Think about your LLC a year from now: raking in profits and taking Kansas by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Kansas.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Kansas startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Kansas
Optional: LLC Name Reservation Fee
- $30 for online forms and $35 for paper submissions
Required: Articles of Organization Fee
- $160 for online forms, $165 for mailed documents, and $185 for faxed ones
Overall Kansas LLC Formation Costs
LLC Name Reservation Fee
In Kansas, reserving a name isn’t mandatory for LLC formation. If you’re ready to start your business, you can jump right to the Articles of Organization without requesting a reservation, and that will officially register your name. But if you won’t be starting your business for a while and want to protect your unique name, name reservation a nice option. Online reservations cost $30 and paper forms cost $35; this gives you exclusive rights to that name for 120 days.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Kansas LLC. Without the Articles of Organization, the state won’t recognize your business as official. You can file online for $160, by mail for $165, or by fax for $185. It’s somewhat expensive, but the good news is that this is the only time you’ll need to file this form and pay this fee. As long as your submission is accepted, you won’t have to worry about the Articles of Organization again.
Depending on the type and location of your business, you may need to obtain certain professional licenses before commencing business in Kansas. For example, CPAs need to seek licensure through the Board of Accountancy, and Real Estate Brokers through the Real Estate Commission. Specific cities and/or counties may also require their own licenses. Take a look at the Secretary of State’s Business Licenses/Permits page and check with your local government to find out which licenses your LLC might need.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Resident Agent Service
Appointing a resident agent is an important part of your LLC formation process. Your resident agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Kansas business law. In short, you need an agent you can trust.
While you can be the resident agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A resident agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all resident agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to resident agent services, Northwest also handles LLC formation — and they’ll include a resident agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer, and there are so many lawyers out there that finding the right one might seem like a tall order. Take advantage of sites like Avvo, which supply lawyer databases where you can find rates, locations, areas of expertise, and more, all in one place. Then you can compare and evaluate Kansas business attorneys to find the perfect fit for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Kansas. Foreign qualification is essentially gaining permission to do business in another state. In Kansas, this means filing an “Application for Registration” instead of the Articles of Organization.
All foreign business entities are required to foreign qualify in Kansas, or they could incur some pretty severe penalties. Avoid them by downloading, completing, and filing the Application for Registration. Like the Articles of Organization, it will cost you a one-time fee of $165.
LLC Annual Fees
The Kansas Secretary of State needs a way to keep its business records up-to-date, and they do this by requiring business entities operating in-state to file an Annual Report every year. When planning your yearly budget, make sure to include $55 for this report ($50 for online submissions), which is due by April 15.
When it comes to federal taxes, LLCs are, by default, classified as “pass-through” entities, so they don’t have to file separate corporate tax returns. Instead, income and/or losses are reported by the owners’ individual returns. And Kansas doesn’t impose “franchise” or “privilege” taxes like some states do.
But this doesn’t mean that your LLC is completely off the hook for taxation. There are specific taxes that your business may need to pay, depending on the circumstances. Businesses that sell merchandise, for example, must pay a sales tax, and business with employees must pay a withholding tax. For these types of taxes, you will need to submit a Business Tax Application either online or on paper. See the Kansas Department of Revenue website for more information.
Lastly, if you’ve set your LLC up to be taxed as a corporation, you will need to file a corporate tax return and pay the 4% corporate income tax.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Miss an Annual Report, resident agent change, or another required filing, and your LLC will earn “delinquent” status. This means that it has lost its good standing with the state. You can get back in the state’s good graces by submitting all outstanding forms and/or fees. However, if your LLC maintains a delinquent status for 90 days, it can be administratively dissolved.
And that’s not all. A delinquent business cannot obtain a Certificate of Good Standing for as long as it has outstanding filings/fees. In most cases, if you don’t have a Certificate of Good Standing, you cannot foreign qualify in most other states, apply for business loans, or make new business filings. In short, staying ahead of your required filings will save you a lot of trouble in the future.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Kansas.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Reports and resident agent updates – so your business doesn’t fall out of good standing.