s highly recommended that you obtain the EIN to prevent identity theft. You can apply online with the IRS or via IRS Form SS-4.
TIP: We can obtain your EIN for you if you we form your company.
Ready to register a business in Kentucky?
- We specialize in registering businesses in Kentucky.
Step 5: Open Company Accounts: Bank and Credit Cards
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: Obtain Business 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 7: 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 Labor and Employment Departments
Kentucky Startup Resources
1. Small Business Administration (SBA) Kentucky District Office
2. SCORE Kentucky
3. Kentucky Legal Statutes
4. Kentucky Chambers 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
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
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.
