Kansas is a state in the United States Midwest region. It is one of America’s most prosperous nations. Now that you want to start your company in Kansas, the best way to do so is to form an LLC. LLCs, or Limited Liability Companies, are ideal for start-ups and small businesses because they have insurance and other benefits.
What’s the point of creating a limited liability company?
LLC has many advantages that outweigh any perceived drawbacks. Let’s take a look at some of the benefits:
- The LLC members are shielded from personal responsibility. If any of the other members are involved in criminal activity, they will be spared, and their assets will be removed from the LLC’s assets. Creditors cannot pursue the owners’ personal properties, such as their home, vehicle, savings accounts, and so on, to repay the company’s debts.
- Individuals, companies, alliances, and trusts can all be members of an LLC, and there is no limit on how many they can have.
- Members can elect a management group or manage the LLC themselves, which allows for flexibility in management.
- The federal government does not raise income taxes from LLCs. It’s a pass-through company, so any benefit or loss is passed on to the owners, who report it on their tax returns. The LLC may also elect to be taxed as a corporation, in which case the tax rules change.
- LLCs have fewer state-imposed enforcement provisions.
Step 1: Give your LLC a name.
The LLC’s first and most significant component is its name. Since its name knows your company, you must choose a distinctive, memorable, and easy-to-remember name. In Kansas, however, you must obey specific naming guidelines that apply to all LLCs. When choosing a name for your LLC, keep these guidelines in mind.
Your company’s name should be distinct and original.
The title should stand out and should not be used by any other corporation, enterprise, or limited liability company in Kansas. Often search the Kansas SOS website for available company names.
As previously said, it should be distinct enough not to be confused with another company’s name.
- Limited Liability Company or the abbreviations LLC must be present in the name.
- Your LLC’s name should not be confusingly similar to a federal or Kansas department, such as the Kansas police or the FBI.
- There should be no reference to a federal or state agency or entity in the term.
- The word Olympic should not be used since it is a registered trademark of the International Olympic Committee.
- The name of the LLC should not mean that it is being used for unlawful purposes.
Perhaps your selected name is identical to that of another company, and you add some modifications to differentiate it. Still, you cannot claim that your chosen name is distinct from the business name based on the following factors:
- Using business, corporation, Incorporated, Limited, Incorporation, Ltd., Corp., Co., LLC, and other suffixes
- The use of both plural and singular word patterns
- The articles A, An, and The are used in the sentence.
- Abbreviations, icons, typefaces, punctuation, fonts, and other symbols are used.
Now that you’ve considered all the factors, you’ve come up with a name for your dream company. You’ve double-checked the availability, followed all of the rules, and are now ready to go. However, for some reason, registering your company and making it legal is taking longer than anticipated. You’re concerned that anyone else could file under your preferred name. You have the choice of reserving your chosen company’s name.
Reservation of a name
For 120 days, you can reserve the company’s name. You can put a hold on your name online via the Kansas Business Center. You can also mail a $35 name reservation form to the following address:
Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 SW 10th Ave.
Topeka, Kansas 66612-1594
Reservation of a name is voluntary. There’s no reason to wait if the company is set to launch. However, if you are sure that your company will take some time to get up and running, you can still make a reservation.
Step 2: Select a Resident Agent
The LLC owner must appoint a Kansas Resident Agent. The resident agent is recognized as a Registered agent in other states, and every company must have a resident agent who is formally named. Accepting documentation and correspondence from the Kansas Secretary of State on your behalf is one of the agent’s services. The LLC must have a Kansas Resident Agent at all times, according to the rules.
You’ll need someone to manage both state and legal correspondence when your LLC takes shape. One of the essential parts of your LLC is the resident agent. However, keep in mind that having an agent is a requirement, not an option. Per Kansas law, any limited liability company (LLC) must have a resident agent. The agent’s responsibilities are outlined in the Articles of Organization, stating that a resident agent is an individual or agency permitted to handle the process. The resident officers govern litigation, upkeep, taxation, and a variety of other issues.
There are, however, specific guidelines to follow before hiring a resident agent. They are as follows:
- If the resident agent is an individual, he or she must live in Kansas.
- If the Resident agent is a corporation, it must be licensed to operate in Kansas.
- A physical street address in Kansas is expected of the resident agent. APO Box will not suffice.
- To sign for any messages, the Resident Agent must be present during regular working hours.
Let’s take a look at what a resident agent does in a nutshell.
