Are you looking for steps on how to start an LLC in Hawaii? You’re in the right place. Hawaii offers a balanced lifestyle, with locals enjoying post-work surf sessions. Starting a business in Hawaii can be promising for entrepreneurs with great concepts and work ethics. Consider setting up an LLC for tax and legal benefits. Check out our complete guide to start your LLC in Hawaii. Read on for the details.
Starting an LLC in Hawaii includes the following steps:
#1: Name Your Hawaii LLC
#2: Hire a Hawaii Registered Agent
#3: File Your Certificate of Organization
#4: Receive a Certificate From the State
#5: Create Your Operating Agreement
#6: Get Your EIN
#7: File Hawaii LLC Annual Report
1. Name Your Hawaii LLC
To register your LLC in Hawaii, you’ll need to adhere to specific naming requirements:
- The name must include “Limited Liability Company,” “LLC,” or “L.L.C.”
- Ensure the name is not already in use within the state. You can search and verify the name availability on the Secretary of State’s website.
- Avoid using words reserved for government agencies and consider additional documentation for restricted words like “bank” or “lawyer.”
Refer to the official guidelines for more details on Hawaii’s naming rules.
Reserve Your NC LLC Name
After selecting an available name, you can reserve it if you’re not ready to proceed with the filing. This involves submitting a name reservation application and paying a $10 fee to the Department of Commerce and Consumer Affairs. The application, typed or written in black ink, should include details such as the type of business, the applicant’s name and address, the intention to form a domestic or foreign business, and the name to be reserved.
Additional Consideration:
URL Availability: When starting your business, it’s crucial to check the availability of your domain name, just as you would check for the availability of your business name. Popular domain search engines like GoDaddy or HostGator offer free domain name searches. Once you find an available domain name that aligns with your business and isn’t already taken, purchase it. Domain prices typically range from 99 cents to $49.99, with premium names possibly priced in the thousands. Choose a domain name that suits your business plan and secure its registration.
2. Hire a Hawaii Registered Agent
In Hawaii, every LLC must have a designated “registered agent,” providing a contact and physical address for legal document delivery during business hours. A registered agent can be an individual (including yourself or an employee of your LLC) or a company providing registered agent services. They must meet the following criteria:
- Companies must offer registered agent services.
- The agent must have a physical address in Hawaii.
- The agent must be present and available to accept documents during regular business hours.
3. File Your Certificate of Organization
To establish a Hawaii LLC, you must submit the Articles of Organization to the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. It should contain:
- The Hawaii LLC’s name
- The Hawaii LLC address
- The name and address of the registered agent
- The names and addresses of all the organizers
- The LLC’s duration (if not perpetual)
- A statement regarding the LLC’s management by members or managers
- The names and addresses of the LLC’s initial managers (for Manager-managed LLCs) or initial members (for Member-managed LLCs)
- A statement regarding the members’ liability for the company’s debts and obligations
- Signature of the LLC’s organizer
The filing fee is $50, and the articles can be submitted online or by mail.
4. Receive a Certificate From Hawaii State
Upon filing and approval of the LLC’s documents, the state will provide a certificate confirming the formal existence of the LLC. This certificate enables the LLC to acquire an Employer Identification Number (EIN), business licenses and open a business bank account.
5. Create Your Operating Agreement
An operating agreement explains how your LLC will run its operations.
While filing an operating agreement isn’t mandatory in Hawaii, it’s crucial for your business. A written operating agreement helps settle disputes related to finances and potential legal issues. Without such an agreement, courts make decisions based on state law, which may not always be in the LLC’s and its members’ best interest.
The operating agreement can cover various important details:
- LLC’s name and main address
- Duration of the LLC
- Name and address of the registered agent
- Information about the articles of organization
- Business purpose
- Member details and their contributions
- Profit and loss sharing
- Protocol for adding or removing members
- LLC management
- Legal protection and responsibility clauses
6. Get Your EIN
If your LLC has multiple members, it needs to have its own IRS Employer Identification Number (EIN), regardless of whether it has employees. For a single-member LLC, you only need to get an EIN if you plan to have employees. Apply online through the IRS website, and there’s no filing fee.
After obtaining the EIN, retaining a copy of the official document in the company’s record binder and other essential paperwork is necessary.
7. File Hawaii LLC Annual Report
The mandatory annual report for Hawaii LLCs informs the state that your business is operational and fulfilling its responsibilities. The filing deadline depends on the LLC’s effective date:
- LLCs established between January 1 and March 31 must submit reports by March 31 for the year ending January 1.
- LLCs established between April 1 and June 30 must file reports by June 30 for the year ending April 1.
- LLCs established between July 1 and September 30 must submit reports by September 30 for the year ending July 1.
- LLCs established between October 1 and December 31 must file reports by December 31 for the year ending October 1.
- Whether the company is member-managed or manager-managed (if manager-managed, include the total number of members)
The filing fee is $15, and the reports should include the following details:
- Company name and mailing address (including any changes)
- Principal office address (including any changes)
- Nature of business (optional)
- Name and address of the registered agent
- Whether the company is member-managed or manager-managed (if manager-managed, include the total number of members)
- Title, name, and address of managers or members
Failure to submit the required forms can lead to the automatic dissolution of your LLC, necessitating reinstatement with additional fees. To avoid automatic dissolution, stay vigilant about your annual deadlines.
LLC State Guides
FAQs About How To Start an LLC in Hawaii
Is a single-member LLC allowed in Hawaii?
Yes, Hawaii does allow the formation of a single-member LLC within the state. If you anticipate having employees or intend to file taxes as a corporation or S-corp, obtaining an EIN (Employer Identification Number) is important.
What is the average processing time for establishing an LLC in Hawaii?
Forming an LLC in Hawaii can take up to 14 business days. However, this process can be expedited by filing online, reducing the processing time to just three to five business days. Additionally, new business owners can pay a $25 fee to expedite the processing to one to three business days for an even quicker turnaround.
What is the taxation structure for LLCs in Hawaii?
In Hawaii, LLCs usually function as pass-through entities, transferring the tax burden to the individual company owners (members). However, there is an option to elect to be taxed during the tax filing process.
What is the cost of forming an LLC in Hawaii?
Forming an LLC in Hawaii costs $50 for the Articles of Organization and a $10 fee to reserve an LLC name. Other options for LLC formation include self-filing or utilizing online services, each with varying associated costs.
Do I need a business license to operate in Hawaii?
The need for a business license in Hawaii varies depending on the type of business and its location. Local and state-specific licenses may be required. For local licensing inquiries, it’s advisable to consult the city or county where the business operates. You can find state-wide licensing guidance by visiting the official website of the State of Hawaii’s business information department.
