Follow our free guide to form an LLC in Kansas
- Pros and Cons of Forming an LLC in Kansas
- Starting Your Kansas LLC
- Maintaining Your Kansas LLC
- Additional Kansas Resources
If you plan to start or are in the process of starting an LLC in Kansas, be prepared for multiple steps. This comprehensive guide is explained in two main phases, starting and maintaining, with in-depth instructions for every section of Kansas LLC formation.
Pros and Cons of Forming an LLC in Kansas
Low Cost of Living
Kansas falls slightly below the national average on the cost of living scale—overall 95/100. The state’s real estate prices are especially affordable with the average home price hitting really low at $130,000 versus the average U.S. price at $220,000.
Privacy for Owners
Kansas does not require all of the names of members/manager of an LLC to be included in the Articles of Organization. An organizer can sign and submit the paperwork in place of the members.
No Corporate/Franchise Taxes
Kansas does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.
Kansas’s economy has been struggling for the past few years; in fact, the state’s overall GDP dropped .1% from 2016 to 2017. Even though the numbers seemed to rebound toward the end of last year (up 2.3%), the growth is still way behind the national average.
Surcharge Corporate Tax
The corporate income tax rate for Kansas is fairly low at 4%, but the state hits business owners a second time before any personal income taxes with a 3% surcharge tax on all corporate income over $50,000.
Cost of Doing Business
- $165 filing fee / $55 annual report
- No corporate/franchise tax
Phase One: Starting Your Kansas LLC
The process of forming a Kansas LLC is not as complicated as you might think—you just need the right kind of help and a good set of instructions.
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Register for an EIN
Step 1: Name Your Kansas LLC
Finding a name for your Kansas LLC is the first step in building your new business. Before you begin making a list, see below for some of the regulations and restrictions concerning business names:
Business Name Guidelines
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educational or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted—it depends on the state. Additional paperwork may be required.
Deciding on a name of your new LLC’s website is also important—even if you are not planning to conduct business online, having an online presence is still important. You can check domain availability through hosting service sites.
Step 2: Establish Ownership
LLCs do not have owners, but rather members or managers, depending on the management structure of the business.
LLC Management Structures:
- Member-managed: All members participate in operating and making decisions for the LLC
- Manager-managed: An appointed manager oversees the daily operations of the LLC; the members play a more passive role.
Kansas LLC Member Guidelines:
Required Number of Members
There must be at least one member or manager to form an LLC in Kansas.
Member Disclosure Requirements
An organizer/authorized representative may sign and file the Articles of Organization in place of the LLC members.
LLC members in Kansas may be of any age.
There are no residency restrictions imposed on LLC members in Kansas.
Step 3: Find a Registered Agent in Kansas
All Kansas businesses must have an appointed registered agent. In fact, your LLC cannot be official without this position.
What is a registered agent?
A registered agent is either person or business who accepts all official mail (government letters and service of process notices) on behalf of the LLC.
Why do you need a registered agent?
Kansas law requires you to appoint a registered agent so that the state government has a consistent contact person for your LLC. The agent is lawfully expected to be available during standard business hours.
What are the main requirements for a registered agent?
- The registered agent must have a physical address — not a P.O. Box
- The registered agent must be available during business hours
Who can be a registered agent in Kansas?
- A state resident with a physical address in Kansas
- An LLC or corporation that is licensed to conduct business in Kansas
Can I be my own registered agent for my business?
State law will allow you to be your own registered agent as long as you adhere to the requirements.
Is being my own registered agent discouraged?
Since the registered agent’s name and address are publicly listed, LLC business owners who choose to be their own registered agent risk compromising their personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Kansas. Find more information here.
Step 4: File the Articles of Organization
The most important step in creating your Kansas LLC is filing the Articles of Organization with the Secretary of State.
What is the Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the Secretary of State to officially and legally form your LLC.
Why do I need the Articles of Organization?
Your Kansas LLC is not a legal business entity without this document. Consider the Articles of Organization as part of your LLC’s foundation.
What information is included in the Articles of Organization?
- The name and address of the LLC
- The name and location of the registered agent
- The name of the organizer filing the paperwork
- The tax closing month
- The effective date of the LLC
Additional Kansas Filing Requirements
Professional service businesses in Kansas are allowed to form a specific type of corporation or LLC known as a Professional Association (PA).
