Starting an LLC in Hawaii
A Hawaii LLC is a flexible business entity with strong liability protection and multiple management and taxation options. To form an LLC in Hawaii, you must file Articles of Organization with the Department of Commerce and Consumer Affairs and pay $51 in filing fees. Before you file your paperwork, you’ll need to choose a business name and appoint a registered agent. Starting an LLC in Hawaii typically takes between 3 and 10 business days, depending on how you file. Here, we’ll take you through the process of turning your business dream into an official LLC.
Ready to Start an LLC in Hawaii?Get Started
Name Your LLC
Designate a Registered Agent
Submit LLC Articles of Organization
Write an LLC Operating Agreement
Get an EIN
Open a Bank Account
Fund the LLC
File reports + taxes
1. Name Your Hawaii LLC
Before you commit to a business name, you need to make sure it meets Hawaii’s naming guidelines for LLCs, which you can find in HI Revised Stat. § 428-105. Simply put, your LLC name needs to:
- Contain the words “limited liability company” or the abbreviation “LLC” or “L.L.C.”
- Not already be taken by another Hawaii business.
Already have a business name? Check to see if it’s available.
Can I reserve a business name in Hawaii?
Yes. If you are not ready to officially form your LLC, you can reserve your business name for up to 120 days by filing an Application for Reservation of Name with the Department of Commerce and Consumer Affairs. There is a $10 filing fee.
What’s the difference between my LLC’s name and an assumed business name?
The company name on your Articles of Organization will be your LLC’s official name. If your LLC does business under another name, this is called an assumed business name (sometimes called a trade name or DBA). LLCs sometimes use an assumed business name when re-branding or launching a new product or service.
To use an assumed business name in Hawaii, you’ll need to submit an Application for Registration of Trade Name with the Department of Commerce and Consumer Affairs and pay the $50 filing fee.
Considering using an assumed business name? Learn How to Get a DBA.
2. Designate a Registered Agent
The next step is to appoint a Hawaii registered agent. Your registered agent will accept important legal mail, including potential lawsuits, on your business’s behalf. You can hire a registered agent service to do this job, appoint another individual, or do it yourself. Hawaii law requires LLCs to maintain a registered agent. Your registered agent’s name and address will be on the public record.
Learn why the pros use a registered agent service.
What does a registered agent do?
The responsibilities of Hawaii registered agents are outlined in HI Revised Stat. §425R-11. At the least, your registered agent must:
- Have a physical address in the state of Hawaii. P.O. boxes are not allowed.
- Keep regular business hours at this address.
- Accept legal notices on behalf of your business and forward them to you quickly.
Can you be your own registered agent in Hawaii?
Yes. As long as you’re able to maintain regular business hours to accept service of process in person, and you don’t mind having your name and address on the public record, you can be your own registered agent.
Though it’s possible, many business owners choose not to act as their own registered agent. Instead, they hire a registered agent service to protect their personal information and avoid the risk of missing a legal summons when on a trip or just running out to catch a few waves.
Can I change my registered agent after I start an LLC?
Yes. If you want to change your registered agent in Hawaii, you will need to complete a Statement of Change of Registered Agent and submit it to the Hawaii Department of Commerce and Consumer Affairs with the $25 filing fee.
3. Submit LLC Articles of Organization
When you’re ready to formally start your LLC, you’ll need to complete the Articles of Organization. You can submit the Articles via mail, email, or fax (if you miss the 90s). You can also use Hawaii’s online filing system or drop your Articles off in person.
Note: All of the information on this form will become part of the public record.
Here’s the information you’ll need to provide on the Articles of Organization:
- Company name. Needs to include “limited liability company,” “LLC,” or “L.L.C.”
- Business mailing address. You can use a P.O. box here if you want.
- Registered agent. The name of whoever will accept legal mail on behalf of your LLC.
- Registered agent address. Must be an actual street address in Hawaii, not a P.O. box.
- Organizer. The name and address of the person who completes your Articles. This doesn’t have to be a member of your LLC.
- Duration. If you want your LLC to dissolve on a certain date, you can put the date here. If you want your business to continue indefinitely, choose “At will.” Hint: Most LLCs choose “At will.”
- Management structure. Indicate if your LLC is member-managed or manager-managed.
- Member or manager info. The names and addresses of your members or managers, depending on who will run your LLC.
- Liability. Whether your members choose to be personally liable for the business’s debts and obligations. Since liability protection is one of the main perks of forming an LLC, most people check the first box, “Shall not be liable…”
- Signature. Your LLC Organizer signs here.
Ready to start your Hawaii LLC Articles of Organization? File for free with Northwest.
How can I keep my personal information off the public record?
Your best bet to keep your personal information off the public record is to keep it off this form altogether.
All of the information on your Articles of Organization goes onto the public record, so if you put your personal address on this form, it will be posted online where marketers and data brokers can easily find it. It will probably end up on one of those fake “public records” websites, too.
Hiring a registered agent who provides you a business address can help you and your members maintain some privacy when starting a business.
What’s the difference between a member-managed and manager-managed LLC?
A member-managed LLC is run collectively by all of its members (owners). In contrast, a manager-managed LLC is run by managers who are hired by the members. The people who manage your LLC will be able to enter into contracts, hire and fire employees, and open bank accounts, among other things.
