How to Start an LLC in Kansas in 2023 [Must Read]

Starting an LLC in Kansas is easy, you just need to follow the below steps.

It is easy to form a Kansas LLC, firstly, you are required to file the ARticles of Organization with the Kansas Secretary of State and this costs anywhere between $160-$165. The Articles of Organization to be filed with the Kansas Secretary of State can be filed either online or by mail.The articles of Organization is a legal document which officially creates your llc in Kansas.

You should follow the step by step below to form your llc in Kansas

Steps in Forming An LLC in Kansas

Name your Kansas LLC

After filing your Articles of organization with the Kansas Secretary of State, you will then need to name your LLC in Kansas. When you start an LLC, choosing a name will be the first and most important step when forming an LLC. You need to make sure that your name is in compliance with Kansas naming requirements and will be easily searchable for by future potential clients.

Here are some naming guidelines that you should abide by the Kansas LLC naming requirements.

Firstly, you must form an llc and include the phrase ”limited liability company” in your name. You are free to use any of its abbreviations either LLC or L.L.C. as well. The name of your Kansas llc also cannot include any words or phrases that might confuse your LLC with a government agency such as the State Department, the FBI or Treasury.

Finally, there are some restricted words in the forming of an L.L.C in Kansas such as “Bank”, “Attorney” and “University”. If you want to include these words into your Kansas llc, you will be required to produce additional paperwork and also include a licensed individual either a banker, lawyer or professor to be a part of your L.L.C. in Kansas

Another thing you should take into account when naming your Kansas LLC is to make sure that the name is actually available in Kansas, You will have to make sure that the name you want to use when you form your Kansas LLC is not already taken.

The State of Kansas website allows you to do a search of any names that are available when you form an L.L.C in Kansas.

As a last step, in this modern times you should make sure that an URL will be available with your business name. So we recommend that you do a check if there is a web domain available that will include your business name. This is a good step to take even if you do not plan to make a business website today, as you will be able to buy the URL so that others will not be able to obtain it.

After you have registered for a domain name, you should also consider to set up a professional email account eg. @yourcompany.com. Google has a G Suite feature which offers new businesses an email service as well as other tools such as word processing, spreadsheets and more.

Choosing a Resident Agent in Kansas

When you are ready to start a Kansas LLC, it is mandatory in Kansas to nominate a Kansas Resident Agent for your Kansas LLC. A resident agent can also be known as a Registered Agent in other states such as Iowa.

A Resident agent or registered agent can either be an individual or another business entity that is tasked with receiving the important legal documents related to the formation of your L.L.C. You can think of your resident agent or registered agent as the main point of contact with the secretary of state when you form a Kansa LLC

You may elect anyone or any business entity as your registered agent or resident agent as long as he/she is a resident of Kansas or a corporation such as a registered agent service that is authorized to perform business transactions in Kansas. In the state of Kansas, you are also allowed to elect an individual within your Kansas LLC as your registered agent or resident agent and this option includes yourself.

Filing Your Kansas LLC Articles of Organization

In order to officially register your Kansas LLC, you will need to file the articles of organization with the Secretary of State and this can be done by mail in the State of Kansas. This is also a good time to determine whether your LLC will be manager managed or member managed

Member Managed Structure

In a member-managed structure, members are typically engaged in the operations of the company and they all have a say in both daily operations as well as big-picture items and a vote is always required for all major business decisions.

A member-managed structure is also called decentralized management when forming an LLC because the administrative power for the Kansas LLC is dispersed among all its members rather than centralized in the hands of one or more managers.

Management by Managers

In a manager-managed LLC, members will recognize that allowing the administrative work of the Kansas LLC power is provided to one or more managers will be a more efficient way of handling the day-to-day affairs of the company. A manager-managed Kansas LLC does not require members to vote on any business decisions but will instead grant the managers the authority to make decisions.

This form of management is sometimes called “centralized management” because it consolidates the administrative power of the company in the hands of one or more managers.

You will be able to file your articles of organization either online or by mail. The cost is $160 for online filing and $165 for filing by mail of your articles of organization.

