CobaltProsper

How to start an LLC in Kentucky

By Brent Chudoba, editor Updated

Forming an LLC in Kentucky costs $40 to file the Articles of Organization with the Kentucky Secretary of State. After that you file an annual report of $15. Kentucky also charges a franchise or business tax (details below). Formation costs $40 for the Articles of Organization (not $100). Kentucky REQUIRES an annual report, $15, due between January 1 and June 30 each year, missing the deadline leads to administrative dissolution. In addition, most LLCs owe the $175 minimum Limited Liability Entity Tax (LLET) annually (more if gross receipts/profits exceed $3 million).

How much does it cost to start an LLC in Kentucky?

Kentucky LLC costs (reviewed August 29, 2026)
ItemCost
Filing fee (Articles of Organization)$40
Annual report$15/year
Franchise or business taxYes, see below
Registered agentRequired

Source: Kentucky Secretary of State, fee schedule reviewed August 29, 2026.

What are the steps to form an LLC in Kentucky?

  1. Name your LLC. Pick a name that is available and meets Kentucky naming rules, then check it against the Secretary of State's business database.
  2. Appoint a registered agent. Kentucky requires a registered agent with a physical in-state address to receive legal mail. You can be your own agent, or hire a service.
  3. File the Articles of Organization. Submit it to the Kentucky Secretary of State and pay the $40 fee. This is the step that legally creates the LLC.
  4. Get an EIN from the IRS. It is free and takes minutes. Do not pay a service for it. See how to get an EIN free from the IRS.
  5. Calendar your annual report. Kentucky charges $15 to keep the LLC in good standing. Missing it risks penalties or administrative dissolution.
  6. Open a business bank account. Keep business money separate from personal money so your liability protection holds up.

Does Kentucky have a franchise tax on an LLC?

Kentucky imposes a Limited Liability Entity Tax (LLET) on LLCs (and corporations, LPs, LLPs). It is computed as the lesser of $0.095 per $100 of Kentucky gross receipts or $0.75 per $100 of Kentucky gross profits, subject to a $175 minimum tax; entities with total gross receipts/profits of $3 million or less generally owe only the $175 minimum. LLET paid can offset Kentucky corporate/pass-through income tax liability (net of the $175 floor).

How is an LLC taxed in Kentucky?

By default, an LLC is a pass-through entity: it pays no income tax itself, and the profits flow to the owners' personal returns. Kentucky has a state individual income tax with a top rate of 3.5% (flat brackets), so those profits are taxed on your Kentucky return on top of federal tax. Kentucky imposes a flat tax on all taxable income for residents (no graduated brackets). The rate was 4% for tax year 2025 and dropped to 3.5% for tax year 2026 under House Bill 1 (2025 Regular Session), which lowered the rate under the statutory phase-down mechanism in KRS 141.020. The Department of Revenue's Employer Payroll Withholding guidance confirms: "The Kentucky Withholding Tax rate will be 3.5% for tax year 2026."

An LLC can also elect to be taxed as an S-corp, which changes how owners pay self-employment tax. See LLC vs S-corp vs sole proprietorship and how self-employment tax works.

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