How to Start a Corporation in Kentucky
To start a Kentucky corporation, you must file Articles of Incorporation with the Secretary of State and pay a $50 minimum filing fee. While this filing creates your business, it’s really just the first step to launching your Kentucky corporation. The complete steps to incorporating in the Bluegrass State are as follows:
- File Kentucky Articles of Incorporation
- Pay the Kentucky Secretary of State $50 (minimum)
- Download and print a copy of your approved Articles
- Get a federal tax ID (EIN) for the corporation
- Create Kentucky corporate bylaws
- Take these documents to the bank and get a Kentucky corporate bank account
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Kentucky Articles of Incorporation free download. When you're done filling out the form, submit it to your state.
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5 Day Kentucky Corporation For $275 Total
How to File Kentucky Articles of IncorporationTo form a Kentucky corporation, you file the Articles of Incorporation in the following steps:
What is the Cost of a Kentucky Corporation?
At least $50. The base filing fee for Articles of Incorporation is $40, but Kentucky also has an Organization Tax Fee that must be paid at the same time. The fee is $10 for up to 1,000 shares. Want to authorize more than 1,000 shares? You’ll need to contact the Office of the Secretary of State for the total filing fee due.
Hire Northwest to form your Kentucky corporation and your total, out-the-door cost is $275 for up to 1,000 shares. This includes state filing fees, a full year of registered agent service, and all the corporate forms you need to open a business bank account.
How Much Does a Corporation in Kentucky Cost Each Year?
$15. Every year, your Kentucky corporation is required to submit a Kentucky Annual Report, which comes with a $15 filing fee.Get Started
What is a Kentucky Annual Report?
Your Kentucky Annual Report is a form you submit to the Secretary of State each year to update your corporation’s ownership information and confirm contact information. (Note that you can’t actually update contact info in your report. If you need to update your principal address, registered agent or registered agent address, you’ll have to file a separate Statement of Change, which comes with its own $10 fee.) The Kentucky Annual Report and $15 fee are due June 30th each year. Fail to file? After 60 days, the state will dissolve your corporation.
At Northwest, we help ensure our clients stay in compliance and avoid frustrating penalties. We’ll send you reminders to file your Annual Report. Prefer to cross this task off your “to do” list entirely? Hire us to file your Annual Report for your Kentucky corporation for just $115.Get Started
What are the Taxes for a Kentucky Corporation?
Kentucky corporations pay both a corporate net income tax and a special state tax called the Limited Liability Entity Tax (LLET). The Kentucky corporate net income tax rates are:
4%: $0 to $50,000
5%: $50,001 to $100,000
6%: over $100,000
The LLET is a gross receipts tax that applies to businesses with limited liability, like corporations and LLCs. The LLET rate is $950 for every $1 million in gross receipts or $7,500 for every $1 million in gross profits, whichever is lower. There’s a minimum LLET of $175.
The state sales tax is a flat 6%. While most states allow cities and counties to tack on additional sales taxes, this isn’t the case for Kentucky—customers will pay 6% at the register, no matter whether they’re in Covington or Bowling Green.
Is a Registered Agent Required for a Kentucky Corporation?
Absolutely. The Commonwealth of Kentucky requires you to appoint and maintain a Kentucky registered agent. This doesn’t necessarily mean you have to hire someone. You could be your own registered agent. The fancy title, however, comes with a couple major drawbacks. If you list your own address on public documents like your Articles of Incorporation, that information becomes part of the permanent public record of your Kentucky corporation. You’ll lose out on privacy and gain a mountain of junk mail—not the best trade off. Also, odds are you won’t be in the office all the time. You’re supposed to be available during business hours, but you’ll have meetings, appointments or just time off. And when you upgrade to a new office? You’ll be stuck paying a $10 fee each time you submit a Statement of Change to the Kentucky Secretary of State.
