Kansas LLC Formation: Form Your Kansas Corporation Today

Starting an LLC in Kansas requires filing articles of organization with the Office of the Secretary of State. The Office will supply you with a “Filing Instruction Sheet,” which provides details on filing your document, along with other required documents and information to form your LLC.

Starting an LLC in Kansas is easy; follow these simple steps:

STEP 1: Name your Kansas LLC

All Kansas LLC names must end with the letters “L.L.C.” or “LC” and may not contain the words “incorporated,” “company,” or any confusingly similar words.

Company/association name availability:

  • Before filing your articles of organization, you should make a business name search to be sure the name you want is available for use as an LLC. This can be done by checking with the Office of the Secretary of State’s Name Availability Inquiry page at www.kssos.org/Business_Services/name_inquiry.html.
  • A sample inquiry form is provided for easy reference on their website – enter the desired name into the box and hit “Submit Query.”
  • If no conflicts exist, you may proceed.

FAQ: Naming an LLC

Q. What are the required characteristics of my LLC name?

A. Your company’s legal name can be used to identify your business, but you may use a different name – provided it complies with the following guidelines:

  1. The name must end in “L.L.C.” or “LC” (for existing limited liability companies);
  2. The name must contain the words “incorporated,” “company,” or any confusingly similar words;
  3. The Secretary of State might allow your business to be named using fictitious or assumed business names authorized by statute (prohibited by K.S.A 17-5904).

NOTE: It is highly recommended that you perform a Naming an LLC search before filing for your new Kansas LLC. This free service is offered by the Secretary of State’s office at www.kssos.org/Business_Services/name_inquiry.html.

Q. Can I use my name as the LLC name?

A. No, this is not recommended. Suppose you choose to do so, and it is later discovered that other business entities (corporations, L.L.C.’s, etc.) possess your name. In that case, it could result in the cancellation of all entity documents.

The Secretary of State will notify you if such a conflict exists before filing your articles of organization. Suppose one or more conflicts exist after filing your document(s). In that case, they will be administratively dissolved by the Secretary’s office at a substantial cost to you – typically around $400 per business structure.

STEP 2: Choose a Resident Agent in Kansas

Every Kansas LLC must maintain a Resident Agent in the state of Kansas. The Resident Agent acts on behalf of the company to receive all legal documents, tax notifications, and other official information sent by the Secretary of State.

The Resident Agent is an individual (person) or business entity who agrees to accept service of process on behalf of your LLC when it does not have its designated agent for assistance. A physical street address must be provided for the resident agent since they must accept personal service in person during regular office hours.

FAQ: Nominating a Registered Agent

Q. How do I nominate a Resident Agent?

A. Your articles of organization must include the name, entire business or residential street address, and telephone number for your agent(s). A physical street address is required since all legal documents will be served on the Resident Agent in person during regular office hours (the Secretary of State will not accept P.O. Boxes as an address for this service).

If you already have a Kansas-registered agent used for other business entities, then it may be used to serve as your LLC’s Resident Agent – provided it meets the above requirements.

You can also select an alternate person/business entity to act as your Resident Agent if your first choice cannot meet these requirements – remember that an article of an organization must name the alternate if you wish for them to act as your Resident Agent.

Q. How do I change my Resident Agent?

A. Your articles of organization must include the name, entire business or residential street address, and telephone number for your agent(s). If you wish to update the information listed about your Resident Agent, then submit a new filing with the updated information using one of our forms (please note that there is no fee associated with this service).

You are also permitted to remove the current resident agent at any time by submitting a Kansas LLC Statement of Change form

STEP 3: File Your Kansas LLC Articles of Organization

You may now file your LLC documents (using our forms) for approval by the Secretary of State’s office. Please visit http://www.kssos.org/Business_Services/llc_forms.html to view all available Kansas LLC articles or use one of these forms:

  • Reports of Organization (LLC) Short Form – (no info on organizer(s), members, managers, partners; the name must be at least four words long; address requirements only apply if a manager is being named in the filing)
  • Articles of Organization (LLC) – A form that includes additional information about both organizer(s), member(s); more details on each individual required by the state; the name can be fewer than four words but cannot resemble another LLC’s name; address requirements must be met for all residences listed).

FAQ: Filing LLC Documents

Q. How long does it take to file my documents?

A. Once you have completed your forms and paid the filing fees ( http://www.kssos.org/Business_Services/fees.html ), we will review them for any errors or inconsistencies; we do not file LLC documents on a regular basis and this additional review adds 1-3 business days onto the processing time of your order.

