Starting an LLC in Hawaii is Easy
You can get a Hawaii LLC (Limited Liability Company) yourself by registering the Articles of Organization with the Department of Commerce and Consumer Affairs. The cost of Hawaii LLC Registration is $51.
Follow our free How to Start an LLC in Hawaii guide below to get started.
If you are thinking about hiring a professional service to set up an LLC, read our Best LLC Services review.
Step 1: Create A Name For Your Hawaii LLC
First off, in order to launch a successful Hawaii LLC, you need to give it the right name. Your business name needs to be catchy for branding purposes and legitimate for legal purposes. We go into depth on this topic in our LLC naming guide, but we’ll go over the legal basics below.
Legally, your business name must:
- Contain the words limited liability company, limited company, or the abbreviation LLC or L.L.C.
- Not contain words like financial institution, bank, banker, banking, or savings bank unless you’ve gotten approval from the Hawaii commissioner of financial institutions.
- Be distinguishable from any other entity or trade name registered in Hawaii.
If you’re having trouble coming up with a name that captures your brand, don’t let that stop you from forming your LLC. For now, you can focus on the legal requirements and consider applying for a trade name after you’ve nailed down your branding.
What To Do:
Once you’ve decided what you’d like to call your LLC in Hawaii, do a business name search to find out whether or not it’s in the cards. If your business name is available, you’ll be able to lock it down when you file your Articles of Organization.
Need help naming your LLC? Check out our LLC name generator to find the best name for your LLC. After you get your business name, your next step is getting a unique logo. Get a logo with our free small business logo maker to make a logo yourself! No design experience necessary!
Quick Note: Before you commit 100% to a name, you should see if there’s a decent URL available. Use GoDaddy to search for your options. If there’s a quality domain name for purchase, we advise buying it right away because even if launching a business website isn’t on your radar right now, it’s going to be soon.
Step 2: Appoint A Hawaii Registered Agent
When you file your Articles of Organization, you will be asked to appoint a Hawaii registered agent.
Your registered agent will be responsible for receiving important legal documents like tax forms and service of process notices on behalf of your LLC. Your registered agent can be an individual resident of the state or a company that’s legally authorized to represent businesses in Hawaii.
Hawaii does give you the option to act as your own registered agent, but many business owners choose to appoint a professional instead. Here are a few things to think about before you decide to act as your own:
- You’ll have to maintain normal (9 am - 5 pm) business hours at the address you provide.
- If you run your business from home, you’ll be required to make your personal address public.
- You must keep up on important notices, dates, and deadlines.
- You could be served in front of your family or coworkers.
What To Do:
If you’re considering acting as your own registered agent, do some research, starting with our registered agent guide. If you decide you’re up for the task, go ahead and list your own name and address on your Hawaii Articles of Organization.
If you’re leaning toward hiring a professional, we recommend using an LLC formation service as your registered agent. Many registered agent services offer up to one year of registered agent service free when you form your Hawaii LLC with them.
Step 3: File the Articles Of Organization
Now that you’ve decided on a registered agent, it’s time to officially form your LLC! The last step is to file your Hawaii Articles of Organization with the Department of Commerce and Consumer Affairs. You can do this on your own, with the help of a lawyer, or through an online LLC filing service.
What To Do:
If you choose to complete this step on your own, you can download the form or work through the state's online portal to legally register your LLC. There is a $50 filing fee. If filing a hard copy by mail, send the form to the following address:
Department of Commerce and Consumer Affairs
Business Registration Division of Hawaii
P.O. Box 40
Honolulu, HI 96810
Processing time is typically about two weeks, but it can be expedited for an additional fee.
Sure, you can handle this step on your own, but we recommend considering the help of an LLC formation service. Why? Not only will they take the reins and make sure you file everything properly, but they’ll also provide other necessary products and services at very competitive prices.
Step 4: Create A Hawaii LLC Operating Agreement
Creating a Hawaii LLC operating agreement is the only way for you and your members to fully define your roles and lock down your LLC’s management and ownership structure. Having this document in place will also give you all something to return to if a dispute or lawsuit arises.
Your operating agreement should outline the following:
- each member’s responsibilities
- how new members will be admitted
- how existing members may transfer or terminate their membership
- how profits and dividends are to be distributed
From there, you can add as many provisions as you want, provided they are not in conflict with Hawaii business law. Learn more about Operating Agreements in Hawaii.
To learn more, read our What Is an LLC Operating Agreement guide. You can also download a template or create a custom Free Operating Agreement using our tool on How to Start an LLC. No credit card required, ever.
Step 5: Obtain An EIN (Employer Identification Number) For Your LLC
The Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), is essentially a Social Security number (SSN) for your company. State and federal agencies use this number to track your business activity.
Your EIN will come in handy when it’s time to:
- Open a business bank account
- File Federal and State taxes
- Hire employees
We think the best way to get an EIN for your Hawaii LLC is by using the free online application on the IRS website. We prefer this method because it's the most efficient, but you can apply by phone, fax, or mail. You can read through our How to Get an EIN guide to find out how.