If you are filing by mail, you should mail it to the Secretary of State at the address:

Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612

Create your Kansas LLC Operating Agreement

It is not mandatory for you to get an LLC operating agreement if you are forming an LLC, however, it would prove to be a good practice if you do create one. This is because an LLC operating agreement is a legal document that provides the details and outlines the ownership and operating procedures of your Kansas L.L.C Company.

An LLC operating agreement is important because a comprehensive LLC operating agreement in place ensures that all business owners involved with the L.L.C are on the same page and this reduces future conflict.

Whether you are starting a single-member or even multi-member LLC, it is important that your LLC operating agreement actually covers most of the topics as below. It is important to note that some of the stipulations below might not bear any weight on a single-member LLC but will be important to include for the sake of formality.

Organization

When the L.L.C is formed, who its members are, how the ownership is divided. A limited liability company with a multi-member structure may utilize an equal ownership structure or even assign various members different “units’ of ownership

Capital Contributions

The amount of money that each member of the limited liability company has invested in the business and you should also take the time to establish an approach to raising any additional funds in the future

Changes on the structure of membership

This part of the operating agreement dictates how roles and ownership will be transferred in the event that a member leaves the LLC. It is important to layout the process whenever a member buys out or replaces another member in the operating agreement.

Voting and management

It is important to identify whether the Limited Liability Company will be managed by its members or an appointed manager and how many members will be allowed to go on voting for business matters.

As a general rule, every member has one vote but you could give some members more voting power than others.

Distributions

This part stipulates how the profits and losses of the limited liability company will be divided among the members. The most common way is to distribute profits evenly. As such, if you want to divide profits a different way, you should input the details in your operating agreement.

Dissolution

The final part of the operating agreement is dissolution, At some point, all of the members of your LLC decide that they no longer wish to conduct business, you should officially dissolve it. This part of the operating agreement should essentially outline the hypothetical process of dissolving your business so this is an important part of the operating agreement.

Getting an EIN for your Kansas LLC

You will need to get an EIN for your L.L.C when you form it in Kansas. As to what is an EIN? It stands for Employer Identification Number. It is an Employer Identification number is a nine-digit number that is assigned by the Internal Revenue Service that helps to identify any business in Kansas for Federal tax purposes.

You could treat the Employer Identification Number similar to a Social Security number for a business.

Your EIN can also be referred to as a Federal Employer Identification Number (FEIN) or also a Federal Tax Identification Number (FTIN). The main reason that you require an EIN is so that your llc will be able to open a business bank account, hire employees as well as filing and managing Federal as well as other state taxes.

In case you already have a sole proprietorship business in Kansas, a new EIN is required if you want to convert your Kansas sole proprietorship to an L.L.C. as this is required by the IRS. As to how you will get your EIN, you are able to get it from the IRS for free and it can be easily done through mail or online.

Important steps that you should take after Starting A LLC in Kansas

Separating your personal and business assets

After you have your LLC operating agreement set up in Kansas, you should take note to separate your personal and business assets. This is because if your personal and business accounts are mixed together, your personal assets will be liable if your Kansas LLC formation is ever sued or in litigation. In Business Law, this is referred to as piercing the corporate veil.

You will be able to protect your business company by performing the below steps.

Opening a business checking account

Firstly, you should open a business checking account in order to separate your personal assets from the assets of your company as this is an important step for personal asset protection. It would also help to make accounting and tax filing processes much easier.

Obtaining a business credit card for your Kansas LLC

By obtaining a business credit card for your Business in Kansas it would also help to separate personal expenses from your business expenses and all the while helping to build on your company’s credit history which can be useful in the long run when you wish to raise capital such as small business loans and obtaining any other form of credit.

Other steps that you should take to protect your corporate veil should include properly signing legal documents and documenting all company business.

Hiring a business accountant for your business in Kansas

For less experienced business owners getting a business accountant would definitely help a lot in running your Kansas L.L.C. This is because a business accountant would be able to assist the business owner by preventing overpayment of taxes while at the same time helping the L.L.C from avoiding any penalties, fines as well as any other costly tax errors.

