Believe it or not, Hawaii has a sustainable business ecosystem that attracts many entrepreneurs. However, like any other state, its government imposes mandatory formation and yearly expenses to operate legally within its jurisdiction. In this post, our business experts will guide you in accomplishing all Hawaii LLC annual fees to make the legwork easier for you.
Formation Costs for a Hawaii LLC
Business Name Reservation
Any businessman knows that selecting a name fit for your company is among the many steps you must take when forming an LLC. Typically, you can take a claim of an available LLC name through filing your articles of organization. However, if you’re not yet ready to face the paperwork, you can opt to reserve your desired label.
In Hawaii, you can reserve a business name by filing online or mailing a paper application. This procedure will cost you a $10 fee. Despite its advantages, our resident entrepreneurs still advise you to file your articles of organization if you don’t have any time constraints to reduce unnecessary expenses.
Articles of Organization
Without filing your articles of organization, the state won’t be able to verify your business details nor recognize your company as a legally operating entity. This submission includes basic information about your business and details of your LLC members. It’ll cost $50 for regular filing and $75 for expedited processing.
Operating Agreement
Crafting an operating agreement by yourself does not entail any charges. However, considering the management provisions and ownership details included in this internal document, our business experts highly suggest seeking the assistance of legal professionals to avoid lapses and conflicts in the long run.
EIN Registration
When applying to register your LLC, part of your responsibility as a business entity is to get an Employer Identification Number [1]. This nine-digit code is often asked when paying taxes to the state, hiring employees, and opening a company bank account. You can obtain it for free from the IRS.
Registered Agent
Before you decide to apply as a registered agent to your LLC, you should know that this role entails being the state’s primary contact. This obligation means managing all time-sensitive mails that may cause penalties when not handled properly.
If you’re not up for the job, you can choose to hire a service provider to act as your resident agent to ensure efficient handling of documents and lessen the chances of non-compliance. These companies offer service packages ranging up to $300.
Business License/s
Besides submitting your articles of organization, companies offering professional services need to present specific licenses before being officially allowed to operate. This requirement will depend on the nature of your business, so it’s best to check the state’s licensing condition before anything else.
Other Taxes
Paying your taxes is one of the most crucial Hawaii LLC annual fees you must settle to keep your business operating legally. This state implements a pass-through policy to all the limited liability companies under its jurisdiction, so you’re not obliged to submit any corporate tax return.
Hawaii also doesn’t impose franchise taxes on businesses, making it highly desirable for new entrepreneurs. However, all LLCs are obliged to pay General Excise Taxes, which impose a 4% levy on your gross business income.
Besides that, there are business-specific taxes you may need to pay depending on the transactions your company engages in.
Foreign LLC Registration
Instead of submitting organization articles, a foreign LLC must file an Application for Certificate of Authority and pay a $50 fee to obtain rights to operate in Hawaii. You can accomplish this submission online or via mail.
LLC Formation Services (Optional)
Without a doubt, running a business is quite laborious. That’s precisely why many businesses hire LLC formation services to handle all the registrations and paperwork for them.
If you choose to do this, you’ll have to pay service fees ranging up to $300, depending on the inclusions of your purchase. No worries though, rest assured that they’ll handle your submissions accurately and swiftly.
Hawaii Annual LLC State Fees
Annual Report
You’re obliged to file an annual report to the Department of Commerce and Consumer Affairs in the same quarter when your LLC was formed. This process will cost you $12.50 for online submission or $15 for in-mail filings.
Overall Costs
Considering the filing of your registration documents, required taxes, and annual report submission, the minimum cost estimate an LLC needs to pay is around $62.50. This excludes business-specific taxes and licenses.
FAQ
Do LLC pay taxes in Hawaii?
Yes, LLCs pay taxes in Hawaii. All business entities operating under its jurisdiction must pay a General Excise Tax, which includes 4% of your gross business income.
Conclusion
Right about now, you may think that accomplishing your Hawaii LLC annual fees seems like arduous legwork to handle. However, no matter where you decide to form a business, every state will require similar costs and procedures. If you find yourself overwhelmed with the process, our experts highly recommend seeking assistance from professional services.
If you want to know the LLC formation costs and fees in other locations, we have our list below:
