Cost to Form an LLC in Hawaii

Before starting a limited liability company (LLC) in Hawaii, you should learn about the costs. But this can be challenging, especially if you don’t know where to start.

Luckily, you have come to the right place! This article will explore all of the expenses associated with forming a Hawaii limited liability company.

Read on to discover:

• Required expenses for starting a Hawaii LLC 
• Extra costs that you should consider
• How to pick the right formation method for your LLC

By the time you reach the end of this article, you will know the basic Hawaii LLC formation expenses.

Total Hawaii LLC Cost – Starting at $70

According to the Hawaii Department of Commerce and Consumer Affairs (DCCA)’s LLC Fees, the absolute lowest cost to form an LLC in Hawaii is $70. 

This includes two items: 

• Hawaii Articles of Organization filing fee: $50
• Hawaii General Excise Tax License: $20

You may also need to get professional and local business licenses, the costs of which vary.

Last updated: Dec 2024

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Hawaii LLCs – the Basic Costs

The total cost of starting a Hawaii LLC varies. However, the bare minimum cost is $70. We’ve explained your potential mandatory expenses below.

Articles of Organization Filing Fee — $50

Articles of Organization are the legal documents that officially create LLCs. To start an LLC in Hawaii, you must submit them to the DCCA. While this might seem intimidating, all you need to do is list the basic details of your business.

The state filing fee for Hawaii articles of organization is $50. You can file ​​online or use a paper form.

Hawaii General Excise Tax License — $20

Hawaii requires LLCs that engage in business in the state to obtain a General Excise Tax License. You can do this by submitting a Basic Business Application to the Hawaii Department of Taxation. You can file online or use a paper form. There is a $20 registration fee. 

Professional Licenses and Business Permits — Variable

Hawaii requires some businesses to get state licenses or permits. You can learn more about these rules through the DCCA’s Business Action Center.

You may also need to get a local permit or business license. For instance, the county of Hawaii requires some LLCs to get business licenses.

Hawaii LLCs – Optional Costs to Consider

On top of the above expenses, we suggest you consider some more expenditures. These extra costs can help your Hawaii limited liability company run more smoothly.

Expedited LLC Filing Fees — $25

Standard LLC processing takes about 5 to 7 business days. Expedited review is available for a $25 fee.

Registered Agent Fee — about $100 per year

Under Hawaii law, an LLC must name a registered agent to receive legal documents for the company. You will include your registered agent details in your articles of organization at no extra cost. However, there is a $25 fee to change your agent.

Some LLC owners think it’s a good idea to serve as the registered agent for their own businesses. Unfortunately, this can lead to problems. Registered agents must always be available to accept papers during normal business hours. Their addresses are also listed online, so they can get a lot of junk mail or have their privacy invaded.

That’s why we suggest using a professional registered agent service. The cost is only about $100 per year, and the service will manage every aspect of your LLC’s registered agent tasks.

Check out our Best Registered Agent Services article for some of our recommendations.

Operating Agreement — Variable

A Hawaii LLC operating agreement is a contract that sets the rules for how the business will run. They detail vital terms such as each member’s rights and duties and the process by which they can join or exit. 

Hawaii law doesn’t require you to make an operating agreement for your LLC. But, we strongly suggest that all LLCs have one. Although you can write your own LLC operating agreement, it’s not wise to do so unless you have relevant experience.

You can retain an attorney to draft your LLC’s operating agreement and receive a professional and tailor-made contract. But lawyers can be costly. So if you want to spend less, you can hire an LLC formation service to write one for as little as $39.

DBA Fee — $50

Many entrepreneurs decide to run their LLCs under a “doing business as” or “DBA” name. A DBA is a name that a company uses that is not its official legal name. For instance, it’s standard to drop the “LLC” from a DBA to make the business seem more casual. 

In Hawaii, DBAs are called “trade names.” If you want to use a DBA for your LLC, you must file an Application for Registration of Trade Name with the DCCA. There is a $50 state fee. You can file ​​online or submit a paper form.

Name Reservation Fee — $10

If you have chosen a business name for your LLC but don’t want to file your formation paperwork, Hawaii lets you reserve a business name for 120 days. This will keep others from taking the name during this time.

To reserve an LLC name, you must submit an Application for Reservation of Name to the DCCA. You can file ​​online or use a paper form. There is a $10 filing fee.

Domain Name — about $20 per year

Making a business website is an integral part of a modern LLC marketing plan. And to build a website, you must first obtain a domain name. Luckily, domain names are relatively cheap and readily available.

