A limited liability company (LLC) a single-member or multiple-member business that limits the personal liability of its owners. Business owners organize their businesses as LLCs to protect themselves and their personal possessions from the company’s legal debts and obligations.
A LLC is made up of one or more owners called members. State law has several requires to form a LLC in Kansas:
- You must pick a name for the business that is not already registered with Kansas Secretary of State;
- You must file Articles of Organization with the Kansas Secretary of State;
- You must choose an agent for service of process (receiving legal notice on behalf of the LLC) who is a resident of Kansas; and
- The business office address for you agent must be the same as the address for the LLC.
Kansas law requires that you include at the end of the business name one of the following words or abbreviations:
- Limited company
- Limited liability company
- LLC; or
To form an LLC in Kansas, you must complete and file an Articles of Organization (articles). You can download the application for the articles from the Kansas government website business page.
The articles must state the following information:
- The name of the company;
- The name of the resident agent for service of process on behalf of the LLC;
- The Kansas street address of the resident agent’s business office;
- The business mailing address to receive official mail from the Office of the Secretary of State;
- The signature of the organizer (person authorized to form the LLC); and
- The date the business officially becomes an LLC (at filing or delayed date)
The LLC can choose whether the business becomes an LLC at of filing the articles or delay the start for a later time.
Limited liability companies generally do not pay federal or state income taxes. They can pass their income taxes obligations to the individual members. The members pay the LLC income taxes on their personal tax returns in the amount of their ownership shares. For example, if an LLC has only two members who own equal shares of the business, each member is responsible for one-half (½) of the LLC income taxes.
You can set up a LLC with just one person and have a single-member LLC. Whether you LLC has one or more member, each member of an LLC enjoys the benefit of owning and manage the LLC without having personal liability for the debts and other responsibilities of the LLC. Under state law, the LLC is separate from its owners. Therefore, the law also protects the LLC from the personal debts and obligations of its members.
A Kansas LLC can continue forever. Kansas law states that a LLC continues even if one of the members dies. When a member dies, his estate or personal representative takes over his interest in the LLC and manages the LLC as if the member is still alive.
If you are the only member of your LLC, you are responsible for all the business income taxes. The income taxes pass directly from the LLC to you, and you must pay it by yourself. If a Kansas LLC that has more than one member, all members must vote and agree for you to transfer your ownership share.
When a member of an LLC has personal debt or legal obligation, his creditor can go to court and get a charging order against the member. The charging order secures payment of the debt and allows the creditor to receive the member’s financial share from the LLC to satisfy the debt. The debtor member is still responsible for his share of the LLC income taxes. The other members of the LLC may have to wait to receive their financial share until after the creditor receives his owed amount from the debtor member.
If you need help forming a LLC, then contact a local Kansas business lawyer today to understand what steps to take and what you need to do to start your business.