How to Start an LLC in Kentucky in 2026: Filing, the Annual Report and the $175 Entity Tax

Kentucky has one of the lowest LLC filing fees in the country. You pay $40 to file articles of organization, and the yearly report to the Secretary of State costs only $15. What many first-time owners miss is the limited liability entity tax, a separate state tax with a $175 minimum that every Kentucky LLC pays each year, including one-person companies. This guide walks through the whole process in order: the name rules, the registered agent, filing the articles, the paperwork that follows, the annual report, the entity tax, and a worked budget for the first two years. Every fee was checked against the Kentucky Secretary of State's forms and fee schedule and the Kentucky Revised Statutes in October 2026.

Quick answer

To start an LLC in Kentucky, file articles of organization with the Kentucky Secretary of State (online through FastTrack or on paper) and pay $40. Name a registered agent at a Kentucky street address. Then file the $15 annual report between January 1 and June 30 each year from the year after you form, and pay the limited liability entity tax, at least $175 a year.

• The name must include "limited liability company", "limited company", "LLC", "LC" or "Ltd. Co."

• A registered agent with a Kentucky street address is required and must consent in writing

• Annual report: $15, due by June 30

• LLET: $175 minimum a year, even for single-member LLCs

• Veteran-owned businesses pay no fee for the articles

What a Kentucky LLC is and who should form one

A Kentucky limited liability company is formed under Chapter 275 of the Kentucky Revised Statutes, with the filing mechanics in Chapter 14A, which covers every kind of business entity. The core benefit is the same as in other states: the company's debts, contracts and lawsuits belong to the company, so a supplier or customer with a claim against the business generally cannot reach your house or your personal savings. That shield holds up only if you run the LLC as a genuinely separate business, with its own bank account, contracts signed in its own name and records of money moving in and out.

The Division of Business Filings in the Office of the Secretary of State keeps the register. You search names, file articles, file annual reports and order certificates through its online system, called FastTrack, or by paper sent to Frankfort. The Kentucky Business One Stop portal sits alongside it and links the Secretary of State filing to tax registration with the Department of Revenue.

For federal tax, a one-owner LLC is a disregarded entity and a multi-owner LLC is a partnership unless you elect to be taxed as a corporation. Kentucky follows that classification for income tax but not for the entity tax: every LLC, including a single-member one, is a "limited liability pass-through entity" and owes the limited liability entity tax. That one rule is the biggest difference between Kentucky and most of its neighbours, and it is covered in detail below.

An LLC suits most small Kentucky businesses: contractors, consultants, online sellers, salons, food trucks, landlords, farms and equine businesses. You do not need to live in Kentucky or be a US citizen to own one. Licensed professionals can form a professional LLC, but check with the licensing board first, since some boards add their own registration on top. If the business really operates in another state, forming in Kentucky does not avoid that state's rules; you would register there as a foreign LLC as well.

Kentucky LLC at a glance (2026)

$40

Articles of organization

online or paper; waived if veteran-owned

$15

Annual report

due January 1 to June 30

$175

Limited liability entity tax

yearly minimum, paid with the Kentucky return

$100

Reinstatement penalty

plus each missed annual report

Step 1: Choose a name that meets the Kentucky rules

The Secretary of State's filing instructions set out the name rules. The name must contain "limited liability company" or "limited company", or one of the abbreviations "LLC" or "LC". If you abbreviate "limited company", the accepted form is "Ltd. Co." The name must also be distinguishable from every other name on the Secretary of State's records, which covers corporations, LLCs, limited partnerships, reserved names and registered names. Changing only punctuation, adding "the" or switching from singular to plural rarely makes a name distinguishable.

Search the Secretary of State's business database before you pay for a logo, signs or a domain, and use our LLC name checker to test variations quickly. If you are not ready to file, you can reserve a name for 120 days for $15, and renew the reservation for the same fee. Most founders skip the reservation and file the articles straight away, since the articles secure the name on their own.

Trading under another name. If your LLC will trade as "Bluegrass Paint Pros" rather than "Bluegrass Painting LLC", file a certificate of assumed name with the Secretary of State. The fee is $20. Kentucky does not require newspaper publication for an assumed name, which keeps the cost down compared with states that do. Our DBA guide explains how assumed names work across states.

Step 2: Appoint a registered agent

Every Kentucky LLC must appoint and keep a registered agent, the person or company that receives lawsuits and official notices for the business. The agent can be an individual who lives in Kentucky, a Kentucky business entity, or an out-of-state entity that is authorised to do business in Kentucky. The registered office must be the street address in Kentucky where the agent is located. A post office box is not accepted for the registered office, although the principal office, where the Secretary of State mails correspondence, can be a P.O. box and can be outside Kentucky.

