How to Start a Business in Kansas (Updated 2024)

Here's an overview of the key steps you'll need to take to start your own business in Kansas.

1. Choose a Business Idea

You first need an idea for your business. While coming up with a business idea seems simple enough, a lot of factors go into it. You'll need to take into account your working experience as well as your skills, interests, resources, and availability. If you've worked as a manager at a restaurant, for example, you'd be better positioned to start your own restaurant because you know generally how restaurants are run.

Consider the market and the demand for your products or services. Ask yourself whether the market is already saturated or your business would meet an unmet need. When weighing the demand and calculating your potential revenue, consider your costs:

• How much does it take to start your kind of business? Can you start your business with little or no money?
• Do you have enough capital to keep your business going until you can make it profitable?
• Will you need to raise money? If so, how should you raise money—loans, investments, lines of credit, other financing options?
• What are your ongoing expenses?
• Could there be unexpected costs down the line?
• What is necessary vs. discretionary spending?

You can explore these questions and evaluate your idea by creating a business plan. Your business plan can help you plan out your startup costs, identify your competition, and plan strategies for making money. (For financial tips, check out our section on business financing, loans, and capital.)

2. Decide on a Legal Structure

When creating a business, you need to choose an ownership structure. The most common legal structures for a small business are:

• sole proprietorships
• partnerships
• limited liability companies (LLCs), and
• corporations.

Besides the four main business structures, Kansas recognizes limited partnerships and limited liability partnerships (LLP), which are types of partnerships where some partners have limited liability.

If you provide a professional service, you can create a professional corporation (also called a "professional association" in Kansas) or professional LLC in Kansas. In general, a "professional service" is a service that requires a license, registration, or certification from the state.

Consider the pros and cons for each entity type and prioritize your business's needs. If your business comes with little risk and you don't have much money upfront, a sole proprietorship or general partnership (if you have other collaborators) might make the most sense. But if you want a business that's completely separate from you (in terms of taxes and liabilities), go with an entity with limited liability protection like an LLC, corporation, or limited partnership.

Depending on which business structure you choose, you might be able to elect to become an S corporation, a tax entity. Different types of businesses, such as LLCs and corporations, can elect to be taxed as S corporations but legally remain corporations or LLCs. You can speak with a tax attorney or tax professional to learn more about S corporations.

3. Choose a Name for Your Kansas Business

After you've chosen your idea and entity structure, it's time to put a name to your business. Picking the right business name is an important step. You'll want to choose a name that's unique, marketable, and identifies your business image. You must also choose a name that complies with Kansas's laws for business names.

In Kansas, like many other states, you must choose a business name that's distinguishable (different) from any business name on file with the Kansas Secretary of State (SOS). You can do a business search on the SOS website to find out which names are already taken.

Entity name designators: Kansas has specific naming requirements for LLCs and corporations (and other business types). For example, you must include certain words or abbreviations to identify your business's structure (such as using "LLC" for LLCs or "incorporated" for corporations). See our article on how to form an LLC in Kansas for more on the state's LLC naming requirements.

Reserving your business name: You can reserve an available name for 120 days by mailing a completed Temporary Reservation of Business Entity Name to the SOS. As of 2024, the filing fee to reserve a business name is $35.

No DBA registration in Kansas: Kansas, unlike many states, doesn't register DBAs (also called "trade names," "fictitious names," or "assumed names." A "DBA" is a name you do business under that's different from your legal name. For example, the legal name of sole proprietors and partnerships are the owners' personal names. The legal name of LLCs, corporations, and other registered businesses is the name the business has registered with the SOS. If you do use a DBA, you should make sure you choose a name that's different from any business names already in use in Kansas.

If you do business online, you might want to register your business name as a domain name. Moreover, to avoid trademark infringement issues, you should do a federal and state trademark search to make sure the name you want to use isn't the same as or too similar to a name already in use.

4. Register Your Business Entity With the Kansas Secretary of State

You can register your business online or by mail. You can find the forms to register your business as well as a link to online registration on the SOS's Register a Business webpage. Some business types don't require you to file any paperwork.

Here's how to form each type of business:

• Sole proprietorship: You don't need to file any organizational documents with the state to establish a sole proprietorship in Kansas.
• General partnership: Like a sole proprietorship, to create a general partnership in Kansas, you don't need to file any organizational documents with the state. But you should draft a partnership agreement to establish the rules for how your partnership will be managed and how the assets and liabilities will be divided among the partners.
• Limited partnership: You must file a Certificate of Limited Partnership with the SOS to create a limited partnership.
• Limited liability partnership (LLP): You can form an LLP by filing a Statement of Qualification with the SOS.
• LLC: To create an LLC in Kansas, you must file Articles of Organization with the SOS. You should also prepare an operating agreement to establish the basic rules for your LLC's operations.
• Professional LLC: Licensed professionals can form a professional LLC in Kansas by filing Articles of Organization Domestic (Kansas) Professional Limited Liability Company with the SOS.
• Corporation: To create a corporation in Kansas, you must file Articles of Incorporation with the SOS. You also need to prepare and adopt bylaws for your corporation. Corporate bylaws, like an LLC's operating agreement, set out your corporation's internal operating rules. You don't need to file your bylaws with the state.
• Professional association (corporation): Licensed professionals can form a professional corporation (also called "association") in Kansas by filing Articles of Incorporation Domestic (Kansas) Professional Association with the SOS.

All businesses registered with the SOS must have a registered agent in Kansas for service of process. A registered agent agrees to accept legal papers on the company's behalf.

After you form your corporation or other applicable business with the SOS, you can file IRS Form 2553, Election by a Small Business Corporation, with the IRS to elect S corporation tax status.

5. Apply for Kansas Licenses and Permits

You'll probably need to apply for at least one license, permit, or registration for your business.

Tax registration. If you sell taxable goods or services in Kansas, you must register with the Kansas Department of Revenue (KDOR) to report and collect sales tax. If your business has or will have employees, you must register with the KDOR for employer withholding taxes. You can register for both types of tax—and other business taxes—via the Business Tax Application (CR-16). After you submit your application, you'll obtain a registration number to collect and electronically pay these taxes. You can complete the application online by creating an account through the KDOR Customer Service Center. See Pub. KS-1216 Business Tax Application for more details on the application process.

Employer identification number (EIN). If your business has employees or is taxed separately from you, you must obtain an EIN from the IRS. Even if you're not required to get an EIN, there are often business reasons for doing so. For instance, banks often require an EIN to open an account in the business's name and other companies you do business with could require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There's no filing fee.

Regulatory licenses and permits. You might need to apply for permits or licenses related to health and safety, the environment, building and construction, and specific industries or services. Different departments and agencies oversee various regulatory licensing. For help figuring out which regulatory licenses and permits apply to your particular business, check the Obtain Licenses and Permits section of the Kansas Business One Stop (One Stop) website. For information about local licenses and permits, check the websites for any cities or counties where you'll do business.

Professional and occupational licenses. Visit the Research Licenses and Permits section of the One Stop website for a list of various business activities and the accompanying licensing organization. The Kansas State Board of Technical Professions oversees many professions, including the practices of architecture, engineering, geology, landscape architecture, and land surveying.

6. Pick a Business Location and Check Zoning Regulations

Once you've set up your business to comply with all legal requirements, you should find a location for your business. But before finding your new business home, you need to make sure your location fits your business's needs:

• Choose somewhere you can afford. Look at your business plan to see what you can afford, especially during your company's early months. Consider the costs: If you buy, you'll likely be responsible for a mortgage, utilities, and property taxes, and if you lease, you'll need to budget for rent, a security deposit, utilities, and other potential shared or individual costs. If you decide to lease a commercial space, negotiate terms that'll work for your business in the long term.
• You need to consider both the location and the space itself. Each part is equally important. First, consider what kind of location you need. If your business depends on pedestrians, you'll need to look for a place that's walkable and where customers are already hanging out. If you take customers by appointment or just need a nondescript office to work out of, you don't need to pay high dollar for a prime location. Second, consider the layout and square footage of the space itself. Is it big enough for you to run your business? Do you need separate spaces for offices, storage, and customer interactions? Does the space have the features you need—for example, a kitchen if you run a restaurant? Does the space have the flexibility and potential for expansions and improvements to become the space you need?
• Check that the location is properly zoned before signing any paperwork. If your location isn't properly zoned, then it's value is seriously hindered. You can potentially apply for conditional or special zoning, but that takes time and money. You're better off selecting a spot that's already properly zoned for your business purposes. You can usually find zoning regulations for your town or city by reviewing your local ordinances and contacting your town's zoning or planning department. You can even have your landlord guarantee the appropriate zoning as a condition of your commercial lease.

