Why Start a KY Corporation?
The state offers a range of business incentives, giving businesses in Kentucky a competitive edge. Your corporation may be able to take advantage of these incentives, provided it meets certain qualifying criteria.
For example, the Kentucky Business Investment (KBI) Program tax credits and wage assessments to new and existing industry-specific businesses that locate or expand operations in Kentucky. Projects located in certain counties may qualify for enhanced incentives.
For many entrepreneurs looking to start a larger business, a KY incorporation may be the best choice. As a corporation, your business is able to buy and trade stock, and when it comes to excess profits, corporations offer more flexibility than a limited liability company (LLC). A corporation is allowed to pass income and losses to its shareholders, who report taxes on an individual tax return at ordinary levels.
Is an LLC Better Than a Corporation?
It all depends on your goals. For smaller businesses, limited liability companies are usually a better option. An LLC is easier to set up and receives many of the same benefits as corporations, but with less regulation.
Learn more about forming a Kentucky LLC so you can decide which business entity is right for you.
Benefits of Forming a Kentucky C Corporation
It offers you numerous advantages, including but not limited to:
- The strongest form of liability protection possible by insulating your personal assets and finances from business debts, obligations, damages, bankruptcy or other liabilities
- Several options to create, buy, sell or transfer stock, including publicly
- The ability to issue more than one type of stock
- The ability to raise more funds by issuing more stock
- The ability to sell stock to investors inside and outside the U.S.
Benefits of Forming a Kentucky S Corporation
It offers several advantages similar to those provided by a C Corp including, but not limited to:
- Options for creating, transferring and selling stock, though not as many as a C Corp
- The capacity for up to 100 shareholders
- Simpler rules than those that apply to C Corporations
- Easy transfer of ownership simply by selling your stock
- The possibility of saving money by allowing you to pay less self-employment tax
In this guide, you’ll find information on naming your corporation, getting a Registered Agent, the fees you’ll need to pay, business taxes and much more. We also cover what you'll need to register your corporation and how you'll interact with the Secretary of State in Kentucky.
Start a Business in Kentucky Checklist
To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.
How to Form a KY Corporation Yourself in 6 Steps
Step 1 - Choose a Unique Business Name and Complete a State Business Search
Step 2 - Provide an Official Business Address for Your Corporation
Step 3 - Assign a Registered Agent
Step 4 - File Your Articles of Incorporation with the Kentucky Secretary of State
Step 5 - Get an Employer Identification Number (EIN) from the Internal Revenue Service
Step 6 - Write Your Bylaws
1
Choose a Unique Business Name and Complete a State Business Search
Every Kentucky business must have a unique name that isn't already in use by another business in the state. If you’re having a tough time coming up with a name, try using our Business Name Generator to gather ideas. You'll need to follow a few naming rules, which you can read about in detail on the Kentucky Corporation Names page.
Once you decide on a name, you’ll need to make sure it’s available in Kentucky. To see whether another company in the state is using your desired business name you can use the state's website to carry out a name search. Or, use Incfile's tool to do a Kentucky entity search.
2
Provide an Official Business Address for Your Corporation
All Kentucky corporations must have a designated address. It could be a building where your office is located, your residence address (if you’re running the company from your home), or any physical address of your choice. The address can be outside the state of Kentucky and can be a P.O. Box.
You may also be able to use a virtual mailbox for your business address. Incfile can provide you with a Kentucky virtual mailbox where we'll receive your mail, upload it and scan it for your online review. This can be especially helpful if you run a home-based business and don't want your home address published as part of your business public record.
3
Assign a Registered Agent
Someone who receives official correspondence and is responsible for filing reports with the Kentucky Secretary of State is known as a Registered Agent. Every Kentucky corporation is required to have a Registered Agent.
You may fill this position yourself, assign another manager in your business or use a Registered Agent service. If your Registered Agent in Kentucky is a person, they must have a physical street address in Kentucky and must be available during business hours to accept important documents on behalf of your company. You'll appoint your Registered Agent when you file your Articles of Incorporation with the Secretary of State and formally create your corporation.
All of Incfile’s business formation packages include Registered Agent service. It’s free for the first year and just $119 per year after that. You can also access a digital dashboard to view any document we've received on your behalf.
4
File Your Articles of Incorporation with the Kentucky Secretary of State
Once you've gathered all the information for your corporation, you’ll need to file your Articles of Incorporation with the Secretary of State. This will officially create your business. Here’s what is typically included:
Here’s what is typically included:
- Your corporation name
- The corporation’s capital structure (number of shares to be issued)
- Registered Agent's name and address
- The corporation's principal address
- Name and address of each incorporator
- Signatures of incorporators and registered agent
Your Articles of Incorporation can be filed online via the state's One Stop Business Portal. You can also mail the form to the Office of the Secretary of State, or Incfile can file it on your behalf. The KY Corporation filing fee is $50.
File by Mail
Michael Adams
Office of the Secretary of State
P.O. Box 718
Frankfort, KY 40602-0718
File in Person
Room 154, Capitol Building
700 Capital Avenue
Frankfort, KY 40601
You only need to file your Articles of Incorporation in Kentucky once, but once a year thereafter, you'll also need to file an annual report online via the website that the Secretary of State in KY has provided. Incfile can remind you about this every year, or we can do it for you if you have us handle the paperwork.
