Kentucky Startup

The first step in forming a Kentucky startup is determining which type of business to form. This page gives an overview of some of the main business startups you can form in Kentucky: assumed name, S corporation, C corporation, LLC, nonprofit corporation, or foreign corporation.

Kentucky Assumed Name

Individuals, corporations, LLCs, and other types of businesses must file a Certificate of Assumed Name in Kentucky if they are doing business under a name other than their legal corporate or individual name. (An Assumed Name is known in other jurisdictions as a DBA or Fictitious Name.)

Incorporate in Kentucky

To incorporate in Kentucky, a business must file Articles of Incorporation. These documents must include the following information:

  • Corporate name
  • Amount of authorized shares
  • Registered office address
  • Mailing address, which may or may not be the same address
  • Incorporator's name and address

Forms are provided by the Business Services Division.

There are two types of tax classifications that a for-profit corporation can select: C corporation and S corporation. Both are for-profit corporations; the distinction is in the way each is taxed by the IRS.

C Corporation

A C corporation is the default tax classification; a for-profit Kentucky corporation will become a C corporation when its Articles of Incorporation have been filed, which means that there is a corporate tax on company income before that income is distributed to shareholders and owners—at which point it is taxed again on the individual level. This is known as double-taxation.

Why would anyone want to be taxed twice on purpose? A C corporation is the least restrictive of the two types as far as ownership: the shareholders and owners of a C corporation are not required to be US citizens, nor is there a limit on the number of people who may own stock in the corporation.

Additionally, a C corporation might own stock in another corporation; it may also have shareholders that are themselves other corporations.

S Corporation

After incorporation, a corporation may send in IRS Form 2553 and elect to be taxed as an S corporation; this eliminates the corporate tax on income, and the shareholders and owners will pay an individual income tax only.

But an S corporation has a few restrictions that a C corporation does not: there can be no more than 100 shareholders, and those shareholders must be US citizens or residents. Corporations cannot act as shareholders of an S corporation, nor can an S corp own stock itself.

Kentucky Foreign Corporation

A foreign corporation in Kentucky is one that has already registered as a corporation in another state (its domestic state) but has registered to do business in Kentucky as well. Registration as a foreign corporation is required; a business may not conduct its business in the state without first obtaining permission from the Secretary of State to do so.

Kentucky LLC

A Kentucky LLC is a different type of business that, like a corporation, provides limited liability to its owners. An LLC is not recognized as a federal tax classification; it will elect to be taxed by the IRS as a partnership, corporation, or individual.

To form an LLC, a business must file Articles of Organization (the LLC version of Articles of Incorporation) with the Business Filings division.

Kentucky Nonprofit Corporation

A nonprofit corporation is one that does not sell stock and operate for the benefit of its stockholders. Certain nonprofits that are organized for specific purposes, such as literary or educational purposes, can elect to be recognized as a 501c3 by applying to the IRS.