In order to start a corporation in the state of Kansas, you must follow a few steps. You’ll need to start by naming your corporation, determining what share structure is best for your company as well as appointing a few key members within your organization.
Thereafter, you’ll need to file the Articles of Incorporation with the Kansas Secretary of State. The following step-by-step guide will show you how to form a corporation in Kansas.
1. Select a name for your corporation
Deciding on a name for your Kansas corporation is the first step in the process. You should note that the business name must be unique and comply with Kansas corporation naming requirements.
General corporate name guidelines
Adhere to the following business naming guidelines when deciding on your Kansas corporation name:
- In the event that you’re forming a public benefit corporation, one of the following terms must be included in your corporation name: public benefit corporations, PBC, or P.B.C.
- Your Kansas corporation name should not mislead the public into believing that you are affiliated with any government agency. Therefore do not include words such as Treasury, FBI, State Department, etc.
- Your Kansas corporation name must be significantly different from any other existing business in the state
- Unless your Kansas corporation is a savings and loan association, bank, public benefit corporation, or savings bank, the following words or abbreviations must be included in the business name:
Fund, foundation, club, corporation, company, college, church, association, institute, Inc., university, union, society, limited, syndicate, Co, Corp., Ltd, or Inc.
The Kansas state statute provides more information and guidelines on naming a corporation based in Kansas.
As your Arkansas corporation grows, you’ll want to protect your business name from intellectual property theft or misuse. You can kick start this process by trademarking your Kansas corporation name on the US Patent and Trademark Office’s website. While the entire process may take several months, the application process is fairly quick.
Your Kansas corporation entity name is the legal or official name of the business. This is a name that you use to sign your company’s documents, file lawsuits, file tax returns, and submit applications to the bank.
DBA (Doing-business-as) name
If you want to do business on another name aside from your legal entity name, then you need to register the secondary name. The secondary name is also referred to as a DBA or “doing business as” name.
There is no formal process for registration of a DBA at the state level in Kansas, so registration must be done at the local or county level. Feel free to contact the local county clerk in the county where your corporation is registered to determine how you should go about processing a DBA.
You may search the Kansas database to check if the DBA name you’re considering is still available or is in use by another business entity in the state.
2. Nominate a registered agent
The registered agent is an individual or entity that’s responsible for accepting legal documentation, service of process, and other government correspondence on your corporation’s behalf. The registered agent must have a physical address in the state of Kansas, also referred to as the registered office.
Additionally, the following guidelines apply when selecting a registered agent:
- The registered agent’s business address must be the same as the registered office address
- The Kansas agent must maintain availability during normal business hours to ensure that they are able to accept all legal documents on the corporation’s behalf
- The registered agent must be a resident of Kansas, alternatively a business that is authorized to transact business in the state
- The Kansas corporation may act as its own registered agent
3. Appoint initial directors at the organizational meeting
The next step in the process of forming a Kansas corporation is holding an organizational meeting. During this organizational meeting, you’ll need to complete a few necessary steps such as creating and approving bylaws, selecting initial directors, executing an incorporator’s statement, and determining your company’s share structure.
One of the most important steps in this process is specifying directors. Corporate directors implement and establish corporate strategies and policies. Therefore, the board of directors has a duty to the corporation, including its shareholders, to always act in the corporation’s best interest.
Your Kansas corporation needs to nominate at least one director who oversees the operations of the corporation until the first organizational meeting of shareholders. The corporate director is also in charge of selecting corporate officers for your corporation.
Additionally, you’ll need to nominate an incorporator who is responsible for submitting the Articles of Incorporation. Every Kansas corporation needs to have a minimum of one incorporator.
4. File Articles of Incorporation
Filing the Kansas Articles of Incorporation, also called the Certificate of Incorporation officially and legally sets up your corporation in the state. Therefore, the Articles of Incorporation must include some pertinent information regarding the corporation, including:
- The number of authorized shares the corporation is allowed to issue
- Tax closing month
- The street address and name of the corporation’s registered agent
- The address and name of the business itself
- A statement of purpose
- The physical address and the names of directors
- The physical address and names of incorporators
- The effective date as well as the duration of the corporation
Kansas Office of the Secretary of State
Memorial Hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612-1594
5. Create and approve bylaws
While bylaws are not filed with the Secretary of State, they are your company’s operating procedures and internal rules. Therefore, they are necessary.
When compiling and approving bylaws, keep the following in mind:
- The directors or incorporators must meet it to adopt the corporate bylaws
- The bylaws cannot include anything that is not consistent with the law or the Articles of Incorporation
- The bylaws may contain any type of provisions for managing the corporation’s affairs and business
Additionally, your corporate bylaws must include the following information:
- The fiduciary duties to the company
- The process of negotiating contracts
- The date of the annual shareholder meeting
- The process for adding and amending bylaws in the future
- The process of handling company disputes
- Disclosure of how corporate records will be stored and managed
- The process of holding annual meetings, voting procedures as well as electing directors and officers
- The process of governing the corporation
- The roles and responsibilities of officers and directors
6. Select a share structure
The next step is deciding on a share structure and strategy for your Kansas corporation. The unit of ownership of incorporation determines a share of stock. Therefore, a percentage of ownership of the company is represented by each share of stock.