What are the fees and requirements to incorporate in Kentucky?
| State Fee | State Filing Time | Expedited Filing Time |
| $55 | 3 Weeks | 1 Business Days |
| State Fee | $55 | |
| State Filing Time | 3 Weeks | |
| Expedited Filing Time | 1 Business Days |
Annual Report
Frequency
Annually
Due Date
Between January 1st and June 30th
Filling Fee
$155
Get an Employer Identification Number (EIN) from the Internal Revenue Service
You'll need an EIN to identify your business to the IRS. You use an EIN for filing and paying taxes, submitting payroll information and payments for your employees and opening a business bank account. You can obtain one directly from the IRS, or Incfile can get one for you as part of the KY corporation creation process.
6
Write Bylaws
A set of rules that govern how a corporation will be run, bylaws detail how many directors the corporation will have, whether the board of directors will have annual meetings and what the voting requirements will be, among other things.
Some states legally require companies to create bylaws, and the state of Kentucky is one of them. That being said, you don't need to file your bylaws with the Secretary of State, simply keep them with your other business records.
It's always a good idea to write and follow bylaws to protect your business from any future changes and events.
Types of KY Corporations
C Corporation
When you file to start a corporation, by default, it's a C Corp. This is the choice for large businesses that will trade shares in the stock market.
A Kentucky C Corporation will offer you several liability protections, but it will also be required to adhere to numerous rules and regulations. It will also likely have a substantial amount of administrative overhead, and won't enjoy as many tax advantages as other corporation types.
Learn more about C Corporations.
S Corporation
Technically, an S Corporation isn't a business entity the way LLCs and C Corporations are. It's a tax filing status. An LLC or a C Corporation can be an S Corporation. It's just a matter of filing a form with the IRS.
The main reason to file as an S Corp is to save money on self-employment taxes. To get an idea of how much money you might save, use our S Corp Tax Calculator.
If you want your Kentucky C Corporation to be treated as a Kentucky S Corporation, file the IRS Election by a Small Business Corporation form, also known as Form 2553 or an S Corp Election form.
Consult with your professional tax advisor or accountant to determine whether this is your best option.
Learn more about S Corporations.
Compare S Corp vs. C Corp to learn the benefits and drawbacks of both, and decide which one will best suit your needs.
Professional Corporation
Some states, including Kentucky, allow certain occupations that deliver Professional Services to form a Professional Service Corporations. Kentucky Revised Statutes, Chapter 274 § 274.005 defines a Professional Service in Kentucky as:
"...any type of personal service to the public which requires as a condition precedent to the rendering of such service the obtaining of a license or other legal authorization and which, prior to the passage of this chapter and by reason of law or a professional code of ethics, could not be performed by a corporation."
Kentucky Revised Statutes, Chapter 274 § 274.005 also specifies a few of the professions permitted to form a Professional Service Corporation in Kentucky, which includes, but may not be limited to:
- Certified public accountants
- Public accountants
- Chiropractors
- Osteopaths
- Physicians and surgeons
- Doctors of medicine
- Doctors of dentistry
- Podiatrists
- Chiropodists
- Architects
- Veterinarians
- Optometrists
- Attorneys-at-law
Show all
Check with the Secretary of State to confirm whether your business should and can be a Professional Service Corporation.
Foreign Corporation
If your business operates in another state and you want to expand into Kentucky — or vice versa — you’ll need to form a Foreign Corporation.
Learn more about Kentucky Foreign Corporation registration.
Nonprofit Corporation
Charitable organizations can incorporate as nonprofit corporations. This means all the profits they generate are donated to the organization supported by the charity, minus administrative costs.
A nonprofit corporation is also exempt from federal and state taxes, allowing more of the profit to benefit the charity.
Note: Everything in this guide applies to for-profit corporations, and mostly to C Corps and S Corps. Items listed as requirements for forming a corporation may or may not also apply to nonprofits.
Limited Liability Company
Depending on the type of business you want to start, or your personal circumstances and goals, an LLC may be a better option for you. For example, you may only want to form a small business that you yourself will run with just a few employees and you may not need the options to buy and sell stock.
A Kentucky LLC is generally a better option for a smaller business. It's easier to set up, but it still offers you certain advantages you'd get from a corporation. You can even have your LLC treated as an S Corporation for tax purposes to save you money.
Regardless of which direction you decide to go, we can help you with your Kentucky business registration.
Learn more about limited liability companies.
Sole Proprietorship or Partnership
These are the simplest types of businesses to set up. That's because there's no real setup to do. If you don't choose to form a separate business entity, by default, you'll have either a sole proprietorship (just you) or a partnership (you and one or more other people).
Neither of these options provide you with any special benefits or liability protections and can leave your personal assets vulnerable. For these reasons, we don't recommend them.
Compare business entity types to decide which one is best for you.
Helpful Resources from the State of Kentucky
More Information in This Guide
You’ll find plenty more insight and guidance on the other pages of this guide, including:
How to search the state business registry and find the right name. Includes information on naming rules, assumed names, reserving names for KY corporations and more.
How to appoint, change and search for Registered Agents. Also includes the duties they fulfill and the rules they’re required to follow.
Details the various fees you’ll need to pay and the state and federal requirements you’ll need to meet. Includes details about Employer Identification Numbers (EINs), state and federal business licenses, annual reports and more.
Covers the various taxes you’ll have to pay to the state and federal governments. Includes details about state taxes such as income and sales and use, and federal taxes such as income and self-employment.
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