Unlike some states, Kentucky makes the agent sign a consent to the appointment, either on the articles or on an attachment. If you name a commercial agent, an authorised person at that company signs. Forgetting the consent signature is one of the easiest ways to get a filing bounced.

Most owners who live in Kentucky act as their own agent at their home or shop address. That works if someone is reliably there during business hours, but the address becomes public. Owners who live out of state, travel a lot or want a home address off the public record usually pay a commercial registered agent, typically around $50 to $300 a year (an estimate based on published price lists of national agent services, not an official figure). If you later change the agent or the registered office, file a statement of change for $10; the annual report cannot be used for that change.

Step 3: File the articles of organization

The articles of organization (form KLC) bring the LLC into existence. The form is one page plus instructions. It asks for four things: the LLC's name, the registered office street address and agent, the mailing address of the principal office, and whether the LLC is managed by its members or by one or more managers. You can add further articles, numbered from Article V, but nothing else is required. The organizer signs under penalty of perjury, and the agent signs the consent.

Two optional boxes are worth knowing about. The first marks the LLC as a veteran-owned business, meaning at least 51% unconditionally owned by one or more veterans or serving members of the armed forces, reserves or National Guard. If you check it and attach redacted DD-214 forms or military IDs, the $40 filing fee is waived under KRS 14A.2-165. The second is a disclosure for retailers of authorised nicotine vapour products, which applies only if you will sell those products.

You can file online through FastTrack, which needs no copies, or mail or deliver one original and one exact copy to the Secretary of State in Frankfort with a check payable to the "Kentucky State Treasurer". The articles take effect on the date and time of filing. The Secretary of State says most filings are processed the same day they are received, though some take up to three business days.

Filing Kentucky articles of organization online

1. 1

   Check the name

   Search the Secretary of State's database and confirm the name has an accepted ending and is distinguishable.

2. 2

   Line up the registered agent

   Confirm the agent's Kentucky street address and get their consent to the appointment.

3. 3

   Choose member or manager management

   Member-managed suits most owner-run businesses; choose manager-managed if some owners will be passive investors.

4. 4

   Add the veteran box if it applies

   Veteran-owned LLCs attach redacted DD-214s or military IDs and pay no filing fee.

5. 5

   Pay and file on FastTrack

   Pay $40 by card, then save the filed articles that come back.

   Tip: Keep the filing and your Commonwealth Business Identifier together; the tax registration asks for both.

Why filings get rejected. The usual reasons are a name that is not distinguishable from an existing filing, a missing or non-standard ending, a P.O. box listed as the registered office, a missing agent consent, and leaving the management box blank. If the filing is returned, fix the issue and resubmit. Until the articles are accepted the LLC does not exist, so avoid signing a lease or opening an account in its name before then.

Step 4: EIN, operating agreement, bank account and tax registration

EIN. Apply for an employer identification number from the IRS once the articles are filed. It costs Free ($0), and the online application gives you the number at the end of the session. You need it for the bank, for hiring and for Kentucky tax registration. Our EIN application guide walks through each screen.

Operating agreement. Kentucky does not ask you to file an operating agreement, but Chapter 275 lets it set most of the rules: how profit is shared, who can sign contracts, how a member leaves and what happens on death or divorce. Without one, the statute's default rules apply. A single-member LLC should still have a short agreement, because banks ask for it and courts look at it when deciding whether the company is genuinely separate from you.

Bank account. Open a business account in the LLC's name with the filed articles, the EIN confirmation and the operating agreement. Pay business costs only from that account and pay yourself by transfer; our guide on how to pay yourself from an LLC explains draws and salary.

Department of Revenue. Every Kentucky LLC needs a Corporation/LLET account with the Department of Revenue, even one that sells nothing taxable, because the entity tax is filed under that account. Register through the Kentucky Business One Stop portal using the Commonwealth Business Identifier from your Secretary of State filing, or on the paper Kentucky Tax Registration Application, Form 10A100. The same application opens sales and use tax and withholding accounts if you need them.

Beneficial ownership reporting. Since FinCEN's March 2025 interim final rule, companies formed in the United States no longer file beneficial ownership information reports, so a new Kentucky LLC has no BOI filing (current position: Not required for US-formed companies).

