How To Start An Llc In Kansas

Kansas is one of the top locations in the United States. It is well-known, finding immortal recognition across the world due to appearances in films like the Wizard of Oz. However, it is also a great state where there is plenty of business opportunity. And those who are looking to start a business in Kansas need to consider incorporating your business. In this article, we look at how to start an LLC in Kansas.

Why Start a Business in Kansas?

There are numerous reasons why starting a business in Kansas is a great idea. For one, it is known to be a good location for venture capitalists. In 2022, the local news teams reported that there was investment of more than $908 million in small businesses. This was up 89.7% from the previous year. About 19 of these businesses received venture funding for the first time, with the average business getting $17.46 million in funding.

And there are events to help you raise funds for your small business. The Fund Conference KC is a great opportunity to meet those responsible for funding small and medium businesses.

The state is also known as one of the best for talent. Kansas City has had the sixth largest growth rate for North America in the past five years, with software and service job opportunities in the city growing by 76%. The number of tech jobs and businesses in the city is actually more than in Los Angeles, Boston, New York, Dallas, Philadelphia, and Washington DC. Therefore, there is plenty of opportunity for businesses to get the talent they need in the state. And being rated as the second-best city for college graduates, the city is sure to attract more talent soon.

The state also has some of the best support systems in the world for startups. There are news outlets dedicated to startup news, organizations to help with suppliers, services and funding, social events, and partnerships all within the city.

The state is also known to be connected well to infrastructure. And with lower living costs lower than in other locations across the United States.

Why Should I Start an LLC in Kansas?

The LLC business model is one of the most important business structures to understand. It allows you to have lots of great business protection, while not losing the tax advantages that you can have when you are a sole proprietor.

For example, those businesses that have registered their LLC business name are protecting their business name. No one else can use the name within the state. Nor are they able to use a similar name that might confuse audiences. Therefore, you have control over the whole name, by law. If someone goes against this, you have the legal right to take them to court and claim compensation for potential losses.

And another protection that you can get is that you can benefit from your personal property is protected. If your business doesn’t succeed and there are debts that others want to collect from you, they can only collect from the assets of the business. So your home, clothes, furniture, and personal belongings are counted separately from the business.

You will also have easier access to financing and credit. As an LLC you will find that business banks will be more willing to allow you to open a bank account. Suppliers will also offer better credit terms, allowing you to have a better cash flow, something that is the biggest concern for most startup businesses.

Another advantage is that you can be more attractive to venture capitalists. You can get more money and better terms with these investors.

The final advantage is that you can have a better tax burden because you are charged as an individual. However, you can also opt to be charged as a corporation. If you would like to know which is better for your business, speak to a financial advisor or an accountant.

And if you need to compare, here is a table of how Kansas compares with some of the nearby states.

How to Start an LLC in Kansas

Here are the steps that you need to follow if you would like to start an LLC in Kansas.

Step 1 – Choose a Name

The first thing that you will need to do is to choose a name for your business. The name for the LLC does have to follow certain rules and regulations. One of the first things that you’ve got to check is that your name includes a Limited Liability Company or LLC, or an abbreviation.

You should also ensure that your name cannot be confused with a government agency or organization. And then your name needs to refrain from certain words, like bank and regulator, unless these are part of your business and you have permission.

The final element to this is to make sure that your business name isn’t similar to another. To check this, you can do a Kansas business name search.

Step 2 – Reserve your Business Name

Once you’ve completed this, you need to take some time to reserve your business name. It takes just a few minutes to complete this process. You can submit the name reservation online or via email.

The cost for this is $30. It is non-refundable and it only protects the name from being used for 120 days. However, this should be long enough for you to complete the required paperwork for your business.

Step 3 – Find a Registered Agent

Now you need to find a registered agent. A registered agent is an individual or corporate entity that can act or receive information for you in the state. They must be someone who is over 18 years of age, have an address within the state, be available during normal business hours, and be reliable.

You can have someone who works for the business. But another option is to have a company provide that service. ZenBusiness and Bizee are great options because they can also help you to register your LLC in Kansas and other states.

Step 4 – Articles of Organization

Now you need to register your LLC by sending off your documents to the right department. There is a filing fee for this is between $160 and $165. The articles of organization are documents that can be filed online or in the post. The articles of organization need to include the following information:

• LLC name and address
• The registered agent’s details
• Manager-managed or member-managed
• The signature of the organizer

Unlike in some states where the process can take days or weeks, as long as you complete all the documents online, then your business can be granted LLC status within 24 hours. This can be such a relief and allows you to improve your business’ progress. Without this short time, it can often mean you’re stuck waiting for the government to complete your paperwork.

Step 5 – Operating Agreement

You should now look at getting your operating agreement. This is not a mandatory document, but it is very useful when you have an issue in the business as it is supposed to deal with the management structure and who has the final say in the business.

Investors might also want to see your operating agreement before they commit funds to your business. Therefore, it is always important to consider writing one.

Step 6 – EIN

Finally, you will need to request an EIN for your business. This is a free Employer Identification Number. While you might not have employees, it is still useful because many business bank account providers will request one to give you favorable terms. To request one, all you need to do is go to the IRS website.

How Much is it to Start an LLC in Kansas?

There are going to be costs when it comes to starting an LLC in Kansas. The reservation of the name is $30 and then the filing of the articles or organization is up to $165. Therefore, you can expect costs to be at least $200.

There are also going to be other costs, like the first tax report, business licenses, permits, and other details. If you hire a third party for your business’s registered agent, they will also have a fee.

What Are Taxes Like in Kansas?

Corporate tax in the state is set at a flat rate of 4%. Those that have incomes above $50,000 will also have a surtax of 3%. All taxes are payable throughout the year.

Final Word: How to Start an LLC in Kansas

Kansas is one of the best locations for business in the United States. And if you’re going to be serious, then you will want to have an LLC that offers you lots of benefits and perks to secure your financial future as well as offer protection for your brand. In addition, a good LLC can be more investable. Above are the instructions you need to know how to start an LLC in Kansas.