A wiser investment? Hire Northwest as your registered agent. We’ll be ready and waiting so you don’t have to be. Go ahead and take off for a few days. (Have you seen Mammoth Cave National Park? It’s amazing.) We’ll scan and send you any service of process the same day. Plus, our address will go on your public documents and stay the same as your Kentucky corporation grows and changes.Get Started
Kentucky Corporation Versus Kentucky LLC:
Generally speaking, costs are pretty similar for Kentucky corporations and LLCs. For Articles, the base filing fee is the same: $40. Corporations do have the additional Organization Tax Fee, which typically translates to an extra ten bucks. Other Secretary of State filings are the same for both LLCs and corporations. For example, Annual Reports for both entities are $15.
Many people think that forming an LLC means no entity-level taxes, but that’s not the case—at least not in Kentucky. Both corporations and LLCs are subject to Kentucky’s LLET, a tax on businesses with limited liability. Obligations for other state taxes, like corporate net income tax, depend more on your tax election than your entity type. For example, a corporation that chose the S election wouldn’t pay a corporate income tax (but an LLC that chose to be taxed as a regular corporation would).
Taxes and fees aside, corporations and LLCs each have qualities that can benefit different business goals. Corporations are popular for large businesses (or those that hope to scale quickly). Their familiar, formal structure makes managing a big business easier, and the flexibility of stocks also helps with attracting investors and raising capital. LLCs, on the other hand, are common for small businesses that value simplicity. Interested in an LLC? Here’s information on starting an LLC in Kentucky.
Do I Need a Tax ID Number (EIN) for a Kentucky Corporation?
Yes, your Kentucky corporation must get an EIN—the IRS requires corporations to have these tax IDs for federal tax filings. You’ll also need your EIN for local taxes, permits, licenses, and registrations. For example, if you’re doing business in Louisville, you’re required to provide your EIN when registering for a Louisville Metro occupational tax account number.
You can get your EIN directly from the IRS for no fee. Or, skip the extra paperwork and hire Northwest to get your EIN for you. Just add on EIN service during checkout when you sign up for our formation services.
Does a Kentucky Corporation Need a Business License?
The Commonwealth of Kentucky doesn’t have a general, statewide business license, but many cities and counties have their own business licensing requirements. These requirements are often closely tied to local occupational taxes, a popular form of tax in Kentucky. Occupational taxes vary, but can be imposed on earnings, receipts or profits. These taxes are a staple across the state, from Ashland to Mayfield.
To give you an idea, just in Jefferson County alone, Jeffersontown, Louisville, Shively, St. Matthews and West Buechel all impose an occupational tax. Before engaging in any business in the area, businesses have to register for the occupational tax by submitting a business license application or a business registration form. For instance, if you plan to engage in any business in Louisville, your corporation will need to submit a business registration application for a tax account number. You’ll use this number when you file your annual occupational tax. Louisville’s occupational tax rate is currently 2.2% of income earned within the area.
Kentucky Corporation Articles of Incorporation Requirements
Your name must include “Corporation,” “Incorporated,” “Company,” “Limited,” or an abbreviation of one of these words. Tip: Most corporations keep it short and sweet with “Corp” or “Inc.”
List the number of shares you’d like to create. You must create at least one share. Tip: Want multiple classes or series of shares? You won’t be able to use the paper form; you’ll have to draft your own Articles so you can specify the rights and limitations for each class or series.
This Kentucky street address is where your registered agent will be available to accept service of process. This address, like all the information in your Articles, will become part of the permanent public record of your Kentucky corporation. Tip: Hire Northwest and our Kentucky address will go here.
Your registered agent can either be a business (but not your own) or an individual Kentucky resident (such as yourself). Tip: Wouldn’t it be wild if we didn’t recommend Northwest at this point?
This is the address where you’ll receive official mail (besides legal notifications—those go to your registered agent). Tip: Want to avoid checking and updating multiple addresses? When you hire Northwest as your registered agent, you can use our Kentucky address as your principal office address.
Your incorporator signs and submits your Kentucky Articles of Incorporation. Your incorporator doesn’t have to be a director, officer, or anyone in your corporation—just someone you authorize to sign off on your Articles. An incorporator has to include their name and mailing address. Tip: We’ll be your incorporator when you hire Northwest.
Skip this section if you want your Kentucky corporation to begin upon filing. Prefer to push off the start date of your business a bit (maybe you’re currently at the tail end of a tax period)? You can list an effective date up to 90 days in the future. Tip: Most corporations skip this section.