The limited liability entity tax (LLET)

The limited liability entity tax is Kentucky's yearly charge for the liability protection the state gives corporations and LLCs. KRS 141.0401 imposes it on every corporation and every limited liability pass-through entity doing business in Kentucky. An LLC organised under Kentucky law is doing business in Kentucky by definition, so a Kentucky LLC owes it even in a year with no sales.

Kentucky LLC yearly costs by tax treatment

LLC type	Kentucky return	Entity tax	Owner income tax
Single-member, owned by a person	Form 725 plus owner's Form 740	$175 minimum	3.5% flat on profit (2026)
Multi-member, taxed as partnership	Form 765	$175 minimum	Each member at 3.5%
Elected S corporation	Form 720S	$175 minimum	Salary and pass-through income at 3.5%

Single-member, owned by a person

Kentucky return

Form 725 plus owner's Form 740

Entity tax

$175 minimum

Owner income tax

3.5% flat on profit (2026)

Multi-member, taxed as partnership

Kentucky return

Form 765

Entity tax

$175 minimum

Owner income tax

Each member at 3.5%

Elected S corporation

Kentucky return

Form 720S

Entity tax

$175 minimum

Owner income tax

Salary and pass-through income at 3.5%

For a small business the calculation is short. If the LLC's gross receipts or its gross profits from all sources are $3 million or less, the tax is the $175 minimum. The statute computes the tax both ways and charges the lesser amount, but never less than $175, and credits cannot reduce it below that. Between $3 million and $6 million a phased rate applies, and above $6 million the rate is 9.5 cents per $100 of Kentucky gross receipts or 75 cents per $100 of Kentucky gross profits. Most small LLCs never leave the minimum.

Which return. A single-member LLC owned by an individual, estate, trust or general partnership files Form 725, the Kentucky Single Member LLC Individually Owned Income and LLET Return. A multi-member LLC taxed as a partnership files Form 765, and an LLC taxed as an S corporation or C corporation reports the LLET on Form 720S or Form 720. The return and payment are due on the 15th day of the fourth month after the tax year ends, which is April 15 for calendar-year businesses.

The credit, and why the minimum is a real cost. Members get a nonrefundable credit for the LLET against Kentucky income tax on income from the LLC. The credit is the LLET minus $175, so for an LLC paying only the minimum the credit is zero. In practice the $175 is a fixed yearly cost of keeping a Kentucky LLC, alongside the $15 annual report. Short first years do not cut it, either: the department's instructions say a short-period return still owes the full minimum.

The annual report and keeping the LLC active

Every Kentucky LLC files an annual report with the Secretary of State between January 1 and June 30. Under KRS 14A.6-010, the first report is due in the calendar year after the LLC was organised, so an LLC formed in September 2026 files its first report between January and June of next year, not this year. The fee is $15, and most owners file online in a few minutes.

The report confirms the LLC's name, the registered agent and registered office, the principal office address and, for a manager-managed LLC, the name and business address of each manager. It does not ask for financial information. If you need to change the agent or registered office, file the separate statement of change first.

A Kentucky LLC's first two years

Day 1

Articles of organization filed ($40)

Week 1

EIN, bank account and Revenue registration for the LLET account

April 15 of year two

First Kentucky return with the $175 LLET for the formation year

January 1 to June 30 of year two

First annual report ($15)

Report not filed

Notice, then administrative dissolution if not fixed within 60 days

If the report is not filed, the Secretary of State notifies the LLC, and under KRS 14A.7-020 the company has 60 days from the date the notice was mailed to put things right. After that it is administratively dissolved. A dissolved LLC still exists, but it may only carry on business needed to wind up its affairs, and it shows as inactive and in bad standing to banks, landlords and anyone who checks.

Reinstatement is available at any time after dissolution, provided the LLC has not started winding up and notifying creditors. Under KRS 14A.7-030 you file a reinstatement application and a current annual report, pay the $100 reinstatement penalty plus $15 for each missed report, and include a certificate from the Department of Revenue that the LLC's taxes are paid. That last item is where most delays come from: unpaid LLET blocks reinstatement, so the entity tax and the annual report really work as a pair. Once granted, reinstatement relates back to the dissolution date and the company carries on as if nothing happened.

Other filings you may need later: an amendment to the articles ($40) if you change the LLC's name or management structure, and a certificate of existence when a bank, lender or public agency wants proof the LLC is active. Our certificate of good standing guide explains how these certificates work.

Licences and local taxes after you form

Filing with the Secretary of State creates the LLC. It does not give you permission to trade, and some local registrations are separate.