- The agent is in charge of Kansas Secretary of State communications.
- The agents are in charge of serving the legal papers.
- The resident agent’s job is to handle official Kansas and federal government records, form filings, and information requests.
We now understand what a resident agent is and what their responsibilities are. For the efficient application, you must include your resident agent’s name and street address in your LLC’s Articles of Organization. That will seal the deal.
Who would you appoint as your resident agent?
The response is simple: someone at least 18 years old and has a physical address in Kansas, whether that person is a friend, family member, or yourself, can be a resident agent of your LLC.
You may also employ a resident agent company to support you. So you have two choices: a person or a corporation.
A person as a resident agent
As previously mentioned, your company’s resident agent may be anyone. Third parties, such as judges and prosecutors, may also be hired. You can also go for your friends, relatives, and loved ones. They must meet two requirements: they must have a street address in Kansas and be 18 years of age or over. That concludes our discussion. There is no requirement for specialized training or certification.
Service of a Resident Agent
You can employ a resident agent service provider or an LLC creation service to make your work more available. These services will handle your company’s formation and provide you with free legal advice. If you don’t want to pay for these services, you can utilize a nationwide registered agent program to take care of your resident agent’s responsibilities. Ensure that your LLC does not operate without an agent at any time. Working without a resident agent may result in administrative failure.
Step 3: Submit the Articles of Organization
This is the final step in the creation of your LLC. To make your LLC legal, you must file Articles of Organization with the Secretary of State. It would be best to decide whether your LLC is managed by the manager or by the members.
You have the option of filing Articles of Organization on your own, hiring an attorney-at-law, or using a professional LLC filing service. Now that you’ve reserved the name and appointed a resident agent, it’s time to take the next step to make it official. Your company is granted permission to start doing business in Kansas after filing the Articles of Organization. There are four ways to file the Articles of Organization: online, fax, mail, and hand-delivery. You are free to use any form you choose but remember that each one has its own processing time and filing fee.
Now that you’ve agreed to file the Articles of Organization, you must download and mail the form from the official website. Alternatively, you should go to the Kansas KanAccess website and fill out the form there. The online version’s price is $160, and the fee for the mail version is $165.
If you want to file by mail, submit the completed form along with the filing fee to:
Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 SW 10th Avenue
Topeka, KS 66612
The processing is completed instantly in the online form, and it takes about two days in the mailing method.
Step 4: Build an Operating Agreement
If you want to describe how your LLC operates and who owns it, you’ll need to draft an LLC operating agreement. Although the government does not need this document, it is essential if you want your LLC to run smoothly. If a disagreement arises, this paper may be used as proof. Your LLC’s bylaws are called an operating agreement. The agreement specifies how the company will operate, how members will be selected, members’ rights and responsibilities, and several other important details.
This information can seem insignificant, but they are crucial in running a successful company. It is preferable to have complete clarification in – line.
The following items must be included in the operating agreement:
Each member’s duties are listed below.
- What form would be used to pass or terminate the current member?
- How are new members accepted?
- What proportion of the income will be distributed among the members?
This is not an exclusive list; you can add more details if necessary. You can cover more land, which is always preferable. However, make sure that whatever you introduce does not break Kansas business law.
Step 5: Obtain an Employer Identification Number (EIN)
Every Kansas limited liability company (LLC) must have its Employer Identification Number (EIN). The Internal Revenue Service releases the EIN. The business owners use the Employer Identification Number to file taxes, pay workers, open a bank account, and more.
What is the purpose of the EIN? The EIN must be used to:
- Open a bank account for your company.
- Employees to hire and pay
- Taxes, both federal and state, must be regulated.
If you already have an EIN for your proprietorship, you’ll need to apply for a new one if you want to convert to an LLC. There are three ways to obtain an EIN: online, fax, and mail. You can select any of the options that are appropriate for you.
You will complete the online process between 7 am and 10 pm EST Monday to Friday. The online form is the quickest of the three. It’s fast and straightforward, and you’ll get your EIN right away after completing the digital format.
The application can also be faxed. To do so, you must first download and complete Form SS-4 before faxing it to (855) 641-6935. This approach is the second fastest, and it takes four working days to obtain your EIN.
Postal mail is the third and final form. You must also download and complete Form SS-4. After that, mail it to the following address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
This process is the slow-moving of all three, and the processing time generally takes up to four weeks.
