Starting an LLC in Hawaii involves choosing a unique name, filing paperwork, and registering for state and federal taxes, among other tasks.
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by Carolyn Albee
Carolyn has been a freelance writer for 15 years, covering a variety of legal topics, from personal injury to crimina...
Legally reviewed by Allison DeSantis, J.D.
Allison is the Director of Product Counsel at LegalZoom, advising and providing leadership to internal teams on the d...
Updated on: November 5, 2024 · 11 min read
Forming a limited liability company in Hawaii is a great way to protect your personal assets and manage your business with flexibility. Hawaii’s business-friendly environment has no income taxes on unincorporated businesses like LLCs, no sales tax, and lots of initiatives to provide entrepreneurs with the resources they need. But before you can join the Aloha State’s lively small business community, you need to learn how to start an LLC in Hawaii.
Hawaii LLC formation isn’t complicated, but there are some steps you might not think of. Follow this guide to make sure you don’t miss any requirements.
Your LLC name must follow specific rules set by the Hawaii Department of Commerce and Consumer Affairs (DCCA). Here are the Hawaii LLC naming guidelines to keep in mind when choosing a name:
If you’re not ready to file your LLC yet, you can reserve your chosen business name through the Department of Consumer Affairs for 120 days for a $10 filing fee.
Your Hawaii LLC must have a registered agent who is responsible for receiving legal documents, such as lawsuits or state filings, during regular business hours. The registered agent can be:
You can be your own registered agent or you can make one of your employees or LLC members your agent. Even if you live in the state, however, it can be helpful to use a registered agent service like the one LegalZoom provides. Using a service keeps your personal address off the public record and gives you peace of mind that you won’t miss important notices.
To officially form your Hawaii LLC, file the articles of organization with the DCCA’s Business Registration Division. You can file online through the Hawaii Business Express website or by mail. The filing fee is $50, and you can pay an extra $25 for expedited filing.
The articles of organization form will require the following information:
Most Hawaii LLCs choose to file the articles of organization through the Hawaii Business Express website, but you can also send them by mail to the Business Registration Division in Honolulu.
Though you’re not required by law to have an operating agreement for your Hawaii LLC, it’s highly recommended. This is a legal document that outlines how your LLC will operate and helps prevent future conflicts. An operating agreement generally includes the following.
An operating agreement is especially useful for multi-member LLCs. For example, if there’s a disagreement over profit distribution, the operating agreement can resolve the issue by providing clear terms everyone agreed on.
For single-member LLCs, an operating agreement can clearly separate your business and personal finances for legal purposes. You can create this document yourself, but many business owners choose to use an online service like LegalZoom to create an operating agreement.
You’ll need an employer identification number (EIN) from the Internal Revenue Service (IRS) if your LLC has multiple members or employees, or if you want to open a business bank account. This federal tax identification number also helps protect your personal assets by keeping them separate from your business. You can apply for an employer identification number through the Internal Revenue Service website or use LegalZoom’s EIN filing service.
Once you have your EIN, you’ll want to open a business bank account to ensure that your business income and expenses are handled separately from your personal finances. Like the EIN itself, having a separate bank account helps strengthen your personal liability protection. Opening a business credit card can also help you manage your expenses, plus provide perks like rewards.
After forming your LLC, you’ll need to register to pay business taxes with the Hawaii Department of Taxation. While Hawaii taxes don’t include a sales tax, LLCs must pay the General Excise Tax (GET), which applies to nearly all business activities, including sales of goods and services. The GET tax rate varies by industry, but is 4% for most businesses.
In addition to the GET, certain businesses might have to pay other taxes. For example, if your LLC rents out accommodations for less than 180 days, you’ll need to register for the Transient Accommodations Tax (TAT). Like most other states, Hawaii also leverages excise taxes on certain products, like alcohol, tobacco and e-cigarettes, and fuel.
If you have employees, you’ll need to withhold Hawaii income taxes from your employees’ wages. You’ll also need to register to pay the unemployment tax and get workers’ compensation insurance. You can register for taxes by submitting a Hawaii basic business application through Hawaii Tax Online. Once you do, you’ll receive a Hawaii tax ID number that you’ll use to file taxes each year.
Depending on your business, you may also need state licenses or permits. Hawaii’s Professional and Vocational Licensing Division oversees licensing for 52 professions, including accountants, chiropractors, contractors, doctors, electricians, mechanics, nurses, real estate agents, and veterinarians.
The Hawaii Department of Health issues various permits, including for food establishments and tattoo shops. They also issue noise permits and environmental permits, which you might need if your business operations will affect air or water quality or involve waste disposal. You might also need business licenses or permits from your city or county. You can use the state’s Business Action Center as well as your local county clerk’s office to research which permits you need.
Most LLCs must file a Beneficial Ownership Information Report (BOIR) with the Financial Crimes Enforcement Network (FinCEN). If you formed your LLC in 2024, you will need to file within 90 days of forming. If you’re forming your Hawaii LLC in 2025 or later, you only have 30 days. A beneficial owner is anyone who owns at least 25% of the LLC or has substantial control of the company.
This federal law was established by the Corporate Transparency Act and is designed to prevent financial crimes by making business ownership more transparent. It’s important to file the report on time and error-free, which is why you might want to use LegalZoom’s BOIR filing service, which includes support from compliance specialists.
You’re well on your way to starting your LLC in Hawaii, but there are a few additional steps you need to take to stay compliant and protect your business.
The minimum cost to form an LLC in Hawaii is $50 for filing articles of organization. It’s an affordable state in which to start a business, which lowers the barrier of entry and allows you to focus your budget on additional services that can help streamline the Hawaii LLC registration process.
The total cost of Hawaii LLC formation therefore ranges from $50 to about $465, plus the cost of any business licenses or permits. You’ll also need to pay $15 each year when you file your annual report.
In addition to the General Excise Tax discussed above, Hawaii LLCs need to comply with a few other state-specific rules and regulations.
After reading this guide, you have a better idea of how to start an LLC in Hawaii, but it’s even easier with LegalZoom. We handle everything from filing your articles of organization to providing registered agent services, so you can not only form your LLC, but make sure it stays compliant. As a business owner, you have enough on your plate. Whether you’re looking to streamline the process or get expert help with the paperwork, LegalZoom is here to help you start your LLC with confidence.
Forming a limited liability company in Hawaii typically takes 3 to 5 business days when filing online, but paper filings may take up to two weeks. On the other hand, if you pay for expedited filing, it will only take 1 day. Once the state approves your articles of organization, your LLC is officially recognized.
Forming a limited liability company in Hawaii protects the personal assets of the business owner and offers flexibility in management and taxation. Hawaii’s supportive small business environment also provides resources to help you grow your company.
Each limited liability company in Hawaii must file an initial report within 60 days of formation and an annual report each year. The annual report filing fee is $15, and it’s due by the end of the LLC’s anniversary quarter. Filing these reports keeps your LLC in good standing with the state.
If you make a mistake on your limited liability company’s articles of organization, you can file articles of correction with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. This allows you to fix errors without needing to start over. It’s important to file corrections quickly to avoid any complications with your LLC’s registration.
Yes, LLCs in Hawaii are subject to the General Excise Tax (GET) on their gross income. LLCs don’t pay state income tax as entities, but members must report their share of profits on their personal tax returns. If your LLC has employees, you’ll also need to pay employer taxes like withholding tax and Temporary Disability Insurance (TDI).
Rudri Bhatt Patel contributed to this article.
Every state has different rules, costs, and considerations for LLC formation.
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