Sales and use tax. If you sell taxable goods or services, register for a sales and use tax permit through the same One Stop registration. The department does not list a fee for the permit. Kentucky charges 6% statewide with no local sales taxes, and since 2023 the tax has applied to a longer list of services. Our Kentucky sales tax guide covers what is taxable, filing frequency and vendor compensation.

Local occupational license taxes. Many Kentucky cities and counties levy an occupational license tax on business net profits and on employee wages, often with a separate local return. This is a local tax, not a state one, and rates and forms vary by city and county. Contact the city and county where you work before your first year-end so you know whether a local net profits return is due.

State and local licences. Kentucky has no general state business licence. Trades and professions are licensed by state boards, and food, alcohol, tobacco and some contracting work need specific permits. Hiring staff means registering for withholding, unemployment insurance and workers' compensation insurance; our guide to hiring your first employee covers the federal steps.

How Kentucky LLC owners are taxed on profit

Apart from the LLET, a single-member LLC owned by a person is ignored for income tax. The profit goes on the owner's federal Schedule C and the Kentucky individual return, taxed at Kentucky's flat rate. House Bill 1 of the 2025 session cut that rate from 4% to 3.5% for tax years starting on or after January 1, 2026, and the Department of Revenue's 2026 withholding formula uses the new rate. Lawmakers have been cutting the rate in steps, so check the current figure each year.

A multi-member LLC taxed as a partnership files Form 765 and passes income through to the members, who pay tax on their shares. If any member lives outside Kentucky, the partnership generally has to withhold Kentucky tax on that member's share and file Form 740NP-WH, unless an exemption applies. An LLC can also elect S corporation treatment to split working owners' income between a reasonable salary and distributions. It still owes the LLET and must run payroll; read LLC vs S corp for the federal side.

What it costs: a worked first-year and second-year budget

The table shows three realistic Kentucky LLCs. State fees come from the Secretary of State's fee schedule and KRS 141.0401. The registered agent line is a market estimate.

What the table leaves out. Insurance, an accountant, local occupational license taxes and professional licences sit on top. A food business also needs a permit from the local health department, and an equine operation may need county zoning approval.

Over five years. A Kentucky LLC that stays under the LLET threshold costs about $40 to form plus roughly $190 a year in state charges. That is cheap to form but not the cheapest to keep: in Ohio you pay $99 once and file no annual report, while in Tennessee the annual report alone starts at $300. Owners comparing Kentucky with Indiana should note that Indiana charges $32 online for a report every two years and has no entity tax like the LLET.

Worked examples

A Louisville IT consultant. Marcus files articles online for $40 in March 2026, names himself as registered agent at his home office, and gets an EIN the same afternoon. He links the business in One Stop and opens the Corporation/LLET account. He checks Kentucky's list of taxable services, finds his consulting work is not on it, and skips the sales tax permit. He does contact Louisville Metro's revenue office, because local occupational license tax can apply to his net profit even though the state has no business licence. Next April he files Form 725 with the $175 LLET and his own Form 740, and by June 30 he files the first $15 annual report.

A two-owner horse boarding business near Lexington. Dana and Ruth reserve "Elkhorn Creek Equine LLC" for $15 while they finish a lease on barns and paddocks, then file articles choosing member management. They trade as "Elkhorn Boarding", so they file a $20 assumed name certificate. Their boarding income is well under $3 million, so the LLET is the minimum. They file Form 765 each spring and give each owner a Schedule K-1.

An Ohio owner working in Northern Kentucky. Jake lives in Cincinnati and does renovation jobs in Covington and Newport. He forms a Kentucky LLC rather than registering his Ohio company as a foreign LLC for $90, and pays a commercial agent for a Kentucky registered office. Because he is not a Kentucky resident, he files a Kentucky nonresident return for his Kentucky profit, and he checks local occupational license rules in each city before he starts work.

Kentucky LLC launch checklist

0/8

• Name checked for an accepted ending and against the Secretary of State's database
• Registered agent at a Kentucky street address, consent signed
• Articles of organization filed and saved
• EIN issued and operating agreement signed
• Business bank account opened in the LLC's name
• Corporation/LLET account opened through One Stop
• Sales tax permit and local occupational license registration if they apply
• June 30 annual report and April LLET return in your calendar

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Common mistakes and how to fix them

Budgeting only for the $15 report. The LLET minimum is more than ten times the annual report fee. Put both in the budget from day one, and file the LLET return even in a year with no income.

Never opening the LLET account. Owners who sell nothing taxable sometimes skip Revenue registration entirely. The LLC still owes the entity tax, penalties and interest build up, and a reinstatement later needs Revenue's certificate that taxes are paid. Register through One Stop in the first week.