The Secretary of State’s office can now take up to 10 business days after approval to process your articles, so please remember to plan accordingly – they are often able to complete their work sooner than 10 business days, but there is no guarantee as many external factors can influence this timeframe (such as extreme volume at their office).

As per Kansas state law, official copies of approved articles are always sent by first-class mail to the LLC’s resident agent within 10 business days after the filing date.

Q. How long does it take for my articles to be effective?

A. Your articles are effective once they have been processed and mailed to you by the Secretary of State’s office. If you need your LLC formed quickly, then please select one of our expedited services ( http://www.bizzylinksolutions.com/services ) – this will allow us to file your documents immediately with the state but not mail them until later (giving us time to process your order).

STEP 4: Create Your Kansas LLC Operating Agreement

The state of Kansas does not require an LLC to file an operating agreement, but it is highly recommended that one is created for your LLC.

An operating agreement is a written contract between the members or managers of an LLC describing how they will work together and what rights and limitations they possess. While you may create this document on your own, we strongly recommend consulting with an attorney if you wish to establish a more structured agreement.

FAQ: Creating an Operating Agreement

Q. Is it necessary to create an operating agreement?

A. While an LLC can be run without an operating agreement, this may result in unfair treatment of the members or managers if disputes ever arise. You are not required by Kansas state law to have a written operating agreement but your LLC will enjoy greater flexibility and strength by establishing one early on.

Q. What is included in a typical LLC Operating Agreement?

A. While no two States have identical rules, every generally follows the same basic guidelines for creating agreements between its members or managers:

  • Organizational Details Description of Members or Managers Membership Interests Capital Contributions Management Rights/Responsibilities Distributions (Profits & Losses)
  • Transferability (Membership Transfers)
  • Relationship to Federal Tax Laws (Forming an S or C Corp)
  • Incorporating Your LLC With Other States

Q. Where can I find a sample Operating Agreement?

A. There is no one-size-fits-all agreement, as each State’s laws and regulations for LLCs vary greatly; we recommend consulting with an attorney if you wish to establish a more structured agreement.

Most online legal sites will have a few generic models available which can be customized by your attorney – they typically cost around $150 per page to produce but offer the most thorough guidance on this important document.

STEP 5: Get an EIN from the IRS

In order for your new LLC to operate with full power in the United States, it must obtain an Employer Identification Number (EIN) from the Kansas Department of Internal Revenue Service. An EIN is a nine-digit number in the format 00-0000000, which allows the IRS to keep track of your business.

You should never apply for your EIN through a website or over the phone, as these are often fraudulent applications designed by criminals to steal personal information.

FAQ: Getting a Kansas EIN

Q. How do I obtain an EIN?

A. Your LLC can obtain its EIN from the IRS in one of four ways:

  1. Faxing or Mailing Form SS-4 (Application for Employer Identification Number) to their headquarters at 410 Maple Avenue, 2nd Floor, Covington, KY 41011
  2. Asking your bank if they can provide you with a number (most banks have this information readily available)
  3. Calling 1-800-829-4933 and following the prompts for applying over the phone
  4. Applying through https://www.irs.gov/businesses/small-businesses-self-employed/employer-identification-number-(ein)-online – only use this site if there is no other option available.

Pros and cons of Kansas LLC

Pros:

  • Kansas LLCs are easy to maintain and operate.
  • It is not necessary for an annual meeting or minutes to be written.
  • The Kansas Secretary of State does not require you to post any bonds in order to form an LLC in the state of Kansas.
  • The state of Kansas only requires a yearly fee of $50 to report your LLC’s name reservation
  • It takes about 1 week for a new Kansas LLC to receive its EIN from the IRS.

Cons:

  • Kansas does not have any specific regulations regarding what must be included in an LLC Operating Agreement.
  • If you wish to establish a formal Operating Agreement, do so before forming an LLC in Kansas.
  • You can change how many members are in your LLC, or add/remove members at any time provided that it is done prior to filing the articles of organization with the Secretary of State.

How much does it cost to form an LLC in Kansas?

A new LLC will be required to pay $50 annually for filing its name reservation. The official filing fee with the Secretary of State is $125; however, if you are doing online filings (recommended), there will also be an additional $5 charge.

How long does it take to form an LLC in Kansas?

After your Articles of Organization have been executed and filed with the Secretary of State, the creation process should take about 2 weeks. In order for this time period to pass quickly, have all necessary member signatures on hand before submitting your application to the state.

Considering Using an LLC Formation Service?

