Forming an LLC in the state of Kansas can be both affordable and simple if you are aware of the specific details required.
Interested parties must register with the Kansas Secretary of State by filing the necessary forms, paying the necessary fees, and meeting all naming and formation requirements.
The following are the required specifications for forming a Kansas LLC:
Registration. File the articles of organization form with the Secretary of State. The form, along with the required fees, must include pertinent information such as:
- LLC name and mailing address
- Name and address of resident agent
- Tax closing month, chosen by you when you form the LLC
- Effective date
- Organizer’s name and dated signature
Forms and fees. LLC registrants are required to file articles of organization accompanied by the necessary filing fee of either $165 for paper forms or $160 for online forms. Fees can change, contact the Secretary of State for the most recent fees.
Timeline. Standard turnaround is two to three business days for processing of business forms and files. The online process, however, provides immediate filing.
Naming requirements. To best ensure that you receive approval for your preferred name, choose a name that is distinguishable from those of other LLCs and make certain to include specific required words. You may opt to have a preferred name checked for availability before filing your LLC formation documents with the Secretary of State.
Formation requirements. To form an LLC, a registrant must first file articles of organization with the Secretary of State.
Next, an LLC with more than one member is strongly advised to have a limited liability operating agreement among its members. This operating agreement contains the terms entered into by the members of the LLC and governs such critical items as the roles of each member, voting rights, who manages the LLC, how members are admitted or removed, dissolution of the LLC and procedures for amending the LLC operating agreement itself.
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Starting an LLC in Kansas
Knowing what an LLC is and whether or not it is a viable business structure for your company is highly advised before you begin the application process. At its basis, an LLC is a business structure that is privy to tax efficiencies, has flexible organization and provides limited liability for its members. There is no maximum number of members, which is considered one of the biggest benefits of an LLC, and members may include individuals, corporations, other LLCs and foreign entities. An LLC is also known as a ”hybrid” business structure in the sense that it brings together elements of a corporation and limited liability partnerships.
Follow these steps to begin the registration process with the Secretary of State:
1. Decide on a name for your business.
There is almost no limit on an LLC name as long as it ends with “Limited Liability Company,” “Limited Company,” or any variation of its abbreviation—e.g., LLC, L.L.C., LC, L.C. or Ltd. Co, following Kansas Statute 17-7673.
Names may be reserved up to 120 days with the Secretary of State by filing a name reservation request online or by mail. All requests must be accompanied by the non-refundable filing fee that is about $30.
A preferred name may be checked for availability on the Secretary of State’s website.
2. Assign an agent for service of process.
Resident agents are individuals or corporations authorized to do business in the state and that have permanent addresses in Kansas. Resident agents accept legal documents on behalf of the LLC and make sure its members are notified.
3. Get an Employer Identification Number (EIN) from the IRS.
If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
4. Create an operating agreement.
Although LLCs in Kansas are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Kansas recognizes limited liability company operating agreements as governing documents.
5. Make sure that your LLC, should it offer professional services, meets Kansas state legal requirements.
The state of Kansas regulates certain types of LLCs if their business is of a professional nature such as lawyers, doctors and accountants. Check with the Secretary of State for specific details about professional LLCs.
6. Familiarize yourself with the LLC’s continuing legal obligations, specifically annual reports.
Annual reports are filed on the 15th day of the fourth month following the LLC’s tax-closing month with the Secretary of State. Annual reports can be filed as early as January 1, can be done either online or by mail and should include the following information:
- Business Entity Identification Number, provided to you by the Secretary of State when you form the LLC.
- LLC name and mailing address
- Tax closing date
- Name and address of each member who owns at least 5% or more of the LLC capital
- Dated signature, name, and phone number of a member
Continuing legal obligations may include, but are not limited to, state taxes, annual reports and so on.
Filing an LLC and fees
Following are the forms and fees that are required when starting an LLC in Kansas:
1. Forms. Complete and submit an articles of organization form to the Kansas Secretary of State.
2. Fees. The processing fee for the articles of organization form is about $165 for paper forms and about $160 for forms filed online. This fee can be paid in cash, credit or debit card, money order or check. Fees can change, check with the Secretary of State for the most recent fees.
3. Limited liability company operating agreement. Although the LLC operating agreement will not be submitted to the Secretary of State, it is a good idea to have one in place for LLCs with more than one member. This agreement should be kept on file by the resident agent.
4. Taxes. LLCs in Kansas are treated as corporations, limited liability partnerships, or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your LLC, the tax responsibilities are as follows:
a. An LLC treated as a limited liability partnership. These LLCs are required to file Form 1065 (U.S. Return of Partnership Income) and to show equal distribution of profits, losses, and credit on a Schedule K-1 with the IRS.
b. An LLC treated as a C corporation for federal tax purposes. These LLCs are required to file Form 8832 (Entity Classification Election) and must opt to be taxed as a corporation. Next, they must file Form 1120 (U.S. Corporation Income Tax Return) with the IRS.
c. An LLC treated as an S corporation. These LLCs are required to file Form 1120S (U.S. Corporation Income Tax Return) accompanied by a report from each owner expressing the equal distribution of profits, losses and credit with the IRS.
d. An LLC treated as a sole proprietorship. These LLCs must report all business income and expenses via the sole proprietor’s personal income tax returns, Schedule C (Form 1040, Profit or Loss from Business) with the IRS.
Another point to note with regards to state taxes in Kansas is the fact that each LLC member is required to report income on his or her individual income tax forms and file a Partnership Return (Form K-65) with the Kansas Department of Revenue.
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