If you’re planning to start a Kansas limited liability company (LLC), knowing how much everything will cost is essential. But since this vital info is spread out across the internet, it can be tricky to get a total budget figured out.
This article will explain all the costs you can expect to incur when starting a Kansas LLC. Be sure to also check out our How to Start an LLC in Kansas article for more general information.
Read on to learn:
- How much it costs to form an LLC in Kansas
- Optional expenditures to consider
- How to pick the best LLC formation method
When you reach the end of this article, you’ll be able to make a budget for your Kansas LLC formation expenses.
Total Kansas LLC Cost – Starting at $160
According to the Kansas Secretary of State’s business services forms, the lowest possible cost to start a Kansas LLC is $160.
This only includes one item:
- Kansas Articles of Organization filing fee: $160 (online filing only)
Some LLCs will also need to register with the Kansas Department of Revenue to collect income taxes, but this is free of cost. You might also need professional and local business licenses, the costs of which vary.
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Kansas LLCs – the Basic Costs
The total cost to start a Kansas LLC depends on various factors. However, the bare minimum cost is $160. We’ve outlined the mandatory LLC formation expenses in the sections below.
Articles of Organization Filing Fee — $160 to $185
Articles of Organization are the documents that officially form LLCs. To start a Kansas LLC, you must file them with the Secretary of State. Don’t let the name concern you; articles of organization are relatively simple. All you need to do is list basic info about your business.
State Tax Office Registration — Free
Kansas law requires businesses that are involved in the retail sale, rental, or lease of tangible personal property to collect sales taxes. You will need to register with the Kansas Department of Revenue in order to collect taxes from your customers.
You can register online. There is no cost to register.
Professional Licenses and Business Permits — Various
Kansas requires that businesses in certain industries obtain licenses or permits. Check out the Kansas Business One Stop’s Common Business Licenses and Permits to learn more about these rules.
Your business might also need to get a local permit or license. For instance, the city of Wichita requires some types of businesses to get business licenses.
Kansas LLCs – Optional Costs to Consider
In addition to the required expenses discussed above, you may want to consider incurring some optional costs. Although these expenditures aren’t legally mandated, they can greatly benefit your LLC.
Expedited LLC Filing Fees — N/A
When you file your articles of organization online, they are effective immediately. For this reason, expedited service is not offered or needed.
Paper registrations are usually processed within 3 to 5 days, but no expedited service is available. So if you need your LLC filing to be expedited, you can simply file online (and save $5 on filing fees!)
Registered Agent Fee — about $100 per year
Under Kansas law, every LLC must have a registered agent in the state to receive legal papers. You will list your Kansas registered agent details in your articles of organization, but there is a $20 fee if you ever need to change your agent.
All too often, new LLC owners choose to be the registered agent for their own business. However, this can create issues. Registered agents must always be available to accept documents during normal business hours. Plus, their addresses are listed online, and they often receive a lot of junk mail.
To avoid these problems, you can hire a professional registered agent service instead. These businesses typically only charge about $100 per year, and they manage all of your LLC’s registered agent duties.
Check out our Best Registered Agent Services article for some of our recommendations.
Operating Agreement — Variable
Operating agreements are contracts between LLC members that establish how the business will be run. They usually explain vital details like the member’s rights and responsibilities or the procedure for members to exit or enter the LLC.
Kansas law does not mandate that LLCs have operating agreements. But we still strongly suggest that all LLC owners make one when they start their businesses. While you can write your own Kansas LLC operating agreement, it’s not advisable to do so if you don’t have relevant education or experience.
You can hire a lawyer to draft your LLC operating agreement. While costly, this method will make sure that the contract is well done and complete. But if you want to spend less, an LLC formation service will write an operating agreement for your LLC for as little as $39.
DBA Fee — Various
LLC owners often decide to refer to their businesses by “doing business as” or “DBA” names. A DBA is any name the LLC “goes by” that is not its official legal name. For instance, many business owners drop the “LLC” from their company’s legal name to make it more casual.
Kansas does not require or allow LLCs to register their DBAs at the state level. However, you may need to file a DBA with the city or county where you are operating. Check with your local government to find out about the DBA filing requirements that apply.
Name Reservation Fee — $30 to $35
If you have chosen a name for your LLC but aren’t ready to file your articles of organization, Kansas lets you reserve a name for 120 days. Doing so will prevent anyone else from registering the name during this period.
You can reserve a name for your LLC by filing a Temporary Reservation of Business Entity Name with the Secretary of State. You can submit a paper form or file online. There is a $30 filing fee for online submissions and a $35 fee for paper forms.
Domain Name — about $20 per year
It’s highly advisable to start a website for your LLC in order to compete in today’s market. But before you can make a website, you must purchase a domain. Luckily, domain names are affordable and easy to obtain.
It’s a good idea to buy your domain name as soon as you can so no one else gets it first. A speedy purchase can also help you avoid “domain squatters,” who buy up a new LLC’s domains and then sell them for a profit.
You can get a domain name from GoDaddy.com or a similar service for about $20 to $50 a year. And there are often sales or discounts available, so you can probably spend even less than that.
