General Guide to Company Incorporation in Kentucky
Updated on Monday 15th July 2019
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Kentucky is the 26th most populated state in USA and it is known as the Bluegrass state for its fertile soil that helped the agriculture to develop. Because Kentucky is bordered by three rivers, Big Sandy, Mississippi and Ohio, the state has a multitude of connections with the other states in the USA through its maritime sector. We have prepared a general guide to company incorporation in Kentucky and we remind foreign entrepreneurs that they can establish their operations with complete support offered by our team of specialists in company formation in USA.
Registering an LLC in Kentucky
Among business entities that are suitable to the needs of an entrepreneur, the limited liability company represents the proper form to consider in Kentucky. The Secretary of State of Kentucky and particularly the Business Division oversees the registration process of LLCs in the state made by both locals and foreigners. The procedure starts with drafting the Articles of Association which must contain all the information about the future business, such as:
- the name of the company;
- the owners;
- the board of directors;
- the business address;
- the activities;
- the name of the registered agent.
Besides opening a limited liability company in Kentucky, business persons might be interested in limited partnerships, sole proprietorships, non-profit organizations or corporations. Starting a business in USA requires complete attention to all aspects involved, considering a name verification and applying for tax purposes in the chosen state.
The registered agent for your business in Kentucky
Opening a company in USA is subject to varied requirements among which we mention the registered agent. The entrepreneur has the possibility of appointing an individual with full responsibilities on the legal documents of the firm or can engage another company as a registered agent for his or her business. This is a mandatory condition at any kind of company incorporation in USA, including in the state of Kentucky.
Applying for EIN
All trading activities of a company in Kentucky must be registered under the EIN which is the Employer Identification Number necessary for paying taxes in the state. The IRS (Internal Revenue Service) in USA controls the tax activities for companies through local offices, including in Kentucky. Additionally, businesses in this state must register for employment taxes if they will consider hiring staff.
Paying taxes in Kentucky
Just like in most American states, the sales tax in Kentucky is set at 6%. As for the income taxes, these range between 2% and 6% in accordance with the registered profits. It is good to know that a property tax is levied for particular assets, but exemptions might be specified in this sense.
Do I need insurance for my business in Kentucky?
Yes, if you want to be protected from varied risks, you should consider signing an insurance contract with a local company. The general liability insurance is the type of policy that it is recommended for small and medium companies registered in Kentucky. This kind of insurance protects your business from:
- Personal liabilities like copyright infringement, wrongful eviction or invasion of privacy;
- Medical payments for accidents which took place around the company grounds;
- The losses resulted from the violation of copyrights of another company in USA;
- Property damage, whether the company’s properties or of clients.
Accountants, craftsmen, legal advisors or consultants can direct their attention to the professional liability insurance which protects them from possible malpractice appeals in Kentucky. Make sure to ask for an insurance as soon as you decided on the business structure in Kentucky. Immediate support and assistance can be offered by our team of company formation specialists in USA who can tell you how you can start a business in USA.
How can I open a sole trader in Kentucky?
The steps for opening a sole proprietorship in Kentucky are quite simple, and the formalities do not involve the Kentucky state government and any legal documents. Here are the main steps for opening a sole trader in Kentucky:
- Choose the business name and verify it with the Kentucky Secretary of State;
- You can make a name verification with the US Patent & Trademark Office;
- The next thing to do is to file an Assumed Name Certificate if you do not want to use your personal name;
- An occupational or a professional license is needed for your sole trader in Kentucky;
- The Employer Identification Number is needed for paying the taxes in Kentucky;
- You must open a business bank account for future financial operations.
Once the sole proprietorship is registered in Kentucky, you can arrange and conclude a general liability insurance. The Kentucky One-Stop Business Portal provides information about the needed licenses and permits for your sole proprietorship in the state. However, if you want to simplify the registration process of a sole trader in Kentucky, you can get in touch with our team of company formation agents in USA.
Company formation in Kentucky in simple steps
If you already know what kind of business you want to open in Kentucky, it is best to focus on the main steps involved. It all starts with a simple business plan involving a marketing approach, your personal target and, of course, your budget. Creating a business plan is not complicated, especially if you are aware of the available resources. Here are some steps, phases and recommendations to bear in mind when opening a business in USA, including in Kentucky:
- The limited liability company, the C corporation and the S corporation are among the business structure preferences of international investors;
- The federal and state licenses and permits need to be obtained at the time you register the business in Kentucky;
- An appointed registered agent in Kentucky is needed for your firm;
- The registration for tax purposes is mandatory for any kind of business in Kentucky. You will have to apply for EIN;
- Your business is an independent legal entity and therefore, a special bank account is needed, apart from your personal one;
- Building the brand is not complicated, however, it takes time and resources;
- A representative website can sustain your business, so check the opportunities in this direction;
- The marketing strategies established in the first place can be revised and adjusted, if it is the case and in accordance with your clientele.
Our general guide to company incorporation in Kentucky addresses to both local and foreign entrepreneurs wanting to start a company in Kentucky.
A business plan for your company
No matter the domain in which you want to activate in Kentucky, it is suggested to create a business plan and meet the demands of the American market. This, in most cases, requires a settled budget, a marketing strategy, a development plan, advertising methods and related radio and TV campaigns. If you are interested in obtaining a bank loan for future investments in your company, you might want to prepare and provide a marketing plan.
The economy of Kentucky
The exceptional farming conditions where the tobacco and corn industry play significant roles made Kentucky a favorable destination for doing business. Frankfort is the capital of Kentucky and leading financial center in the state due to satisfactory business conditions for investors. Louisville, Bowling-Green, Covington, Lexington-Fayette, Florence, Georgetown and Richmond are among important cities in the state of Kentucky and representative municipalities from an economic point of view. Kentucky is recognized for its coal production and the supply of bourbon whiskey on an international plan. You might want to read a few facts and figures about the businesses in Kentucky:
- there were more than 347,000 small companies registered in Kentucky in 2018;
- 3.5% is the unemployment rate in Kentucky for 2018;
- there are more than 129,000 construction companies in Kentucky;
- there are more than 217,000 companies activating in the retail sector in Kentucky;
- there are more than 315,000 companies in the manufacturing sector in Kentucky.
It is essential to have the support of a company formation team in Kentucky who can guide you throughout the entire business registrations in this state, so if you would like a personalized offer, make sure you address your inquiries to our advisors.
Investors can choose Kentucky for company incorporation and can contact our team of company formation agents in USA for comprehensive support and guidelines.