Step 6: Business Permits and Licenses in Kansas
After filing the Articles of Organization, the company is legally recognized, but depending on the type of business you conduct, you can need additional permits and licenses. If you want to open a grocery store, you’ll need to get permission from the Agriculture department first. You’ll also need a Food Service License if you’re going to open a small café next to your store. If you’re interested in learning more about these licenses, visit Kansas’ extensive list of business licenses.
In addition to the state approvals, certain cities and counties have their requirements, so consult with your local government. Some licenses may require a one-time payment, while others may require continuing payments. These permits and licenses vary based on the following factors: A health permit is necessary if your company is in the food industry. The location of your Kansas LLC affects the permits and licenses. – state, county, and the city can have their own set of regulations.
Step 7: Taxes and Income Reporting Taxes are the seventh phase.
Yes, we’re going to discuss taxes. Before going on, make sure you have all of the necessary details to ensure that your LLC operates appropriately and is in a good position with the state. It is illegal to stop paying taxes, and if you do, you will face serious consequences. So, before commencing your company, make sure you have a plan in place to meet the following requirements:
Federal Income Taxes
We already know that LLCs have a flexible tax structure. They are exempt from paying income taxes to the central government. It is a pass-through of the owners’ earnings. When filing their income tax returns, the owners must account for all losses and gains. You have the choice of taxing your LLC like a company. You’d have to pay a corporate tax return in that scenario.
State and Local Taxes
They’re close to the federal system in that business owners must report their profits and losses on their tax returns.
Similarly, if your company is taxed as a corporation, you’ll have to pay a different corporation tax. There is no privilege tax or a franchise tax on businesses in Kansas, which is a positive thing and something you don’t have to be concerned with. One less thing to be involved with!
You may be required to file a few state taxes related to your company. On the other hand, these extra taxes are primarily based on the form of company you conduct. If you sell clothing or products, you must file Sales tax and Use tax. You must pay unemployment insurance taxes and withholding tax if your LLC has employees.
And you must register with the Labor Department for the unemployment insurance tax. The next thing is that a local tax could be imposed on several towns, counties, or municipalities. So, you must contact your local government based on your site to obtain additional information.
Filing Annual report
After your LLC has started, this step takes place. Even after your LLC starts, you must take care of the details. You must remember that you have an annual report to present every year. Your responsibility is to ensure the annual report is produced by 15 April, following the tax year’s end.
The annual report may be submitted online, or the hard copy may be sent. The online entries’ cost is $50. For the paper-copy filings, the price is $55. The online application is processed instantly and takes about 3 to 5 working days to submit your paper. The Kansas income tax return is presented at the same time as the Annual Report. Keep in mind that the report should not be missed because your company would be dissolved legally if you failed to do so within 90 days of the due date.
Have we finished now? Oh, good, no. After the formation of your LLC, there are few things you must take care of. You’ve come so far, just a little more patient, and you’re going to be off on the road. It’s good always to be knowledgeable, which helps in the longer term.
Steps after the LLC formation
These are the steps you should take when your LLC is on the ground.
Divide your business and your assets
The first step is to ensure that you do not mix your assets because your assets are not affected if something happens in business.
Open the checking account for your business: open a bank account for your business as it helps you receive cheques on behalf of your business. And your personal and business finances are also kept separate by a business bank account.
Obtain a business credit card: Obtaining a business credit card after establishing a business account is a wise decision. You will have all your business costs on the Credit Card to track your expenses instantly.
Get Business Insurance: While an LLC covers your assets from the company’s liability, it does not guarantee that your business will be protected from damages. You are covered in that situation. It’s always a good idea to protect your business. Accidents, deaths, and other risks will be covered by insurance.
Hire a Chartered accountant: When it comes to filing taxes for your new company, you will need assistance. But don’t put it off until the last minute. Create an appointment with an accountant to make the trip smoother. An accountant will provide tax advice, tell you how to save money on taxes, and suggest business deductions.
Build a website for your company: Any business’s ultimate goal is to grow. You’ll also need a solid customer base to expand. Customers must be drawn to the services and goods. As a result, you must have a website so that new customers can look at it and be attracted to your company. It should be a part of the overall marketing plan.
Now, we’ve reached the end of this guide. Our journey ends here, but yours is still to begin. Follow all the steps presented in this guide, and you will reach closer to your dreams. Soon, you will be a proud owner of your company and in no time will be making great deals. So, set out and go on a journey of fulfilling your dreams.