Getting an Employer Identification Number (“EIN”) — Free
An EIN is a 9-digit identification number that is given to a business by the Internal Revenue Service. It’s like a social security number, but for a company instead of a person. While some LLCs must apply for an EIN, others are not legally required to do so.
Whether or not it’s mandatory, we suggest that all LLCs have an EIN. Banks usually demand an EIN for you to open a business bank account. Also, an EIN can help protect you from identity theft since you won’t have to give out your SSN.
You can obtain an EIN online or by mailing Form SS-4 to the IRS. Just keep in mind that getting an EIN is always free. So, you shouldn’t pay to get an EIN unless it's part of a larger service package.
Foreign LLC Qualification Fees — about $100 per extra state
If you want to operate your business outside Kansas, you should budget for some extra expenses. While you aren’t required to start a new LLC in every state, you must register as a foreign limited liability company.
Foreign LLC filing fees vary between states, but the typical cost is around $100 per state.
Writing Formation Costs Off
You can usually deduct your LLC formation costs as business startup expenses on your income taxes. The IRS provides detailed guidance on this topic, so we recommend that you check out the IRS website to learn more.
By default, LLCs are classified as “pass-through” entities. This tax status allows LLC owners to deduct up to $5,000 in startup costs in the business's first year.
Lauren, who is already a licensed massage therapist, decides to start a single-member LLC and open a massage therapy business in Wichita, Kansas. Her formation costs are as follows:
- Kansas LLC Articles of Organization (online filing): $160
- Wichita Massage Therapy License: $200
- Operating Agreement: $50
- Kansas Registered Agent service Fees: $100
- Name Reservation Fee: $30
- Web Domain Costs: $30
Since the LLC is a pass-through entity, it won’t be subject to income taxes. Rather, Lauren will report her profits from the LLC and any deductions on her own state and federal income taxes.
Lauren’s total formation expenses were $570. Before she deducted these costs, her total taxable income was $36,000. However, by deducting her startup expenses, she reduces her taxable income to $35,430. This will lower her 2022 federal income tax bill from $4,121 to $4,053.
While this is not a huge drop, LLC owners who deduct their costs will see their tax savings add up over time.
Cheapest Way to Start an LLC in Kansas
When choosing the LLC formation method you want to use, be sure to keep your LLC’s unique needs in mind. We’ve explained some of the most common approaches in the sections below to help you learn more about them.
Formation Service – $39 + state fees
A popular option is to hire a business formation service to manage the LLC formation process. These services aren’t run by lawyers, but they specialize in starting all types of business entities. If you use a formation service, they will handle the entire process for you.
Using an LLC formation service is a good option for many LLCs. 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.
Just remember that formation services aren’t the right choice for all LLCs. The disadvantages of this approach 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.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
The most dependable alternative is to engage an attorney to form your LLC. With this method, you will receive legal services that are specifically tailored to your needs. But keep in mind that expertise doesn’t come cheaply. Many lawyers charge hourly fees for their services, often several hundred dollars per hour.
Despite the cost, hiring an attorney offers profound benefits:
- 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.
Still, the drawbacks of this method often outweigh its advantages for the average LLC owner:
- 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
Of course, you can always choose to use a do-it-yourself method. But make sure you remember that your time has substantial value. Spending time on LLC formation takes you away from actually running your business.
The benefits of a DIY formation approach include:
- 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.
As will all things, there are also weaknesses of a DIY method:
- 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 Kansas LLC Fees: How Much Will it Cost to Maintain your LLC?
To comply with Kansas law, you must file an annual report for your LLC with the Secretary of State each year. You can submit your annual report online with a $50 filing fee or by mail with a $55 filing fee.
You may also need to periodically renew any licenses and permits your LLC needs.
Some optional expenses will also be due each year. For instance, you may need to pay either of the following:
- Registered agent service fee: approximately $100
- Domain name registration: $20 to $60
How Much are LLC Taxes in Kansas
LLCs are typically pass-through tax entities. This means that the company doesn’t have to pay income taxes. Instead, the LLC’s owners will report their profits from the business as their personal income.
Some LLC owners choose to have their LLC taxed as a corporation. If you elect to do so, your LLC will be subject to Kansas Corporate Income Tax.
Kansas LLC Formation Costs Quick Links
- Kansas Online Filing
- Kansas Business Services Forms
- Kansas Secretary of State
- Kansas Department of Revenue
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
Kansas LLC Formation Costs FAQs
How much does it cost to start an LLC in Kansas?
The minimum cost is $160. But it may cost more, depending on your location and the industry of your business.
What is the cheapest way to start an LLC in Kansas?
The do-it-yourself approach is the cheapest in terms of cash investment. But when you account for the value of your time, the most cost-effective method is generally an affordable LLC formation service.
Do I need to hire an attorney to form an LLC in Kansas?
No. The average LLC doesn’t need a lawyer. A DIY method or an LLC formation service will typically be more than adequate.
Can I pay to form an LLC more quickly in Kansas?
No. If you file online, your filing will be effective immediately. So, you can simply choose this method if you need quick service.