A business accountant will also help to make other tasks such as bookkeeping and payroll processes easier by giving you more time to grow your business. They will also allow you to manage your business funding much more effectively by allowing you to discover any areas of unforeseen loss or extra profit which you would not have realised if you did not hire a business accountant.

Obtaining business insurance for your Kansas LLC

If you were to get business insurance for your Kansas L.L.C, this allows you to manage risks and focus on growing your Kansas LLC. There are three main types of business insurance.

Business insurance will allow you to manage risks and focus on growing your business. There are three main types of business insurance that you are able to get for your L.L.C. in Kansas

General Liability Insurance: This is a broad insurance policy that helps to protect your business from lawsuits and is the most general type of insurance that most small businesses usually get.

Professional Liability Insurance: Professional Liability Insurance is insurance provided for professional service providers such as consultants or accountants that cover malpractice and other business error claims.

Worker’s compensation Insurance: This type of insurance provides coverage for job-related illnesses, injuries or deaths for employees. In Kansas, some businesses with one or more employees are required by law to have Worker’s compensation insurance.

Creating a Website for Your LLC in Kansas

Creating a website is a great step to forming a legitimate LLC in Kansas. It should be important for every single business to have a website even if you think that your business is too small or in an offline industry. This is because if you do not have a website, you are definitely missing out on a large percentage of revenue and potential customers.

Some business owners may feel that creating a business website will be something hard as they do not have any website-building experience. This may have been a reasonable concern back in 2015, however, web technology has made large leaps in advancements over the past few years and it makes creating a website for small business owners much simpler.

Here are a couple of reasons why you should be building your own website.

Most legitimate businesses have websites. You should not take into account the size or industry of your business as it should not matter when it comes to getting your business online.

Most social business accounts such as Facebook pages or a LinkedIn business profile should not be a replacement for a business website that you yourself as the owner can control.

When creating your own website, you can use tools such as GoDaddy Website Builder that makes creating a basic website extremely simple. You do not need to hire a web developer or designer in order to create the website that you want.

Promoting Your LLC in Kansas

After setting up your LLC you should perform some marketing activities to let people out there know that you are in business. A press release would probably be one of the easiest and best ways in order to promote your business.

A press release is one of the most cost-effective ways to promote your business as they provide publicity, establish your brand presence on the web, improve your website’s search engine optimization (SEO), drive more customers to your website, are a one-time cost in terms of effort and money while also having long-lasting benefits.

Ensuring your LLC Kansas is compliant with state laws.

Kansas LLC permits and licenses

In order to keep your LLC compliant with federal, state and local government regulations, you will need to get permits, for example, restaurants are likely to get health permits, building permits etc.

Details of the business licenses and permits that you will need for your LLC differ from state to state so make sure you read the below carefully. The fees that will be levied on you will also vary depending on the kind of license you are looking to the brain.

Kansas LLC tax filing requirements

L.L.C. ‘s are usually required to report their income to the IRS every using two types of forms, a Form 1065 Partnership Return that most multi-member LLC‘s use or a Form 1040 Schedule C which will be used if you are a single member L.L.C.

File an annual report for your LLC

The state of Kansas requires LLC to file an annual report when you form an LLC. The annual report of your LLC can be done either via mail or online.

There will be a $50 fee for online filing and $55 by Mail and is non-refundable. The mail address for your annual report can be sent to

Kansas Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612

In Kansas, there is a due date to file your annual report which is due on the 15th day of the fourth month after your LLC’s tax closing month. For example, if your tax closing month is in December, then you will need to file your annual report by the 15th of April. For any late filings of your annual report, Kansas will dissolve the respective LLC.

Avoiding automatic Dissolution

LLCs in Kansas might face fines or even in the worst cases, automatic dissolution if they were to miss any LLC state filings. If this were to ever happen, an LLC owner may risk the loss of limited liability protection.

