Hawaii LLC

Hawaii LLC

Form a Hawaii LLC

At LawInc we are Hawaii LLC formation experts who can help you form a Hawaii LLC, the right way. We file the Hawaii LLC Articles of Organization with the Hawaii Department of Commerce, Business Registration Division and prepare a customized operating agreement. We can also obtain the Hawaii LLC’s EIN, in an quickly as 24 hours. Let LawInc guide you through the process of forming your Hawaii LLC.

Let LawInc walk you through the Hawaii Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.

Hawaii LLC Name 

The first step in forming a Hawaii Limited Liability Company (LLC) is selecting the business name. Hawaii LLC names:

  • Must include the words “Limited Liability Company” or “Limited Company” (it being permitted to abbreviate the word “limited” as “ltd.” And the word “company” as “co.”) or the abbreviation “LLC” or “L.L.C.” or “LC” or “L.C.” The letters in the name of a LLC must be letters of the English alphabet.
  • The name of a Hawaii LLC must be distinguishable on the records of the Hawaii Sec. of State.
  • Cannot include purely geographical locations.
  • Cannot contain the word “Partners.”
  • Cannot contain the word “Bank” or variations without approval from the Commissioner of Financial Institutions.

A Hawaii LLC may apply to use a name that is not distinguishable if:

  • The owner, registrant or user of a reserved or registered name provides written consent to the use of the name, and one or more words are added to make the name distinguishable from the applicant’s name.
  • The applicant delivers to the director a certified copy of the final court judgment establishing the applicant’s right to use the name.

LawInc permits you to choose up to three names and will conduct a name search for your Hawaii LLC, prior to filing.

Hawaii LLC Formation

Hawaii LLC Filing Procedure: When forming a Hawaii LLC, the Hawaii Articles of Organization (Form LLC-1) must be filed with the Corporations Division of the Hawaii Secretary of State. The Hawaii Articles of Organization must state:

  • The Hawaii LLC name.
  • Name and address of each Hawaii LLC organizer.
  • Street address of Hawaii registered office.
  • Street address of principle place of business.

Hawaii LLC Organizers: An Hawaii Limited Liability Company can be formed by one (1) or more organizers. An organizer may be an individual, business entity, business trust, estate, trust, association, joint venture, government, governmental subdivision or agency, or any other legal or commercial entity.

Hawaii LLC Members: Hawaii LLCs require 1 or more members. There is no residence or age requirement. Hawaii LLC members are not required to be listed in the Articles of Organization.

Hawaii LLC Management: A Hawaii LLC is not required to list the managers in the Articles of Organization.

Hawaii LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Hawaii Articles of Organization place a limitation on the company’s existence or until dissolution or termination.

Hawaii Registered Agent: An Hawaii corporation must maintain a registered agent and office to receive service of process in Hawaii. The Hawaii registered agent should be available, at an Hawaii physical address, during normal business hours to accept important legal and tax documents on behalf of the Hawaii LLC. A Hawaii LLC may not act as its own agent.

Hawaii LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Hawaii LLC operating agreement should reference how the Hawaii LLC is managed, allocation of profits and losses and member capital contributions. The Hawaii LLC operating agreement does not need to be filed.

Hawaii Professional LLC: Hawaii does not allow professionals, such as physicians, accountants and attorneys, to form a professional limited liability company (PLLC).

Hawaii LLC Post-Filing Requirements

Hawaii Annual Report: The Hawaii Business Registration Division of the Department of Commerce and Consumer Affairs requires LLCs to file an annual report yearly based on the quarter the company was officially filed in. Due dates are: March 31st, June 30th, September 30th and December 31st. The filing fee is $15.00 and the report can be filed online.

Hawaii LLC Taxes

Hawaii State Income Tax: The LLC tax rate for Hawaii is variable, depending on Hawaii taxable net income.

Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:

  • Sole proprietorship
  • Partnership, or
  • Corporation.

Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Hawaii LLC net income must be paid just as you would with any self-employment business.

Most Hawaii multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Hawaii LLC profits are reported and allocated to each of the owners according to the Hawaii LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Hawaii LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.

If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election.  Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.

Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. An EIN is typically required if the Hawaii LLC has more than one owner, or any employees.

Hawaii LLC Dissolution

In order to dissolve or cancel an Hawaii LLC, the members or managers must file completed Hawaii Articles of Termination (Form LLC-11). The LLC must be current and in active status prior to filing a Certificate of Termination. A tax clearance certificate is not required to dissolve a Hawaii LLC.  The Hawaii Articles of Termination, Form LLC-11requires certification that the LLC debts and obligations have been paid or discharged and that LLC property has been distributed according to the interests and rights of its members. Certification must also be provided that there is no pending litigation against the LLC.

Acts Triggering Hawaii LLC Dissolution: A Hawaii LLC can be dissolved upon the happening of one of the following:

  • At a time specified in the Articles of Organization or operating agreement;
  • Upon occurrence of events specified in the Articles of Organization or operating agreement;
  • Consent by the specific number or percentage of members indicated in the operating agreement; or
  • At any time there are no members;
  • Judicial decree to dissolve by a Court.