Running a Business in Kentucky Task List

The following list is meant as a guide for most Kentucky small businesses. Additional requirements may exist depending on the nature of the business and the goals of the individual entrepreneur. This list is intended to provide an overview of the common issues and legal requirements to run a business but is no substitute for customized legal advice.

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There are a variety of federal, state, and local laws that apply to running a business. Our firm has a grasp on the laws relevant to Kentucky small businesses and also some of the practical issues entrepreneurs face. The following is a list of both legal and practical steps most entrepreneurs will need to take along with links to external sites for more information and specific legal services offered by our firm. For added usefulness, we indicate the degree to which a particular step is necessary to run a Kentucky business (sometimes necessary; frequently necessary; always necessary).

Task List

  1. Unemployment Insurance Quarterly Report – Quarterly (always necessary)
    • Task: A subject employer that is liable to pay unemployment tax must file a report for each calendar quarter listing all employees and wages paid. Unemployment tax is calculated based on the payroll, and the employer will be responsible for paying the tax. Reports and payments are due by the last day of the month following the end of each quarter the tax is payable (e.g., a report for the first quarter, January – March, is due by April 30th). 787 KAR 1:220 § 1.
    • Filing fees: There is no fee for submitting a report but penalties between $25 and $100 are assessed for not filing a report when due. KRS 341.262. Additionally, the business may be restrained from operating until the report has been made. KRS 341.265(1).
    • Relevant form: The employer may file the quarterly report online if it has already registered with the OET and must file online if it has 10 or more employees. 787 KAR 1:220 § 2(2).
    • Additional information: If the employer has already registered with the OET, such payments may be made online.
  2. Annual Report – Yearly (always necessary)
    • Task: “All corporations (profit, non-profit & professional service), limited liability companies (profit, non-profit & professional service), limited partnerships (filed under 2006 Act), limited liability limited partnerships (filed under the 2006 Act), and business trusts that are registered with the state, are required to file an annual report… All business entities required to file an annual report, receive an annual report postcard annually in January. Businesses have from January 1 through June 30 of that year to return the card to the Office of the Secretary of State.” Kentucky Secretary of State – Annual Reports. Both domestic and foreign business entities are required to file annual reports.
    • Filing fees: $15 for each Annual Report. KRS 14A.2-060(2).
    • Relevant form: The annual report will be mailed to the principal office address and then may be returned by mail to the Secretary of State. Alternatively, the Annual Report may be filed online.
    • Additional information: Failure to file an Annual Report by June 30 of the relevant year causes the Secretary of State to make the entity inactive and in bad standing. Failure to file by November 1 of the relevant year will result in either administrative dissolution or revocation of authority. KRS 14A.7-010(1)(a).
  3. Federal Taxes – Monthly/Quarterly/Annually (always necessary)
  4. State Taxes – Monthly/Quarterly/Annually (always necessary)
    • Kentucky business taxes include the corporate income tax, pass-through entities tax, limited liability entity tax, and sales and use tax. Businesses with employees are expected to withhold a portion of employee wages to be remitted to the state as employment taxes.
    • Links:
  5. Tangible Property Taxes – Yearly (always necessary)
    • Task: Businesses which own or lease tangible (“personal”) property as of January 1 are required to file a tax return with the County Property Valuation Administrator (PVA) listing the value of such property by May 15th of each year. After receiving the receipt, the PVA and the Kentucky Department of Revenue will have a tax bill mailed to the business based on the value of the tangible property reported.
    • Filing fees: There is no fee for submitting the return but penalties and interest are assessed for failure to mail (postmark) the return by the due date.
    • Relevant form: Tangible Personal Property Tax Return, Form 62A500
    • Additional information: Tangible property includes office furniture, equipment, fixtures, machines, raw materials, inventories, and other personal items with value or utility. Personal Property Assessment and Taxation.
  6. County Business License Taxes – Monthly/Quarterly/Annually (always necessary)
    • After a business receives its business license, it will pay county taxes on business profits earned and wages paid within the county. Such taxes are paid in similar fashion to state and federal taxes.
    • In Lexington/Fayette County, the Division of Revenue provides forms which assess the tax liability for each business that has secured a business license. Employee wages must be withheld and paid quarterly or monthly (depending on the amount of compensation paid) and net profits must be paid annually. Other counties operate similarly.
  7. Renew Assumed Business Name – Every 5 Years (sometimes necessary)
    • Task: “An assumed name shall be effective for a term of 5 years from the date of filing and may be renewed for successive terms upon filing a renewal certificate within 6 months prior to the expiration of the term, in the same manner of filing the original certificate…” KRS 365.015.
    • Filing fees: $13 for Sole Proprietorship. KRS 64.012(1)(a). $23 for all other entity types. KRS 365.015(11).
    • Relevant form: Certificate of Renewal of Assumed Name
    • Additional information: The filing must be made with both the Kentucky Secretary of State and the County Clerk where the entity maintains its Registered Agent for service of process or its principal office.
    • We offer this legal service. Please see our page on Assumed Business Name for more information.
  8. Amend Business Formation Document (sometimes necessary)