There are many advantages to forming your LLC online rather than doing it yourself – one of which being convenience. If you have never seen the process for registering an LLC, it can seem somewhat daunting at first.

The forms are long and difficult to understand, much less having to take care of all the other legal/registration details that need attention before filing with the state. If you are unsure whether you can complete this by yourself or not, consider using a service that will do it for you.

Separate Your Personal and Business Assets.

By forming your LLC, you are creating a separate legal entity for yourself. This means that if the business is sued, or does not have enough money to pay its debts, it is possible that creditors can go after your personal assets (such as your house) to collect money.

When an LLC “forms,” it must reserve its name with the state of Kansas; this serves as written evidence of its existence and prevents any other businesses from reserving the same name on the same day.

Your LLC will always use either an EIN or an ITIN (for foreign-owned companies) for tax purposes, but be aware that it will still need to file separate Federal Tax Returns each year using Form 1065 (if there are multiple owners), or Form the 1120S (if there is only one owner).

1. Opening a business checking account:

If you use a business checking account different from your personal account, it can help keep track of your expenses and profits. Consider opening an account at the same bank where you plan to apply for any necessary loans later on; ask about special banking packages which might offer lower interest rates.

2. Getting a business credit card:

Obtaining a business credit card (or multiple cards, if you will have employees who need to use them) can help make it easier to track expenses. Depending on the company, this may be something you do later on after you have established a steady cash flow from your other sources of income.

3. Hiring an accountant:

If at all possible, hire an accountant familiar with small businesses and their unique needs. This can save time and money that would otherwise be wasted by using a “one-size-fits-all” tax filing service that does not cater specifically to people in your position.

Remember that while hiring an outside party for tax filing services is usually cheaper than actually going through the process yourself, the benefit to doing so is that you will receive a customized service that takes into account your particular business needs.

Get Business Insurance for Your Kansas LLC.

If your business liability exposure is greater than $1 million, you will be required to carry an insurance policy. The more exposure your business has, the more coverage you will need; in fact, some companies are advised to purchase “umbrella” policies that cover them up to $5 million or even $10 million per claim (or event).

By forming an LLC, you are shielded from personal liability – meaning that if someone sues your company and wins a judgment against it, they cannot seek damages directly from you.

However, if the judgment is over the deductible amount of your underlying insurance policy(ies), then you could potentially be responsible for paying the difference between what was awarded by the court and how much money your particular policy covers.

Workers compensation

When hiring employees, you must also comply with all applicable state and federal laws regarding worker’s compensation insurance. This is a form of insurance that covers medical expenses and lost wages for employees injured while performing their duties.

Income Tax Liability Protection

In the event that your LLC becomes insolvent or unable to pay its debts, creditors cannot take action against you personally if there are no assets in the LLC available for payment.

For example, if your company owns an apartment building valued at $200,000 and it defaults on a loan from a bank for $90,000, the bank would be able to foreclose on the property because they have a secured interest in it – but they could not legally recoup any additional money from you because there are no other assets to be sold.

Create Your Business Website

According to a recent study by the U.S. Chamber of Commerce, small businesses with an online presence generate as much as 64% more revenue annually than those without one.

A website can be very simple or quite elaborate; it can include pictures and text describing your products and services, as well as contact information. It also helps to have a basic social media strategy so that you can keep in touch with customers on Facebook, Twitter, LinkedIn, etc.

Send Out a Press Release.

After you have officially launched your LLC, it is a good idea to send out a press release to local media outlets letting them know that your business is now open for business and inviting the public to come and check you out. This can help you attract new customers as well as garner some free publicity – which could go a long way towards branding yourself as an expert in your field.

Kansas LLC Permits and Licenses

Once you have established your LLC, you will need to obtain any required business permits or licenses in order for it to operate. For example, if your business is going to be providing professional services such as legal, medical, or financial advice, you may be required by state law to obtain a license from the appropriate regulatory organization.

Make sure that you are familiar with all federal, state, and local guidelines which apply to your line of work before attempting to launch your business.

Kansas Business Taxes

Once you have completed the formation process, your LLC will be required to file annual reports with the state. This is usually done through their Secretary of State’s office.

Failure to properly maintain all required filings can result in criminal sanctions against members and managers of the LLC for operating an illegal or “phantom” business. So if you are seriously considering forming a new LLC, it is important that you are aware of any yearly filing requirements which may apply to it.

Kansas Employer Taxes

As an employer, you are typically responsible for withholding employee income taxes (Medicare and Social Security), Federal Unemployment Tax (FUTA), matching federal and state unemployment insurance premiums, worker’s compensation premiums, applicable state disability insurance premiums, and any other required payroll deductions.