So if your corporation decides to issue stock or one share of stock to an individual, that person is known as a shareholder or stock owner. Additionally, that person owns 100% of the corporation.
Shares are often structured into classes, and each class is termed a share class which holds a different set of privileges and rights. A corporation is allowed to have multiple classes holding any number of shares.
7. Obtain an EIN
Another important step in forming a corporation in Kansas is applying for an EIN or Employer Identification Number. The EIN is a unique identifier used by the Internal Revenue Service to identify a company, irrespective of business structure.
Additionally, obtaining an EIN is advantageous as it allows business owners to open up financial or corporate bank accounts, serves tax purposes and is necessary when hiring employees for your company.
One of the quickest ways to apply for and obtain an EIN is to use the Online EIN Assistant on the IRS website. The application process is completely free of charge. Alternatively, if you would prefer to download the EIN application Form, feel free to complete it and then mail it to the address below:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
8. File Kansas state taxes
The following corporate taxes may be due by your Kansas corporation depending on the type of corporation you’ve formed:
- Corporate income tax: Kansas corporations are liable for Kansas corporate income tax. The tax rate is a flat 4%, with an additional 3% surtax on income over $50,000.
- Kansas sales tax: You need to register for a seller’s permit if you are selling a physical product in the state. Register for sales tax with the Kansas Department of Revenue’s website. In doing so, you’ll receive a certificate that allows your business to collect sales tax on taxable goods.
- Kansas employer tax: If you plan to hire employees for your corporation, you need to register for Kansas employer taxes with the Kansas Department of Labor’s website.
9. Kansas business licenses and permits
Prior to legally conducting business in the state of Kansas, you may need to obtain certain licenses and permits. The specific license and permits that you need depend on your type of business or corporation’s business activities as well as where it is located.
Some common registration requirements include:
- Business license: Kansas does not have a general business license. That said, you may need to register for one or more business licenses, depending on the city where you’re conducting business.
- Business tax application: Your corporation will need to register for a business tax license with the Kansas Department of Revenue. The business tax application is necessary for the registration of certain licenses, such as withholding tax, sales tax, and others.
- Professional licensing: If you plan on offering services such as bakeries, contractors, kennels, bed-and-breakfast, etc., then you may need a professional license to legally operate in the state.
10. Annual report requirements in Kansas
Arkansas corporations must file the Kansas corporation annual report every year with the state’s office. The annual report needs to be filed on the 15th day of the fourth month, following the end of your corporation’s tax year.
Every new Kansas corporation is required to file an annual report if they submitted the Articles of Incorporation six months or more before the end of the tax year. Alternatively, you may wait until the following year to file your first annual report.
Annual reports also may be filed online with the Kansas Business Center.
11. Costs of starting a corporation in Kansas
The filing fees below apply to all Kansas corporations:
- Name reservation: $30
- DBA name: $10 – $100 (varies based on county)
- Articles of Incorporation: $85
- Annual report: $55
- Kansas Certificate of Good Standing: $10
Next steps after forming a corporation
After forming your Kansas corporation, the steps below will help you streamline your new business.
Set up a corporate records book
Your Kansas corporation’s corporate records book is basically a hard copy of your critical corporate documents. Here, you need to store your Kansas Articles of Incorporation, stock certificate ledger, bylaws, stock transfer documents, meeting minutes, and more. The corporate record books should be stored at your business’s principal location.
Open a corporate bank account
Since your Kansas corporation is a separate legal entity, you’ll need to create a corporate bank account for your company. This also helps to separate your personal expenses from your professional ones. Additionally, it simplifies your accounting processes as well as business tax filing. In order to open up a corporate bank account, you’ll need to provide your Employer Identification Number as well as your corporation’s formation documents, like the Articles of Incorporation.
A C corporation or a C Corp is a corporation that’s taxed separately from its owners. Alternatively, a limited liability company or LLC is a legally separate business from its owners, who are also known as members.
A general partnership involves two or more people that share profits and losses in the company and combine resources for the business. A sole proprietorship only has one owner with unlimited liability for the business.
Liability protection protects your business from property damage, personal injury, etc. Additionally, personal liability protection insurance protects your personal assets.
Professional corporations are corporations that offer services like accountants, lawyers, dentists, pharmacists, therapists, engineers, physicians, etc. They need to obtain a professional license prior to offering their services in the state.
Double taxation occurs when you register your corporation as a C corporation. This is when income taxes are paid twice on the same source of income and is referred to as double taxation.