Maintain Your LLC's Personal Asset Protection
Using dedicated business banking and credit accounts is essential for personal asset protection.
Now that you’ve made it through the formation process for your Hawaii LLC, you’ll need to take steps to protect your personal assets and establish your business as an independent entity.
When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your Hawaii LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can go a long way in protecting your assets with these three steps:
1. Open a business bank account.
A business bank account separates your personal assets from your company's assets, which is necessary for personal asset protection. A designated business bank account also makes accounting and tax filing easier.
2. Get a business credit card.
A business credit card helps you separate personal and business expenses. A business credit card will also build your company's credit history, which can be useful to raise capital later on.
3. Designate an authorized representative.
Make sure all documents are signed by a representative of your Hawaii LLC and not by you (or other LLC members) directly. This will help separate you from liability incurred by the LLC.
4. Learn how to build business credit
A good business credit score will help establish your business’s fundability. It can help with many things, including credit cards that are issued in your business’s name and score instead of depending on your personal credit score, better interest rates on loans, higher lines of credit, and more.
Reduce the Liability of Your LLC in Hawaii
Business insurance helps you manage risk and focus on growing your LLC in Hawaii. Carrying the right coverage protects your Hawaii LLC from liability and keeps you safe in the event of a loss.
The most common types of business insurance are:
- General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
- Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers claims of malpractice and other business errors.
There are free services available that quickly assess your business’s insurance needs. These services suggest customized policies with various insurance carriers so that you can choose the best value. One such reliable service is CoverWallet.
You can reduce your LLC’s liability by being fully compliant with employment laws such as:
- Verifying new employees are allowed to work in the US.
- Reporting employees as "new hires" to the state.
- Withholding employee taxes.
- Printing workplace compliance posters and placing them in visible areas of your workspace.
If you plan to hire employees, you might also be required to invest in Workers' Compensation Insurance. This type of policy provides coverage for employee job-related illnesses, injuries, or loss of life.
Find out more information from the State of Hawaii Department of Labor and Industrial Relations website.
As a new LLC in Hawaii, you will need to stay compliant with permits, licenses, taxes, and state filings. This is serious business; failure to comply can lead to fines, tax penalties, and dissolution (the end) of your Hawaii LLC.
Business Licenses and Permits
To operate your Hawaii LLC, you must comply with federal, state, and local government regulations. The details of business licenses and permits vary from state to state, so make sure you research carefully and plan accordingly.
Find out how to obtain necessary licenses and permits for your business or have a professional business licensing service do it for you:
Federal: Use the U.S. Small Business Administration (SBA) guide.
Local: Contact your local county clerk and ask about local licenses and permits.
Hawaii does not have a sales tax and instead imposes a General Excise Tax.
Here’s a general excise tax guide to find out more.
If you have employees in Hawaii, you will need to register for Unemployment Insurance Tax through the Hawaii Department of Labor. You will also need to sign up for Employee Withholding Tax through the Hawaii Department of Taxation. To learn more about LLC taxes, visit our LLC Tax guide.
Hawaii requires all LLCs to file an annual report. If you miss state filings like the annual report, you could face fines or even automatic dissolution. A quality registered agent service, like ZenBusiness, can help protect your assets by keeping track of filing requirements for you. Alternatively, you can hire an Annual Report Filing Service to complete the filing for you.
File online with the Department of Commerce and Consumer Affairs
Department of Consumer Affairs
335 Merchant St.
Honolulu, HI 96813
Due Date: Due by the end of the calendar quarter in which the LLC was formed.
Late Filings: Hawaii fines LLCs $10 annually for late filings. In addition, LLCs may be dissolved after 2 years for failure to file an annual report.
Reduce Administrative Burden
There will be many demands on your time once you start your business. With that in mind, it’s a good idea to streamline your workflow and reduce administrative overhead from the get-go. The two most important business tasks to get help with are:
It's important to get your books in order — even if you haven't officially opened for business. A well-managed accounting system will help you:
- Track your business finances, including bills, expenses, and income.
- Simplify and file your annual taxes.
You can maintain your accounting in two ways:
- Use a DIY accounting software. This can come with an increased risk of errors especially when starting a new business.
- Hire an accounting service. They can provide comprehensive advice to help optimize your bookkeeping and taxes as well as additional services such as payroll etc.
Recommended: For most small businesses, we recommend using a reputable accounting service. Schedule a free tax consultation for your business now to avoid costly errors in the future.
If you have employees, a payroll service will save you a lot of time and also save you from having to become an expert on state compliance or employee tax withholdings and filings.
Gusto is a reliable and good payroll service for small businesses.
Need Help Creating an LLC in Hawaii?
Have A Professional Service Form Your Hawaii LLC For You
If you’ve got too much on your agenda to worry about all the paperwork and state-requirements, there are a handful of LLC formation services that can take care of everything for you.
Here are the two most popular:
– ZenBusiness ($39 + state fee) = Best Price & Overall Value
– LegalZoom ($79 + state fee) = Best For Brand Recognition