To prevent this from happening, a qualified registered agent service will be able to help you prevent this from happening by notifying you of any upcoming filing deadlines and also by submitting reports on your behalf.

Hiring workers

If you are planning to hire employees, you should stay compliant by referring to the below steps

Firstly, you need to verify that the new employees are certified to work in the US, and report employees as new hires to the secretary of state. You will then have to provide workers’ compensation insurance for employees and also withhold employee taxes.

Other important information In Starting An LLC in Kansas

Certificate of good standing

A Certificate of good standing in Kansas helps to verify that your LLC is legally formed and properly maintained. There are several instances that you might need to get a Certificate of good standing such as seeking funds from banks or other lenders, forming your business as a foreign LLC in another state or obtaining or renewing specific business licenses or permits.

A Certificate of good standing can be gotten through online or through phone or mail.

Dissolving an LLC or foreign LLC in Kansas

If in the future you do not wish to conduct business with your LLC or Foreign LLC, it is important to officially dissolve it to prevent any trouble related to tax liabilities or penalties. There are two main steps which are closing your business tax accounts and filing an Article of Dissolution.

Frequently Asked Questions (FAQs)

What is an LLC?

LLC stands for Limited Liability Company and is a simple business structure that is more flexible compared to a traditionally incorporated entity while still providing many of the benefits.

Am I required to get a DBA or Trade Name for my Business?

If you are forming an LLC in Kansas, most of the time you do not need to get a DBA, This is because the name of the LLC can be used as your company’s brand name and you will then be able to accept any payments such as checks under your company’s brand name.

You should only consider registering a DBA if you want to perform business under a name that is not your company’s brand name.

Can I be my own registered agent?

Yes, you or anyone else in your company can serve as the registered agent for your Kansas LLC. A registered agent from a service provider, however, will make it much easier as the registered agent is well aware of what needs to be done.

Will using a Registered Agent service over being my own registered agent worth it?

If you opt for a professional Registered Agent service, it can be a more affordable way to manage all government related filings for your LLC in Kansas. This is because, for most businesses, the advantages of using a professional registered agent service will definitely outweigh all the filing fee and annual costs.

What is the processing time to form my Kansas LLC?

Immediately after payment is received

What is the difference between a domestic Kansas LLC vs a foreign LLC?

An LLC will be referred to as a domestic LLC when it conducts its business in the home state that it was formed. When a person refers to an LLC, it is generally referred to as a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business into a neighbouring or another state.

Do I need to file the operating agreement with the secretary of state?

No, you do not, an operating agreement is an internal document that you should keep for future reference.

How do I get an EIN if I do not possess a social security number?

A social security number is not required if you want to get an EIN. All you need to do is simply fill out IRS Form SS-4 and leave section 7B blank, you can then contact the IRS at (267) 941-1099 in order to complete your application.

What tax structure should I select for my LLC formation?

When you get your EIN from the IRS, you will be informed of the different types of tax classification options that are available but most LLC’s in Kansas would opt for the default tax status. Some LLC’s in Kansas however have the option to reduce federal tax obligation by selecting the corporation (S Corp) status.

What is the minimum wage in Kansas?

The minimum wage in Kansas is $7.25 per hour

How often do I need to pay my employees?

The state of Kansas allows wages to be paid in any frequency as long as it is on a reliable schedule and happens once per month.

Do I have to obtain Certificate of Good Standing in Kansas?

Yes, a Certificate of Good Standing, also known as Certificate of Existence in Kansas acts as a verification document of your limited liability company has adhered all legal requirements, properly formed and maintained. There are various instances which require you to have a Certificate of Good Standing such as open a business account, applications of business licenses and permits and seeking funds from banks.

How to Dissolve an LLC in Kansas?

If you’re looking to shut down operation and dissolve your business entity, you must formally dissolve the business structure as per Articles of Dissolution. The failure to properly dissolve within the time-frame would result in potential legal implications, penalties and tax liabilities. The methods into dissolving your business entity could be carried via closing your business tax accounts or through filling the Articles of Dissolution.