A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.
Here are the steps you need to take to form an LLC in Hawaii. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.
Under Hawaii law, an LLC name must contain the phrase “Limited Liability Company” or the abbreviation ”L.L.C.,” or “LLC.” ”Limited” may be abbreviated as ”Ltd.,” and “Company” may be abbreviated as ”Co.”
Your LLC’s name must recognizably different from the names of other business entities already on file with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. Names may be checked for availability by searching the Business Registration Division business name database. You may reserve a name by filing an Application for Reservation of Name with the Business Registration Division. You can file online or by postal mail. The reservation fee is $10.
Every Hawaii LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be an individual who resides in Hawaii, or a domestic or foreign business authorized to transact business in Hawaii. The registered agent must have a physical street address in Hawaii.
An Hawaii LLC is created by filing Articles of Organization For Limited Liability Company with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. The articles must include:
The filing fee is $50. The articles may be filed online or by postal mail.
An LLC operating agreement is not required in Hawaii, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo’s Online LLC. If an operating agreement is created, it need not be filed with the Articles of Organization.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the city in which the business's primary place of business is located (or county if it is in an unincorporated area). For state-wide licensing guidance, see the state of Hawaii's business information website. For more on Hawaii business licenses, see Nolo's article How to Get a Small Business License in Hawaii.
Register with Department of Taxation: In some cases, for example if you will be selling goods and collecting general excise tax or if you have employees, you’ll need to register with the Hawaii Department of Taxation (DOT). You can register either online (through Hawaii Business Express) or on paper (Form BB-1). For more information on state LLC tax registration, see Nolo's article Hawaii LLC Annual Filing Requirements.
All LLCs doing business in Hawaii must file an annual report with the Business Registration Division and pay a $15 filing fee. The report may be filed online or or you may print out the Domestic Limited Liability Company Annual Report form (Form C5) and file by mail. The state will send an annual report reminder to your LLC. The annual report is due during the calendar quarter of the anniversary month of your LLC's formation. For example, if your LLC was formed on July 15, then your report would be due each subsequent year between July 1 and—at the latest—September 30. An annual report is not required to be filed in the year the domestic LLC was organized. For more details on Hawaii's annual report requirements, see Nolo's article Hawaii LLC Annual Filing Requirements.
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
To do business in Hawaii, all LLCs organized outside the state must register with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. Foreign LLCs must appoint a registered agent for service of process physically located in Hawaii. To register, file an Application for Certificate of Authority (Form FLLC-1).
The completed application must be accompanied by a Certificate of Existence from the foreign LLC’s home state, dated no more than 60 days prior to the filing of the certificate.
The filing fee is $50. The form may be filed online or by mail .