If you’re thinking about starting a Hawaii LLC for the very first time, chances are you are quite new to the whole game. And even if you have experience with doing business in other jurisdictions, it takes a handful of extra steps to register an LLC in Hawaii. This guide for starting an LLC aims to outline the key procedures involved in the process, including some of the general applications as well as Hawaii filings specific to this state.
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The first step in the process of LLC registration is finding a fitting name for your entity. Similar to other states, Hawaii’s LLC name requirements mandate that all entities of this type include their business designation in the name itself, whether in full or abbreviated form like “LLC” or “L.L.C”.
Unless you have explicit permission from the DCCA, your company cannot include any specialized words in its name that do not reflect the nature of its operation, e.g. union, bank, exchange, trust, etc. The state law also requires for the name to be unique, meaning that it should both be available and distinct from the names already in use in your jurisdiction.
To help you determine the validity of any business name, the Hawaii Department of Commerce and Consumer Affairs Business Registration Division provides a free Business Search tool. If it’s available, you can go ahead and register the business name in Hawaii. But if the search shows exact or close matches, you will have to either significantly alter the legal name or find a new one.
If the name you have picked checks out but you don’t want to register the company right then and there, the state lets you reserve your choice for up to 120 days. The service costs only $10 but you can pay an extra $25 for immediate processing.
The fastest way to do this is by filing Form X-1: Application for Reservation of Name online. You can do this through Hawaii Business Express and pay all fees online.
If you prefer to rely on physical documents to create an LLC Hawaii, you can send your reservation form to the State of Hawaii Department of Commerce and Consumer Affairs directly at:
Business Registration Division
P.O. Box 40
Honolulu, Hawaii 96810
If you live nearby, you can hand in all HI LLC paperwork in person at:
335 Merchant Street, Honolulu, HI 96813.
As per Hawaii’s Revised Statutes 428-107, all LLCs that operate in Hawaii must appoint and keep a registered agent throughout the entity’s existence. Registered agents maintain reliable lines of communication between the company and the authorities, most crucially receiving and forwarding all legal documents addressed to the company. The agent can be an individual Hawaii resident or an entity, either domestic or foreign, with explicit permission to conduct business in Hawaii.
If you choose to designate a single person as your agent, your options are very generous. Almost anyone can carry out these duties as long as they:
Some entrepreneurs choose to cut down on costs by designating their relatives or friends as their registered agent LLC. And while this option is indeed cheaper than most, the appointed individual must have sufficient knowledge of business law in Hawaii and other legal procedures.
For those who are launching an LLC with a professional service provider, it often makes more financial sense to get their Hawaii LLC registered agent in a formation bundle. Most companies that specialize in incorporation can also connect you to the state’s registered agent or even help you replace one.
However, pay attention to the policy regarding their third-party solicitation—quite a lot of companies outsource registered agent services rather than keeping it in-house. Services that employ their own agents include such popular providers as InCorp or Northwest.
Entity registration can altogether skip the drafting of an operating agreement—LLC, corporation, or partnership—but this step is something most professionals advise doing. When you start the process of opening an LLC, this document should be one of the first things you do, even if you’re a sole owner.
An LLC operating agreement in Hawaii is especially beneficial for multi-member companies. The agreement is there to put in place a set of specific internal regulations pertaining to all members and managers, including their responsibilities, ownership shares, and voting rights. This document is also used to standardize operations and procedures of dissolution, inheritance, ownership transfer, and more.
If you aren’t sure how to create an operating agreement LLC, most formation companies issue a form with relevant instructions. Services like Northwest Registered Agent even offer to tailor this form to your particular brand of business, so you won’t have to modify a default template to fit your needs.
The core principle of an LLC as a structure is its limited liability privileges. This essentially means that the business assets of the entity are clearly separated from those belonging to the LLC members, making it harder for any lawsuit to touch the personal property of the owners.
But to ensure you have such protections in place, you have to create a Hawaii LLC bank account to conduct all your business transactions. All you need is to go to the branch of your choosing (selected based on accessibility and policy) with your company documents, and many owners do this as soon as they form an LLC in Hawaii.
In cases like these, what you normally do is apply for an account right after your entity’s registration has been approved. Some banks ask for LLC bank resolutions. Most formation companies have this option covered, and some even include it in their starter packages.
Any entity that plans to establish payroll and hire workers is required to get an identification number. This step usually comes after you’ve completed your Hawaii LLC registration. Similar to personal identification numbers, a Hawaii EIN is a unique code assigned to an employer in order to keep track of their tax activities. You can get an EIN for LLC on your own by applying with the IRS online, by mail, or through fax.