Filing the annual report in the formation year. The first report is due the year after formation. Each calendar year then needs its own report, and the window closes on June 30.

Using the annual report to change the agent. The report cannot change the registered agent or registered office. File the statement of change for $10 instead, or notices keep going to the old address.

Paying look-alike mailers. Letters offering to file your "annual report" or sell a certificate for $70 to $200 come from private companies. The report costs $15 directly on the Secretary of State's website.

Official links

• Kentucky Secretary of State — LLC articles of organization (Form KLC)$40; waived for veteran-owned businesses
• Kentucky Secretary of State — business filing feesReservation, annual report, reinstatement and change fees
• Kentucky Secretary of State — annual reportsDue January 1 to June 30
• KRS 141.0401 — limited liability entity tax$175 minimum
• Kentucky Department of Revenue — Form 725 instructionsSingle-member LLC income and LLET return
• IRS — Apply for an EINFree

What to do next

Check your name with our LLC name checker, file the articles on FastTrack and get your EIN the same day. In the first week, link the business in One Stop so the LLET account exists before your first April deadline, and read the Kentucky sales tax guide if you sell goods or taxable services. If you are still choosing a structure, our LLC registration guide and LLC vs sole proprietorship explainer cover the wider choices.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to start an LLC in Kentucky?

The Secretary of State charges $40 to file articles of organization, online through FastTrack or on paper. The fee is waived for veteran-owned businesses. After that, plan on $15 a year for the annual report and at least $175 a year in limited liability entity tax, paid with your Kentucky return. The EIN is Free ($0) and the sales tax permit has no listed fee.

When is the Kentucky LLC annual report due?

Between January 1 and June 30 every year, starting the calendar year after you form. An LLC organised in August 2026 files its first report in the January to June window of next year. The fee is $15. It confirms the registered agent and office, the principal office and, for a manager-managed LLC, each manager's name and business address.

Do single-member LLCs pay the Kentucky LLET?

Yes. Kentucky treats a single-member LLC as a limited liability pass-through entity, so it owes the limited liability entity tax even though it is disregarded for income tax. A single-member LLC owned by an individual reports it on Form 725. Businesses with gross receipts or gross profits of $3 million or less pay the $175 minimum, which cannot be reduced by credits.

What happens if my Kentucky LLC misses the annual report?

The Secretary of State mails a notice, and if the problem is not fixed within 60 days the LLC is administratively dissolved. It can then only wind up its affairs. To reinstate, file a reinstatement application with a $100 penalty, $15 for each missed report and a Department of Revenue certificate that taxes are paid. Reinstatement relates back to the dissolution date.

Do I need a registered agent in Kentucky?

Yes. Every Kentucky LLC must appoint and keep a registered agent at a Kentucky street address. The agent can be a Kentucky resident, including you, a Kentucky entity, or a foreign entity authorised to do business in Kentucky. A post office box is not accepted, and the agent must sign a consent to the appointment on the articles or an attachment.

How long does it take to form an LLC in Kentucky?

The Secretary of State says filings other than annual reports are usually processed the same day they arrive, though they can take up to three business days. Online FastTrack filings skip postal time, and the articles take effect on the date and time of filing. Mailed filings add delivery time on top of that.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 11 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Articles of Organization — Limited Liability Company (Form KLC, 7/25) — Kentucky Secretary of State · accessed 11 October 2026
2. 2.Business filing fees — Kentucky Secretary of State · accessed 11 October 2026
3. 3.Annual Reports — Kentucky Secretary of State · accessed 11 October 2026
4. 4.Business Filings FAQs — Kentucky Secretary of State · accessed 11 October 2026
5. 5.KRS 14A.6-010 — Annual report — Kentucky Legislative Research Commission · accessed 11 October 2026
6. 6.KRS 14A.7-020 and 14A.7-030 — Administrative dissolution and reinstatement — Kentucky Legislative Research Commission · accessed 11 October 2026
7. 7.KRS 141.0401 — Limited liability entity tax — Kentucky Legislative Research Commission · accessed 11 October 2026
8. 8.Form 725 Instructions — Kentucky Single Member LLC Individually Owned Income and LLET Return — Kentucky Department of Revenue · accessed 11 October 2026
9. 9.2026 Kentucky Withholding Tax Formula — Kentucky Department of Revenue · accessed 11 October 2026
10. 10.Get an employer identification number — IRS · accessed 11 October 2026
11. 11.Beneficial Ownership Information — FinCEN · accessed 11 October 2026