This guide for starting an LLC in Hawaii provides step-by-step instructions for filing forms, obtaining tax IDs, setting up company records, and obtaining tax IDs.
The most widely used business structure is the LLC. They are cheap to create, allow for flexibility, and are easy to run. Legally forming an LLC establishes your company, reduces personal liability, and allows for tax flexibility. This guide will walk you through the process step by step.
Step-by-Step Instructions for Hawaii LLC
Verify Name Availability
The legal name of your LLC cannot be confused with any other registered name. Do a name search to find the availability of the name you are interested in.
Name Search Hawaii Business Registration Division Name Reservation Optional Suffix: Limited liability companies must have the name “limited liability company” or “L.L.C.” or “LLC.” “Limited”, “Ltd.,” and “Company” may be abbreviated “Ltd.” A limited liability company’s name must contain letters of the English alphabet.
Register an Agent
Before you file to officially create your Hawaii LLC you need to choose who your Hawaii registered agents will be. A registered agent is the business’s legal representative to receive notices of lawsuits and other legal or government notices.
Each state law requires that every LLC has a registered representative. You must designate the registered agent when you file Hawaii articles with the Hawaii Business Registration Division.
Register Hawaii Certificate of Formation
For limited liability companies, you will need to file the articles.
Agency: Hawaii Business Registration Division Form:
Articles by Organization
Instructions: LLC-1 Instructions LLC-INFO Information for Domestic Limited Liability Company Filing Method Email, fax or online Agency Fee $51 + $25 Optional Express Fee Turnaround: 7-14 days by post 3-5 days by fax or in-person. You can file online and pay the $25 expedite charge in 1-3 days. Law:
Hawaii Statutes, Chapter 428: Uniform Limited Liability Company Act
Establish Company Records
Your LLC must keep accurate and complete books. Your LLC’s initial documents are your filed articles. The LLC will also produce many other official records, such as:
- Minutes from meetings
- Operating agreement
- EIN verification letter
- The LLC may be amended or filed with other entities throughout its life.
The Operating Agreement should be created
The Operating Agreement, which is the governing document for your LLC, can be drawn (or used as a template). It outlines the procedures of how the LLC will be run, including holding an annual meeting. At your organizational meeting, you will review the agreement and vote on it.
The Organizational Meeting will be held
The organizational meeting is the first meeting for members of the LLC. This meeting will require your operating agreement as well as your filed articles. Keep the minutes of this meeting in writing and place them in your company’s record book.
Receive a Federal Employer Identification Number, (EIN).
EINs are required for LLCs that have more than one member and those who hire employees. EINs are often required in order to open a bank account.
Agency: Internal Revenue Service Form:
IRS Form HTML4
Filing Method Mail, phone, or Online. IRS fee $0 Turnaround: You can order online immediately or by telephone. 4 business days by fax. 4-5 weeks by post Notes: The IRS website is not available after hours. Before you close your session, print your EIN. For additional guidance, refer to IRS Public 1635: Understanding your EIN.
Get Hawaii State Tax Identification Numbers/Accounts
Hawaii offers a simplified state tax registration application. This application streamlines the process of opening a Hawaii business by allowing you register for several state tax and employer permits and licenses.
- Submit to:
- Department of Taxation – State of Hawaii
Forms BB-1: State of Hawaii Basic Application
- Filing Method
- Mail or online
Consider Electing C-Corp Taxation / S-Corp Governance
Your LLC is subject to pass-through taxes by default. Most LLCs retain this tax classification. Some LLCs may be eligible for C-Corp or S-Corp tax treatment.
- S-Corp helps owner-employees with more than $75,000 per annum save on self-employment tax.
- C-Corps are subject to double taxation. The corporation pays taxes on profits, and members pay taxes for distributions. C-Corps may offer low tax rates for retained earnings if profits exceed $250,000 per owner.
Apply for Business Licenses & Permits
Licenses and permits are required to legally run your business. You can search for your type of business and the location you live in using the Small Business Administration Business License & Permit Look-up Tool. This will allow you to quickly navigate through the many federal, state, local, and international requirements.
Hawaii Business License
Hawaii does not require general business licensure at the state level.
Hawaii does not have a state-level general business license, but it is often required to obtain local licenses.
For your LLC, you will need to continue filings
You must file tax returns for both the federal and the state governments.
In many states, business entities must file an annual reporting to keep good standing with their secretary of state. For LLCs that were formed in Hawaii, a report must be filed annually. See the table below.
Domestic Hawaii Corporation Annual Report Requirements:
Agency: Hawaii Business Registration Division Form:
D1: Domestic Profit Corporation Annual report
Filing Method Mail or Online. Agency Fee Online filing fee: $12.50, $15 mailing fee Due: Annual reports must not be filed in the quarter following the date of your registration anniversary. For example, if your registration date is February 14th, you will need to file your annual reports between January 1st, and March 31st. You must file your annual report by March 31, June 30, September 30, or December 31. Law:
HI Rev Stat SS 414-472.
Penalties: $100 per month of insolvency. After two years, dissolve. Notes:
- Original signatures do not need to be provided.