The easiest method of getting a Hawaii LLC EIN is through an online application. You can apply between 7 a.m. and 10 p.m. EST from Monday to Friday. The service is free, and the number will be issued immediately.
Mail applications take the longest to process, usually up to 4 weeks. This method requires you to fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Fax Hawaii LLC EIN applications are a bit faster and are normally processed within 4 days. With this method, the filled out Form SS-4 should be sent to:
(855) 641-6935.
Hawaii also requires employers to obtain an employer account ID, also called a DOL number, which can be obtained through the DLIR or HBE websites for free.
One of the definitive steps to starting an LLC is its registration. In Hawaii, the LLC Articles of Organization is a document that serves as proof of your entity’s legal existence. It can be filed online, by email or through regular post, fax, and in person. The filing itself will cost you $50 plus a $1 fee for state archives. You can also get expedited processing for $25 if you need it done in 2 to 3 days.
Online filings can be managed through the account at Hawaii Business Express.
Alternatively, you can do so through the DCCA’s LLC registration page and send the paperwork to:
breg-doci-filing@dcca.hawaii.gov
You can also set up a Hawaii LLC through a mail application. This normally takes longer to process, so be aware of a possible 4-6 week delay. The paperwork should be directed to:
State of Hawaii Department of Commerce and Consumer Affairs
Business Registration Division
P.O. Box 40
Honolulu, Hawaii 96810
As with other applications, this one can also be done in person at:
335 Merchant St. Honolulu
If it’s more convenient to oversee your registration by fax, send your paperwork to:
(808) 586-2733.
Successfully registering an entity is only a precursor to your actual duties. Although it’s easier to manage than a regular corporation, this business structure still requires careful maintenance which includes licensing, taxation, and compliance procedures.
Any entity must obtain a general business license in Hawaii by registering with the DCCA. The state also has a rather unique regulatory framework due to its location and connection to aquatic-based industries. To apply for LLC license, you have to first register with PVL or DAR divisions.
The former oversees the licensing of 52 professions and vocations, while the latter covers the aquatic resources segment, including commercial licenses, registration for bottom fishers, Monument waters entry permits as well as special activity and Molokini Shoal MLCD permits. You can learn more about Hawaii business permits on the DCCA’s professional and vocational licenses page.
Before you can do anything else, consider getting a Hawaii Tax ID first. You can do this by submitting your Basic Business Application form through DOTAX or HBE and paying a $20 filing fee. They typically process it within 2-4 days (with DOTAX) or 3-5 days (with HBE). You can always mail it or hand it in-person at a DOTAX office or BAC, but in this case, you might have to wait up to 4 weeks.
Any owners that employ workers in an LLC operating in Hawaii are also required to register for unemployment insurance. This rate of this tax depends on your workers’ wages, and the set amount is retained in a trust fund until there is a need to compensate eligible employees.
On a federal level, your company may be subject to several types of taxes depending on the industry, e.g. excise taxes, income tax, employer taxes, and self-employment tax.
Regardless of your field of occupation, almost all LLC tax filing in Hawaii involves registering for a General Excise Tax license and use tax, which is directly tied to the license.
You may also qualify for a withholding tax and more specific forms of taxation like rental taxes, fuel, tobacco, liquor etc. Find more information in Form BB-1 (which is the Hawaii tax form for LLC) and through the Hawaii Business Express portal. You can mail your applications to:
Department of Taxation
P.O. Box 1425
Honolulu, HI 96806-1425
Department of Taxation
830 Punchbowl St.
Honolulu, HI 96813
or
Department of Labor and Industrial Relations, Unemployment Insurance Division
830 Punchbowl St., Room 437
Honolulu, HI 96813
To lawfully conduct an LLC in Hawaii, every owner must report on a yearly basis. All Hawaii annual reports can be submitted online and via mail by sending the paper form to:
Department of Commerce and Consumer Affairs
Business Registration Division
P.O. Box 40
Honolulu, HI 96810.
After Hawaii LLC formation, online filings cost $12.50 for a single report, whereas mail applications are $15.00. Remember that Hawaii LLC annual filing requirements also foresee penalties for every missed report. Such reports are labelled delinquent and come with a $10 penalty.
If you’ve missed several reports, you can submit them online in one go and cover their combined sum. Missing even a single filing might lose your company its good standing which can only be reinstated after you’ve provided all missing reports and paid the penalty. Standard processing for such filings is 1-3 days.
If you wish to avoid dealing with all this paperwork by yourself to commence LLC in Hawaii, there are a number of LLC formation companies that could take this load off your shoulders. Some of these options are pretty affordable, so even a small startup can invest in a yearly subscription. If you want to get other features like a free registered agent all in one place, pay to LLC formation services that employ their own teams of agents and legal experts rather than outsource it.