For help with deciding which management structure will work for you, see our page on LLC Member Vs Manager.
How do I file the Hawaii Articles of Organization?
You can file the Hawaii Articles of Organization online, by email, mail, fax, or in person. The total fee is $51.
Hawaii Business Express
Dept. of Commerce and Consumer Affairs
Business Registration Division
P.O. Box 40
Honolulu, Hawaii 96810
Dept. of Commerce and Consumer Affairs
Business Registration Division
335 Merchant Street, Rm. 201
Honolulu, Hawaii 96813
4. Write an LLC Operating Agreement
An operating agreement is a legal contract between LLC members deciding how the business will function internally. It covers the important stuff, like how much each member invested, how you’ll distribute profits and losses, and even what you’ll do if things go south.
Operating agreements are internal documents, so you don’t need to file yours with the Hawaii Department of Commerce and Consumer Affairs. But if you don’t have one, your business will be governed by Hawaii’s default LLC statutes.
Check out our attorney-drafted Hawaii LLC Operating Agreement.
Does Hawaii require an LLC to have an operating agreement?
No, Hawaii law states that LLCs may enter into an operating agreement, not that they must. Even so, you shouldn’t consider this step optional. An operating agreement is usually required to open a business bank account. Plus, if your business ever faces a lawsuit, your operating agreement could be one of your best weapons for maintaining your limited liability status.
What should be included in an operating agreement?
A solid operating agreement plans for the major situations most LLCs face. This includes voting on amendments, settling disputes, and even dissolving the business if necessary. These are some of the topics operating agreements typically address:
- initial investments
- profits, losses, and distributions
- voting rights, decision-making powers, and management
- transfer of membership interest
HI Revised Stat. §428-103 puts some limitations on what an operating agreement can include. For example, your operating agreement can’t restrict the rights of people outside your LLC. But for the most part, you can include any rule in your operating agreement that doesn’t conflict with the law.
Does a single-member LLC need an operating agreement?
Yes, even a single-member LLC should adopt an operating agreement. Why? Most banks will want to see an operating agreement before you open a business bank account. Plus, if your single-member LLC is ever sued, your operating agreement can help you prove that your business follows clear rules and protocols, which could help you maintain your limited liability status.
5. Get and EIN
An Employer Identification Number (EIN) is a number given to a business by the IRS for tax identification. Think of it as a social security number for your business. It’s free to apply for an EIN directly from the IRS, online or by mail. Applying by mail takes longer, but you will need to do this if you don’t have a social security number.
Do I need an EIN for my Hawaii LLC?
Yes. Even though LLCs are technically only required to have an EIN if they hire employees or have corporate tax status, nearly all LLCs need an EIN to open a business bank account. It is also more secure to give out your EIN to business associates rather than your social security number.
Bored to tears? Hire us to form your LLC for you!
What To Do After Forming Your Hawaii LLC
6. Open a Bank Account
Your LLC needs its own bank account is to maintain its limited liability status. Why? Having limited liability status means that your business is a legal entity with assets and liability separate from the LLC members. If you mix business and personal finances, a court might decide your LLC is not a truly separate entity—and you could be held personally responsible for damages.
To open a business bank account, you’ll need to bring the following to the bank:
- Hawaii LLC Articles of Organization (a copy is fine)
- the LLC’s operating agreement
- the LLC’s EIN
- an LLC Resolution to Open a Bank Account (if your LLC has more than one member).
If your LLC has more than one member, use our LLC Resolution to Open a Bank Account.
7. Fund the LLC
When you’re forming a business, it helps to have some start-up cash. All of your members should make an initial investment in the LLC in exchange for their membership interest. Most of the time, members will simply write a check to the LLC bank account. However, you could let your members invest property or services to the business instead. Just remember that investments of property or services often lead to tax events.
What is LLC membership interest?
Membership interest is a member’s ownership stake in an LLC. Usually, the amount you invest in the LLC is directly correlated to your membership interest. So if four members invest $1,000 each, and a fifth member invests $6,000, the first four members would each have 10% membership interest, and the fifth member would have 60%. Typically, membership interest is proportional to voting power, so that fifth member would also hold decision-making power in the LLC.
8. File State Reports & Taxes
Hawaii LLCs are required to file an annual report each year and pay a $15 filing fee. The annual report is just an information update, making sure the Department of Commerce and Consumer Affairs has accurate contact and ownership information for your company.
Worried you’ll forget? Let us file your annual report for you.
When is the Hawaii Annual Report due?
In Hawaii, the annual report due date depends on when you formed your LLC. See the chart below to find out your business’s due date.
|Month of Business Formation||Annual Report Due Date|
|January 1st – March 31st||March 31st|
|April 1st – June 30th||June 30th|
|July 1st – September 30th||September 30th|
|October 1st – December 31st||December 31st|
How are Hawaii LLCs taxed?
The default tax status for Hawaii LLCs is pass-through taxation. This means that the LLC itself doesn’t pay taxes. Instead, the profits “pass through” the business to the owners, who report the profits as self-employment income on their personal tax returns. Hawaii LLC profits are subject to the federal self-employment tax rate (15.3%). Hawaii LLCs can also submit a form to the IRS to be taxed as an S-Corp or C-Corp.
Learn more about S-Corp Vs LLC tax designation.