Your employees should also be able to use the online tax withholding calculator or paycheck stubs to determine how much money is being withheld from their paychecks in order to cover these obligations.

Kansas Corporation Taxes

If your LLC operates as a regular corporation – which means that it has filed all of the necessary paperwork to become recognized as such by the IRS – it will have to file an annual income tax return just like any other type of business entity that carries out commercial activities.

This is a relatively easy process for corporations, and usually simple enough that you can do it yourself with the help of an accountant to answer any questions.

Kansas Sales Tax Registration

If your LLC operates as a regular corporation – which means that it has filed all of the necessary paperwork to become recognized as such by the IRS – it will have to file an annual income tax return just like any other type of business entity that carries out commercial activities.

This is a relatively easy process for corporations, and usually simple enough that you can do it yourself with the help of an accountant to answer any questions.

Federal LLC Tax Requirements

If your LLC does not fall into the category of a “disregarded entity” for federal income tax purposes – which means that it has filed all of the necessary paperwork to become recognized as such by the IRS and is treated as a separate legal entity from its owner(s) for tax purposes – then, like any other type of business, it will have to file an annual income tax return.

This is a relatively easy process for corporations, and usually simple enough that you can do it yourself with the help of an accountant to answer any questions.

File Your LLC Annual Report and Pay your Fees

Finally, if you have decided to form a Kansas Limited Liability Company (LLC) for your entity, you will need to pay the annual fee and file the appropriate form with the state government within a certain number of months after formation (and prior to dissolution).

Failure to do so can result in additional fees and penalties assessed against the LLC as well as its members. As such, it is important that you familiarize yourself with all federal, state, and local guidelines which apply to your line of work before attempting to launch your business.

Hiring Employees in Kansas

When you first start out, you may choose to hire no one else but yourself. However, as your company gets off the ground and begins to generate a healthy income you should consider employing other individuals. This is an important decision since federal employment laws are very strict when it comes to hiring employees for work done in your state.

There are certain guidelines that must be adhered to before doing so, including:

  • compliance with workers’ compensation requirements
  • withholding taxes on salaries paid to all employees, etc.

When you are ready to begin this process of adding new faces to your team, there are several steps that must be taken by both yourself and the hired workers – including filing I-9 forms with the state government and making certain deductions from each employee’s paycheck.

How to Build Business Credit?

Are you an entrepreneur trying to secure business financing, but lacking the strong credit history that most lenders expect? Building business credit can be challenging for entrepreneurs who are new to the game. If you’re wondering how to build business credit, here are a few basic guidelines that will help you get started:

  1. Ensure that there is a clear line of communication between yourself and your customers.
  2. Make it a practice to respond in a timely fashion whenever someone contacts you with questions or concerns.
  3. You should also file all necessary tax documents such as sales tax returns on time and pay any taxes due by their respective due dates – this may improve your chances of getting paid faster and increase the likelihood of establishing good payment habits with suppliers and other parties from whom you buy inventory or services.
  4. Set up a separate business bank account if you don’t already have one.
  5. Identify the account as belonging to your company and make it clear to all banking personnel that this is an account for business purposes only; the funds in this account should not be used for personal expenses.
  6. If you can, pay yourself (or whoever manages your finances) a monthly salary instead of accumulating profits in the business’s checking or savings accounts, which will make it easier to maintain a positive cash flow.

Register as a Foreign LLC in Kansas

If you operate your business outside of Kansas but conduct business within the state you will need to file for foreign limited liability company status. This type of legal status is referred to as qualifying to do business in another jurisdiction and has certain rights and privileges associated with it.

How to Obtain a Certificate of Good Standing in Kansas?

In the event that you need to establish a business entity in another state and the proposed LLC was once formed in Kansas (but has since been dissolved or otherwise terminated), you will need to file for what is known as a Certificate of Good Standing.

This document verifies that your company is in good standing with the state and confirms certain rights and privileges which apply to all LLCs registered within this state such as the ability to conduct business, open bank accounts, etc.

Conclusion

In order to maintain a successful business, you must first take care of your obligations as a state-registered LLC.

Ensure that all relevant forms and documents have been filed within the required timeframes, monitor your credit rating, and keep an eye on records that may need to be revised or updated if certain conditions arise (for example, failure to properly dissolve your company when the time comes).

If you are familiar with how to proceed in each step of the registration process, starting and running an LLC in Kansas should be both easy and headache-free.

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