The following professions are allowed to form a PA:
- Physicians/Medical Professionals
- Professional Counselors and Psychologists
- Architects and Engineers
- Social Workers
- Real Estate Brokers
A few points to consider:
- The business name must end with “chartered” or “professional association.”
- All members of the PA must be licensed in the profession of the business.
- The PA is only allowed to provide services for which the business was formed.
- The members are still subject to whichever licensing boards govern the PA’s profession.
Step 5: Create an LLC Operating Agreement
Having an Operating Agreement for your Kansas LLC, while not required, is considered a necessity for any successful business.
What is an LLC Operating Agreement?
The LLC Operating Agreement is an in-house legal document that identifies the operating procedures of the business by defining the roles of the members and each person’s responsibilities and voting rights.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement defines the roles of the business’s members and provides direction for daily operations, which ensures stability and structure to the LLC and reduces future disputes.
Do I need to file the LLC Operating Agreement?
You do not need to file the Operating Agreement with the state — the document remains in-house.
What goes into an LLC Operating Agreement?
Every LLC Operating Agreement is different, but most documents typically include the following information:
- List of the members/managers and their roles
- Designation of authority in the LLC
- Initial capital contributions of the members
- Voting designations and percentages of the members
- Member transfer/addition rules and restrictions
- Distribution of profits
- Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Register for an EIN
The majority of businesses formed in Kansas must register for an EIN. There is very little your Kansas LLC can do without this ID.
What is an EIN?
The EIN (Employer Identification Number) is a nine-digit number that the Internal Revenue Service (IRS) assigns to your business for identification purposes. The EIN can also be called a Federal Tax ID and is similar to a personal Social Security number.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
- Any business with employees (even if owned by one person)
- Any business with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
- To hire and pay employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
In short, if you generate any revenue through your business and have/plan to have employees, you must register for an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN services for small businesses in Kansas. Find more information here.
Phase Two: Maintaining Your Kansas LLC
Now that you have finished the initial phase of setting up your Kansas LLC, the following steps help move your business forward and stay compliant.
- Step 1: Register for the necessary taxes in Kansas
- Step 2: Apply for the required permits and licenses
- Step 3: File the Annual Report for your LLC
- Step 4: Request a Certificate of Good Standing
Step 1: Register for Kansas State Taxes
Kansas is among the states that do not charge LLCs either a corporate or franchise tax. LLC members are still required to pay state and federal income taxes on their earnings.
You can also choose to have your LLC taxed as a corporation; if so you will be responsible for paying the corporate income tax rate on your business’s earnings. Corporations in Kansas must pay a flat 4% corporate income tax. There is also a 3% surcharge tax on corporate income over $50,000.
Other taxes your LLC may need to pay:
- Sales Tax at 6.5%
- Employee Withholding Tax
- Unemployment Tax
Step 2: Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Kansas can vary, depending on a number of variables:
- Location (city and county)
- Type of Business
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: File an Annual Report
All businesses formed in Kansas are required to file an annual report with the Secretary of State.
What is an annual report?
An annual report, which is also called a periodic report, is a legal form that is filed with the Secretary of State on a periodic basis that is designed to keep your business’s information current with the state.
What kind of information is in the annual report?
The information requested in the annual report is similar to what was listed in the Articles of Operation:
- The name and address of the business
- The name and address of the registered agent
- The names of the members
- The business’s EIN
Fees and Due Date
Due Date: the 15th day of the 4th month following the tax closing month
Implications of Late Filings: LLC dissolution after 90 days delinquent
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual report with us today.
Step 4: Request a Certificate of Good Standing
The last step before your Kansas LLC is ready for business—requesting a Certificate of Good Standing for your business.
What is a Certificate of Good Standing?
The Certificate of Good Standing is an official notification that is issued by the Secretary of State. It confirms that your business is legally formed and in compliance with all state regulations.
Why do I need a Certificate of Good Standing?
Many businesses and financial institutions want proof that new businesses are operating legally and in good standing with the state government. Some companies may not agree to any business dealings if your LLC does not have this certification.
Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Kansas LLC. Click here for more information.