Incorporator The Journal of U.S. Formation
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Editorial 3 MIN READ

How to form a Kentucky LLC

Low $40 filing fee, $15 annual report, and the LLET that catches every founder off guard.

Ada (Research Assistant)
Research assistant, Incorporator.org
3 min read Updated
Contents 10 sections
  1. Overview
  2. Filing fee and formation
  3. Registered agent
  4. Annual report
  5. Taxation; the LLET catch
  6. Three things founders miss
  7. Filing checklist
  8. Sources
  9. Post-formation: the first-year checklist
  10. Additional primary sources

entucky is one of the cheapest states in the country to form an LLC; the filing fee is $40, and the annual report is $15. That makes it attractive for in-state founders, small operations, and holding companies. But Kentucky layers a Limited Liability Entity Tax (LLET) on top of the corporate income tax that surprises most first-time filers, so the sticker price is misleading.

Overview

The Kentucky Department of Revenue LLET guidance is the authoritative source on the Limited Liability Entity Tax, which surprises many first-time Kentucky filers. The IRS LLC classification page covers how a Kentucky LLC's federal default is treated, but remember: the LLET applies at the state level regardless of federal election.

Filing is done through the Kentucky Secretary of State at sos.ky.gov.

Filing fee and formation

  • LLC filing fee: $40 (online or paper)
  • Form: Articles of Organization (Form KLC)
  • Processing: Same-day online; 3–5 business days paper
  • Name rules: Must contain "Limited Liability Company," "LLC," "L.L.C.," "Limited Company," or "LC."

Kentucky's online system (OneStop Business Portal) issues a filing confirmation number immediately; the actual Articles are usually returned within hours.

Kentucky's $40 formation is the cheapest headline in the country. The $175 minimum LLET is what actually gets written on the check. Budget around the LLET, not the filing fee.

Registered agent

Every Kentucky LLC must have a registered agent with a physical street address in Kentucky (no P.O. boxes). You can be your own agent if you reside in Kentucky. Commercial agents typically run $50–$150/year.

Annual report

  • Fee: $15
  • Due: Between January 1 and June 30 each year
  • Filed via: OneStop Business Portal
  • Late penalty: Administrative dissolution after 60 days past due

The report just updates officers/managers and the registered agent; no financial disclosures.

Taxation; the LLET catch

Kentucky applies a Limited Liability Entity Tax to every LLC, LP, and corporation doing business in the state, regardless of federal tax classification. The LLET is the greater of:

  • $0.095 per $100 of Kentucky gross receipts, or
  • $0.75 per $100 of Kentucky gross profits

With a $175 minimum. This applies even to pass-through LLCs that owe no corporate income tax.

On top of LLET, Kentucky corporations pay a 5% flat corporate income tax. Pass-through LLC income flows to members' personal returns at the 4% (as of 2026) individual rate.

Three things founders miss

  1. LLET applies to pass-through LLCs. Founders assume "LLC = no entity-level tax" and are surprised by the $175 floor every year, plus gross-receipts/profits layering.
  2. Annual report window, not anniversary. The January 1 – June 30 window is flat; file it early in Q1 and move on.
  3. OneStop is the system of record. The older paper process still exists but the OneStop portal is the canonical filing channel; agents who use paper add days to every filing.

Filing checklist

  • Reserve name (optional, $15, 120 days)
  • File Articles of Organization ($40 via OneStop)
  • Appoint registered agent with KY street address
  • Obtain EIN from IRS (free, online)
  • Register with Kentucky Department of Revenue for LLET
  • Register for sales/use tax if applicable
  • Calendar annual report (Jan 1 – Jun 30)
  • Budget $175 minimum LLET for year one

Sources

  • Kentucky Secretary of State; sos.ky.gov
  • Kentucky Revised Statutes, Chapter 275 (Kentucky Limited Liability Company Act)
  • Kentucky Department of Revenue; LLET guidance

Post-formation: the first-year checklist

Formation is step one. The obligations that actually generate state and federal trouble if missed sit in the first twelve months after the Articles clear. Plan for:

  1. EIN. Apply at the IRS EIN portal. Free, instant if you have a US SSN or ITIN.
  2. Operating agreement. Not filed with the state, but every state presumes one exists for dispute resolution. A single-member LLC still benefits from a written one; banks routinely ask for it when opening a business account.
  3. Business bank account. Opens only after the state filing clears and the EIN is issued. Commingling personal and business funds is the fastest way to expose yourself to a piercing-the-corporate-veil argument; the SBA's guide to business structures covers the basics of why separation matters.
  4. BOI report. The FinCEN Beneficial Ownership Information reporting regime requires most new LLCs to report beneficial owners within 30 days of formation. Penalties are serious; the filing is free.
  5. State tax registration. Sales tax, withholding, unemployment insurance: each is a separate account in most states. Register early so you are not back-filing returns.

Additional primary sources

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