Setting up a corporation in Hawaii can be a very simple process but you want to make sure that the corporation you set up is called "hawaii llc", not merely any old name that you picked up off the streets. Realizing that in general the name of an LLC in any state is "sole proprietorship", you may want to avoid using the word "sole" altogether, as you don't need it to have any other meaning. But if you do wish to use the word "sole proprietorship" in Hawaii, then by all means file for the most popular form of business registration available - the 'effective' form. Otherwise, the IRS will look upon your LLC as an S-Corporation and treat it as a C-corporation for tax purposes.
Formulating your Hawaii Limited Liability Company (formerly known as a "Hawaiian limited liability company") will begin with determining which state forms you must use. You should first check with the office of the Secretary of State where you live, as this will determine the official filing procedure for your state. If you move to another state, you must immediately inform the office of the Secretary of State so that they can file the appropriate forms. Failure to do so can result in heavy fines.
Filing from a good standing company is a necessity for starting a business in Hawaii. Even if you are incorporating a business that is not doing very well or has recently closed, it is still imperative to maintain good standing with the state. You can do this by simply getting a letter of good standing from your original hawaii llc company and paying the appropriate fees.
Steps for Forming a Hawaii Limited Liability Company
Formulating your Hawaii Limited Liability Company requires a definition of the term "limited liability". According to the Hawaii Corporation Lawyer Association, "Limited liability protection is a means to protect investors while providing protection to the directors, officers and employees of the limited liability company". From there, your company name should be decided. Your choice should be one that reflects your purpose and the products or services that you wish to offer. The name of the company, including the word "limited liability", should then be entered into the blank on the form.
Forming a Limited Liability Company is also where you will select a registered agent, or R agent, who will act on your behalf. If you are not a resident of the state, an appointed or non-residential address, such as your home, is required. When completing the initial filing, select the option that allows you to select a qualified registered agent. The qualified registered agents are typically business managers or former business managers that have been in the business for at least five years. This ensures that the paperwork has been completed correctly and completely.
The third step is to file your Articles of Organization. At this point, the paperwork must be completed and sent to the Hawaii Corporation Commission. Once received by the Commission, it is reviewed and forwarded to the State Registry. Once the business hours of operation have been verified, and business hours are open to the public, the Registered Agent will be able to transact business as usual with his clients, while the LLC company remains legally active.
The fourth step is to appoint a Certified Public Accountant or CPA to act as your company's registered agent. Your appointed agent will be responsible for handling all correspondence, bookkeeping and tax related duties. Once again, your chosen CPA should have at least five years of experience in the Hawaii market and have successfully served as the state's registered agent. The initial fee is nominal and a percentage of sales is retained by the Hawaii LLC Organizer for its operations.
The fifth step is to prepare the Operating Agreement. This is a complete agreement between your business entity and you, the registered agent of the LLC. The agreement should be signed by all parties involved and should include any additional stipulations needed to protect both parties. If you are incorporating a for-profit business, you will also want to add a provision that waives the requirement of a written test for nonprofit status. It is always recommended that you seek the services of an attorney when incorporating a Hawaii Limited Liability Company.
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