Do you need a physical location for your business? In general, it's good practice to have a mailing or office address for your business. Many times, a business address is legally required. Depending on the legal requirements, your address can be your home address, a P.O. box, or a coworking space, among other options. See our article on whether you need a physical address for your small business for more.

Can you operate your business out of your home? Home-based businesses are becoming more popular, especially for online businesses. If you'd like to run your business from home, check your area's zoning laws. Keep in mind that residential zoning laws are often stricter than commercial zoning laws when it comes to which kinds of business activities are allowed. Review your lease (if you rent your home) and homeowners association rules (if applicable), either of which might ban some or all home businesses.

7. Register and Report Business Taxes

You can file and pay your taxes online via the KDOR Customer Service Center. You can also find a list of tax forms under the KDOR Forms and Publications - Business Taxation webpage. In addition, any business on file with the SOS—including limited partnerships, LLPs, LLCs, and corporations—must file an information report every other year with the SOS and pay the associated fee ($100 online or $110 by paper as of 2024).

Sole proprietorships. As a sole proprietor, you'll pay state taxes on business income as part of your personal state income tax returns (Form K-40).

Partnerships. Partners pay state taxes on partnership income on personal tax returns. In addition, Kansas partnerships also must file Form K-120S, Kansas Partnership or S Corporation Income. Partnerships (and other pass-through tax entities) can elect to pay income tax at the entity level on behalf of individual partners (or members or shareholders). These individual partners can then claim a tax credit on their personal return. Partnerships can make this election on their K-120S return for each tax year.

LLCs. By default, LLCs are considered "pass-through tax entities," meaning members pay state taxes on their share of LLC income on their personal tax returns. In addition, LLCs themselves have to file an additional state tax form—either a partnership/S corporation return or a corporation return. As with a Kansas partnership, your LLC can pay members' individual income taxes at the entity level by making the election on Form K-120S. Due to an LLC's tax flexibility, a Kansas LLC can elect to be taxed as a corporation at the state level by filing Form 8832, Entity Classification Election with the IRS. For more, read our article on LLC biennial report and tax filing requirements in Kansas.

Corporations. Shareholders must pay state taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on their personal state tax return. Kansas corporations and corporations with Kansas-based income must file Form K-120, Kansas Income Tax. Depending on your corporation's tax liability, you might be required to make estimated tax payments throughout the year.

If you have employees, you must also deal with state employer taxes.

And, apart from Kansas taxes, there are always federal income and employer taxes. Check IRS Publications 334, Tax Guide for Small Business, and 583, Taxpayers Starting a Business.

8. Obtain Insurance for Your Kansas Business

Regardless of your industry or type of business, you should look into getting insurance coverage for your business. Business insurance can protect your business and your personal assets from unexpected events, such as personal injury lawsuits and natural catastrophes.

An insurance agent can help you explore the different coverage options for your business. You should consider getting general liability insurance to protect your business against claims related to bodily injury or property damage. Your business might also benefit from cyber liability insurance to cover litigation and settlement fees following a data security breach.

For further guidance, see our article on what types of insurance your small business needs.

9. Open a Business Bank Account

No matter the type of business you form, you should consider opening a separate business account to make it easier to track your income and expenses. For some business types, including LLCs and corporations, a separate bank account is necessary to maintain your liability protection.

Additional Help With Starting Your Kansas Business

If you're starting a business in Kansas, visit the One Stop website, a collaboration among various Kansas agencies. This website is a great resource for new and established business owners. It has information and resources for planning, starting, operating, growing, selling, and closing your business. You can find guidance on specific topics like:

• business plans
• business names
• entity structures
• funding
• licenses and permits
• business registration
• tax requirements, and
• employment.

You can also use the Business Startup Wizard, accessed through One Stop. After answering a few questions, the Wizard will provide you with a customized business guide. One Stop also has business starter kits for certain industries.