    • A business may undergo certain changes that require or make it advantageous to amend its Articles of Incorporation, Articles of Organization, or Certificate of Limited Partnership. The document may be amended, restated, or both, but in all cases the amendment must be properly adopted by the business owners, an appropriate filing must be made with the Kentucky Secretary of State, and the document must be recorded with the County Clerk where the business maintains its Registered Agent. Articles of Amendment must comply with the statutes applicable to the particular business entity type. Kentucky Secretary of State – Business Changes.
    • We offer this legal service. Please see our page on Amend Business Formation Document for more information.
  9. File Changes to Registered Agent, Registered Office, and/or Principal Office (sometimes necessary)
    • “Every corporation formed or doing business in Kentucky is required by law to maintain a registered agent and a registered office in Kentucky upon whom process (such as summons and subpoenas) may be served.” Kentucky Secretary of State – Business Filings. The business’s principal office address must be kept on file and updated in the Secretary of State’s records. If any of these designations are changed, such changes must be filed with the Secretary of State and with the County Clerk where the entity’s registered office is located.
    • We offer this legal service. Please see our page on Change of Registered Agent, Registered Office, or Principal Office for more information.
  10. Change Method of Federal Taxation (sometimes necessary)
    • There are a variety of business entity types (corporation, LLC, limited partnership, etc.), some of which having different tax options. A business owner may submit a filing with the IRS to change the default method of federal taxation for his or her business entity. For instance, an LLC could be taxed as C-Corp while a corporation could be taxed as an S-Corp. In some circumstances a business may reduce its tax liability by switching between the available taxation methods.
    • We offer this legal service. Please see our page on Federal Taxation Method for more information.
  11. Business Reorganization: Conversion, Merger, Asset Purchase, etc. (sometimes necessary)
    • Occasionally a business will find it advantageous to reorganize or otherwise combine itself with other businesses or other business assets. Conversion allows a business to change its entity type. Merger and consolidation combine two or more businesses into an existing business or a newly-formed organization, respectively. Share exchange allows a business to acquire shares of another corporation. Asset purchase allows a business to merely purchase select assets from another business, generally avoiding all liabilities from the selling business. There are strengths and disadvantages to each method of reorganization, internal procedures required to approve the transaction, and filings required to evidence the business alteration.
    • We offer this legal service. Please see our page on Business Reorganization for more information.
  12. Obtain a Certificate of Existence (sometimes necessary)
    • A certificate of existence (AKA a certificate of good standing) issued by the Kentucky Secretary of State “may be relied upon as conclusive evidence that a domestic corporation or domestic limited liability company is in existence…” Kentucky Secretary of State – Business Records. Assuming the business entity is in good standing, the certificate will state the entity’s real name, that the entity was organized in Kentucky, the date it was organized, that it has not been dissolved or cancelled, that all taxes and fees owed to Kentucky have been paid, that its most recent annual report has been filed, etc. KRS 14A.2-130(2). Anyone may request a certificate of existence for a business entity. KRS 14A.2-130(1).
    • To obtain a certificate, type the business entity name into the Kentucky Secretary of State’s Business Organization Search. At the top under the “Certificates” menu click “Certificate of Existence / Authorization.” Enter your credit card information and click “Pay for Certificate” to have it instantly display online. The cost is $10. KRS 14A.2-060(1)(n).
  13. Obtain Certified Copies of Documents Filed with the Kentucky Secretary of State (sometimes necessary)
    • The Kentucky Secretary of State provides certified copies of any document filed in its office. “A certificate attached to a copy of a document filed by the Secretary of State, bearing the Secretary of State’s signature and the seal of the state, is conclusive evidence that the original document is on file with the Secretary of State.” Kentucky Secretary of State – Business Records.
    • The Secretary of State charge a $5 copy fee per document requested for the first 5 pages and $0.50 per page thereafter, plus $5 for the certification itself. KRS 14A.2-060(4). To request documents, complete and submit the official Request for Corporate Documents form.
  14. Register a Copyright (sometimes necessary)
    • Copyright law protects original works of expression, formally published or not, that have been written down, typed, recorded, drawn, etc. Business owners may benefit from copyright registration of their advertisements, website content, publications/newsletters, and other original content.
    • By registering the work with the U.S. Copyright Office, the author may enforce his or her rights through a copyright infringement suit and receive statutory damages and attorney’s fees. 17 USC 412. The copyright will last for the length of the author’s life plus 70 years after the author’s death. 17 USC 302(a).
    • We offer this legal service. Please see our page on Copyright for more information.
  15. Dissolve the Business (sometimes necessary)
    • Sometimes a business must end operations due to unprofitability, disagreements among owners, etc. Should this be necessary, the business must formally end its existence by dissolving. If properly done, this will eliminate continuing liability its owners otherwise would face by simply abandoning the business.
    • The dissolution process involves a consent/resolution to dissolve by its owners, providing notice to known and unknown creditors of the business of its termination, and the filing of Articles of Dissolution with the Secretary of State, among other tasks. The exact steps vary by entity type.
    • We offer this legal service. Please see our page on Business Dissolution and Reinstatement for more information.

 

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