Step 1) Verify & Secure A Name
To secure and register your brand name it must be unique, not too similar to another registered name, and shouldn’t contain any restricted wording. To check, conduct a Business Entity Search through the state and if there are potential trademark issues conduct another quick search using the TESS System through the U.S. Patent Office.
Remember your LLC name should contain the words ‘Limited Liability Company’ or ‘Limited Company’. Abbreviations for these words like ‘L.C.’ or ‘L.L.C’ are also acceptable. Also, you can have it reserved at a fee of $10 by filing an Application for Reservation of Name.
Remember, this isn’t optional in Hawaii-- it’s mandatory.
Quick Note: Before you commit 100% to a name, you may also want to check that there’s a decent URL available for your business. Use Weebly to search your options. If there’s a quality domain name for purchase, we advise buying it right away. Even if launching a business website isn’t on your radar right now, it’s going to be soon, and you might as well nail down a domain name that’ll make it easy for customers to find you!
Step 2) Get A Hawaii Registered Agent
When starting an LLC, your Hawaii Registered Agent is an intermediary or a representative of your brand who accepts and helps handle all official documents like state filings, tax forms, legal notices, and so forth. In some states you can be your own, or elect someone within your organization but you should double check to be sure (it can change).
Basically, you can either hire a 3rd-party professional and pay up to $160/yr, or get a qualified agent free of charge when you start an LLC through a service like IncFile. They take care of handling the paperwork in a timely manner for you along with a lot more depending on your specific startup package.
Step 3) File Articles Of Organization
Download the Articles of Organization or work through the state's online portal to legally register your LLC in Hawaii. This form is filed online or through mail with the Department of Commerce and Consumer Affairs – Business Registration Division of Hawaii. Basic information about your LLC will have to be provided along with the fee.
This includes name and address of the LLC, name and address of Registered Agent, names and addresses of LLC organizers, as well as other additional statements that need to be included for disclosure on the public record. Don't file until ready!
LLC Filing Fee: $50
Step 4) Get An EIN
A EIN, or Employer Identification Number, is more essential red tape which makes it possible to legally hire employees, set up an official bank account in step 5, and get through tax season much more smoothly. That said, it's important so don't skip this step.
Your company's EIN is used in almost all major transactions when you run a business, and is tracked by relevant regulatory agencies. Quick, easily, and free of charge you can get yours through the IRS Website.
Step 5) Open A Business Bank Account
Now that you have your EIN start shopping around to see which bank or credit union offers the most convenience and the best perks to suit your particular operation. There are a ton, so to begin brushing up browse this brief Checking Account Guide for small businesses with the more mainstream institutions.
Aside from this aspect, it's important that your company has its own completely separate account or financial persona apart from any other accounts of any kind. This is about protecting yourself, your assets, your team, and the brand - not to mention your new LLC status.
Step 6) Draft An Operating Agreement
While this document isn't mandatory or a legal requirement, what it does is add a thick layer of safety (legal protection) for everyone involved and details duties/responsibilities. It also, “defines each member or manager’s rights, powers, and entitlements. This includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, etc.” It may be optional, but it shouldn't be in our humble startup-savvy opinion.
To get started, consider checking out this list of Operating Agreement templates which you can customize yourself for your specific circumstances.
Step 7) Handle LLC Taxes & Licensing
Hawaii is a wonderful place, but to be perfectly frank with you their regulatory environment can be a bit confusing, simply because we're talking about islands with limited space and lots of natural environment to take into consideration. That said, be sure to do your research.
To get started bookmark the Honolulu district office of the Small Business Administration, and DCCA's Business Registration page because they’re going to be go-to sources. If you need help, consider leveraging professional Business License Research packages that can quickly source all needed documents for you.
Need Help Forming an LLC?
If you'd like help forming an LLC in Hawaii, feel free to read our reviews of the two most popular services available.