If you have ever wondered how to set up a business entity in Kansas, what legal form to use, and what documents to file, read this review to find out more about all options and opportunities. We will provide you with step-by-step guidelines on registering an LLC in the state by all existing norms and requirements.
The Limited Liability Company is the most popular type of entity in the US. It is so widespread for many reasons, including its simplicity, management convenience, and, of course, the limited financial liability of its members. Furthermore, it is a very beneficial way of running your business if you want to experience less hassle concerning the local restrictions and protect your private property assets and investments.
If you choose an LLC as a legal form of your business establishment, you need to complete an Operating Agreement to set forth your company’s basic management rules. Although the Kansas government does not make it obligatory for local entrepreneurs to create such agreements (unlike some other states), you should do so to provide you with another layer of financial security and legal protection.
The operating contract is legally binding. It proves the company’s existence, outlines its policy, and determines its key features. Signing the LLC agreement is beneficial for both sides due to several reasons. First, thanks to the agreement, your private financial assets are distinguished from the company’s assets, so they cannot be used to cover the company’s debts. In case of a business failure or bankruptcy, you will not be supposed to pay from your wallet. Second, the agreement provides tax benefits for the LLC owners.
Different states have various conditions under which the companies should operate, but the essence is similar. Therefore, the steps to forming an LLC in any state are analogous. We will introduce them to you in the following sections.
We also suggest using our smart form-binding software at your service to construct the necessary Kansas LLC operating agreement form quickly and effortlessly.
The Kansas Statutes Annotated (Chapter 17, Article 76) regulate all limited liability company-related matters in the state. Simply put, the code determines an LLC, its objectives, membership, goodwill business practices, and standard operating procedures.
According to Sections 17-7663 of the given Chapter, a limited liability company is an entity developed under the Kansas laws and restrictions and has sole or multiple members. So, you can establish an LLC either by yourself or in partnership with other people. Please note that you need either a single-member operating agreement or a multi-member one to complete in the market.
Regardless of the membership, any LLC has some advantages over the other types of businesses. We have already covered them briefly above, but let us go into the details. A typical LLC obtains the following features:
● Limited Liability and Remedies. This feature lies in the very name of this establishment type. It means that every entity’s member invests a fixed percentage of money, receives a corresponding share, and is liable only for precisely the investment amount. The LLC owners do not have to take personal responsibility for their co-owners if the company wallows in debts or is subject to a lawsuit.
Note that any illegal activities are not the case for such protection. You can easily lose the member’s integrity if one of the key employees or owners commits an act of negligence.
● Tax Benefits. The taxation method used in LLCs is called pass-through taxation. All the LLC members have to do in this regard is submit their business indicators on personal income tax returns in time. Most LLC owners recognize that such taxation method is much more convenient than the one applied to big corporations in the state.
● Nature of Business Entity. Both individuals and legal entities can participate in an LLC. Besides, you can specialize in various products and services, except for the banking and insurance business.
Once you have learned what an LLC is and what laws regulate its activity, consider your next steps regarding business entity registration in the state of Kansas. We have prepared a step-by-step guide for you to understand the process better.
1. Give a Relevant Name to Your LLC
First, you need to come up with the right name for your company. It has to be available and distinguishable. Check whether your idea is not already used somewhere else in the state.
After choosing a proper company name, check whether the corresponding web-domain is also available.
Your company’s name should include an “LLC” variation to indicate its legal form and exclude any existing governmental agency resemblance. Also, you should use the terms “University” or “Attorney” only if you intend to deliver professional assistance and obtain a relevant license.
2. Obtain Certificate of Formation
Once you are done with the name, you need to file for the certificate of formation (also known as the Articles of Organization). The local Secretary of State is responsible for such filing and relevant proceedings. The brand’s official name, physical and mailing addresses, contact details, and operating field will be indicated in this paper.
You can submit your application form either via US mail or online. Online form compilation will cost you $160, while filing by US mail will cost $165. We strongly advise you to fill out the form online as it is way faster and more efficient. The state authorities tend to review online applications within 24 hours while approving a written form might sometimes take up to five working days.
3. Designate the Registered Agent
It is a crucial position in any LLC. This person is responsible for delivering official notices, filing papers, sending yearly tax and financial reports to the respective state authorities, and receiving and replying to important correspondence.
It is beneficial to create such a position and outsource a professional (or a team) to fulfill all these duties if you do not have enough time to manage all the government filings yourself. It can be either a resident or a business entity legally operating in Kansas. The subject Registered Agent must have a valid residential address in the state.
4. Fill Out the Operating Agreement
As you remember from the first section, the operating agreement is a necessary (though not compulsory) document in Kansas. Having such a record at your hand will save you many resources in the future. Do not forget that there are two agreement options available: either a single-member or a multi-member one.
5. Get the Federal Tax ID Number
Last but not least, you should obtain a Federal Employer Identification Number (FEIN). With the FEIN, you will be able to open bank accounts, pay federal and state taxes, and officially hire new employees.
You can refer to the IRS to issue one. They will provide you with Form SS-4 to do so. Most IRS forms are relatively complicated. Therefore, we strongly advise you to check out the relevant instructions and guidelines to fill out this particular form. You may search our website for the appropriate form templates, instructions, and other additional information.
6. Submit Yearly Reports
Every year, you should file LLC annual reports indicating the company’s budget and so on. To file a yearly report will cost you $55 by mail and $50 by email.