However, you should purchase your domain as soon as you can. If you take too long to buy it, someone else can get it first. For instance, “domain squatters” like to buy up a new LLC’s potential domain names and sell them at a markup. 

You can buy a domain from GoDaddy.com or a similar website for about $20 to $50 a year. There are also usually sales or discounts available, so you can often get one even cheaper.

Getting an Employer Identification Number (“EIN”) — Free

EINs are 9-digit ID numbers that the Internal Revenue Service gives to businesses. In a lot of ways, an EIN is like a social security number for a company. While the law mandates that some LLCs obtain EINs, other types of LLCs aren’t required to do so. 

Still, we suggest applying for an EIN even if you don’t have to. Most banks will require you to have an EIN in order to open a business bank account. Plus, EINs can help protect against identity theft.

You can get an EIN online or mail Form SS-4 to the IRS. No matter what, an EIN is always free. So, you should never pay someone to get an EIN for you. You can just do it yourself!

Read More: How to Get an Employer Identification Number in Hawaii

Foreign LLC Qualification Fees — about $100 per extra state

If you plan to expand your business outside Hawaii, you should budget for some additional costs. Although you won’t need to start a new LLC in each state where you want to do business, you will be required to register as a foreign limited liability company. 

Foreign LLC filing fees vary, but are typically about $100.

Writing Formation Costs Off

You can usually deduct your LLC formation costs on your federal income taxes as business startup expenses. The IRS provides a substantial amount of guidance on this topic, so check out the IRS website to learn more.

LLCs are considered “pass-through” tax entities by default. This classification allows LLC owners to deduct up to $5,000 in startup costs from their federal taxes in their first year.

Cheapest Way to Start an LLC in Hawaii

Deciding on the best LLC formation method can be tricky. Make sure that you keep your business’ unique news in mind. In the sections below, we’ve explained three of the most popular formation methods.  

Formation Service – $39 + state fees

Business formation services are a popular option. Although they don’t offer the same level of expertise as law firms do, these companies specialize in starting LLCs and other types of business entities.

Pros

An LLC formation service is a practical approach for many businesses. The advantages of this method include:

• They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
• They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
• They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
• They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.

Cons

However, formation services aren’t the right choice for everyone. The detriments to this method include:

• They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
• Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products or business services you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.

Attorney

You can also choose to retain a lawyer to form your LLC. This option puts your business in the hands of an experienced legal professional. Just remember that attorneys can be expensive. They usually bill hourly for their services, often at a rate of several hundred dollars per hour. 

Pros

Despite the expense, there are significant advantages to hiring a lawyer:

• Lawyers help you manage risk. If you are starting a business with complicated legal issues, hiring a lawyer would be the best choice.
• Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.

Cons

Still, the disadvantages of this method often outweigh the benefits:

• Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
• Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
• Lawyers also take longer to form a business than a formation service. Because lawyers are also very careful people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.

Do it Yourself

Some business owners decide to just start their LLCs themselves. While this seems like a cost-effective approach, don’t forget about the value of your time. You may be better served to spend your time improving other aspects of your business instead of filling out LLC formation paperwork.

The advantages of the DIY formation approach include: 

Pros

• Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
• It costs less upfront. If you don’t account for the value of your time, a DIY solution is the cheapest option.

Just don’t forget the negative aspects: 

Cons

• You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
• There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that can cost them even more time and money.
• It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.

Annual Hawaii LLC Fees: How Much Will it Cost to Maintain your LLC?

Hawaii law requires LLC owners to submit an annual report to the DCCA. You can file your annual report online or fill out a paper form. There is a $15 filing fee.

You may also periodically need to renew your LLC’s licenses and permits.

Finally, some additional expenses must be paid annually. For instance, your ongoing costs might include:

• Registered agent service fee: approximately $100
• Domain name registration: $20 to $60

How Much are LLC Taxes in Hawaii

As “pass-through” entities, LLCs are not required to pay income taxes. Instead, you will report your LLC’s income on your personal income taxes.

However, if you elect to have your LLC taxed as a corporation, it will be subject to Hawaii’s Corporate Income Tax. 

Hawaii LLC Formation Costs Quick Links

• Hawaii Online Filing
• Hawaii LLC Fees
• Hawaii Department of Commerce and Consumer Affairs
• Hawaii Department of Taxation
• IRS — apply for an EIN online
• IRS information regarding the federal tax treatment of LLCs