Last Updated on June 13, 2022 by Fair Punishment Team

Do you want to start your own business in Hawaii? By opting for a Limited Liability Company (otherwise known as an LLC) you will be able to enjoy the benefits of liability protection and other advantages ideal for small, start-up businesses, while also being able to enjoy an increased amount of tax advantages.

The only question is, how do you go about starting an LLC, exactly? If you’re currently wanting to start your own Limited Liability Company in Hawaii, the good news is that the process is generally simple to do, and we’re here to help make setting up your LLC in Hawaii even easier!

In this article, we are going to be sharing with you six simple steps that you can begin implementing today to get your LLC up and running in the state of Hawaii. So, whenever you’re ready, just keep reading to discover how you can start your very own LLC in Hawaii!

1. Name Your Hawaii LLC

First things first, before you start doing anything else, the first thing that you are going to need to do is to name your LLC!

As you are going to be setting up your LLC in Hawaii, it’s very important that you make sure that the name you choose complies with Hawaii’s name regulations, otherwise, you will be unable to successfully set up your LLC in Hawaii.

To help make this easier for you, here’s a quick breakdown of the most important requirements outlined by Hawaii that you must meet when naming your Limited Liability Company:

• Include LLC/L.L.C/Limited Liability Company: The first requirement you must meet when naming your LLC is to ensure that the name of your company contains either “LLC”, “L.L.C”, or “Limited Liability Company” somewhere in the title. Many LLC owners find that placing them at the end of the name often flows best, but it’s entirely up to you how you choose to include LLC, L.L.C, or Limited Liability Company in the name that you select to use.
• Make sure that it is unique: Another important requirement set out by Hawaii is that the name must be unique and not copy or be the same as another existing LLC. In order to double-check whether or not the name that you would like to use for your LLC is available and not already in use by another LLC, you can do this easily by simply clicking here, where you will be able to do a quick search of the name that you want to use to see if it’s currently available. 
• Refrain from using any restricted words: This last point is a pretty general rule and applies to the majority of states across the USA, however, it’s important that you meet this requirement otherwise you are going to be unable to set up your LLC in Hawaii. The most common restricted words are the following: bank, lawyer, attorney. However, if you would like to see a rundown of all the restricted words in Hawaii, click here.

2. Choose A Registered Agent 

After you have named your LLC, you will then need to go ahead and get yourself a registered agent. At the time of writing, it is currently a legal requirement in Hawaii to appoint a registered agent to all LLCs created in the state. 

If you’re not already aware of what a registered agent is or even familiar with the term, the role of a registered agent is easy enough. Essentially, a registered agent will handle all of your business documents and mail, while also serving as the first point of contact for all legal issues and notices. 

Even though the registered agent role can be filled by anyone, including yourself or another member of your LLC, it is highly recommended that you invest in a registered agent that has experience within the area.

In addition to this, even though you have full control over who you appoint to be the registered agent for your LLC, it is imperative that you meet the requirements outlined by Hawaii:

• The registered agent must live in Hawaii.
• The registered agent must have a track record of providing professional registered agent services.
• The registered agent must be in the office and able to accept business documents, legal documents, and notices within the standard business hours of 9-5. 

3. File The Articles Of Incorporation 

A vital piece of documentation that you are going to need to set up for your LLC is something that is known as the Articles of Incorporation.

While these might sound pretty formal and complicated, they are essentially documentation that establishes your LLC by allowing it to become officially recognized by Hawaii.

In other words, the Articles of Incorporation will provide your state with relevant and important information regarding your LLC.

The good news is that filing the Articles of Incorporation is relatively easy to create and file.

Essentially, all you will need to do is prepare them yourself (as you will be able to outline the runnings of your business, as well as the various roles within your company) and then file them so that they can be approved and recognized by the state of Hawaii.

Even though this might seem like a daunting task to do, we strongly recommend that you do so otherwise you are only going to discover that you are unable to successfully set up your business, as the Articles of Incorporation are what helps your state to recognize your start-up LLC.

Here’s a helpful breakdown of some of the basic information that you are going to need to include within your Limited Liability Company’s Articles of Incorporation:

• The name of your LLC as well as the address that the LLC is registered to.
• The contact information of the registered agent that you have appointed for your LLC.
• The contact information of the name and addresses of all members of your LLC, including yourself!
• The duration of how long the LLC will exist. This particular piece of information can often confuse many new LLC owners, but all you will need to do is simply list your LLC’s duration as indefinite, as this means that you have plans for it to exist on an ongoing basis.
• The structure of the way that your LLC is going to be run, especially the management structure of your LLC.
• Within the Articles of Incorporation, you are also going to be required to indicate whether or not all of the members of your LLC are going to be responsible for the debts of the LLC that they are a part of.

Keep in mind that if you are the person that is going to be forming the LLC, you are the person that is going to need to write your signature at the end of each page that comprises your LLC’s Articles of Incorporation.

After you have finished writing the Articles of Incorporation, you will then need to mail them. Once you have done this, typically a Hawaiian secretary of state will read over the Articles of Incorporation that you have filed for your LLC, so that they can decide whether or not to approve it.

4. Create An Operating Agreement

Another important piece of business documentation that you are going to need to file when setting up your LLC is the operating agreement. The operating agreement is highly recommended as you will be able to outline the way that your LLC is going to be internally run.

If you do not file for the operating agreement, then the rules and regulations regarding how your LLC is run will fall to the state of Hawaii by default. 

By making sure that you have an operating agreement established for your LLC, you will have a piece of documentation that will be able to outline a variety of important information that you might require in the instance of a dispute or misunderstanding, both internally and externally.

For example, if there was a financial misunderstanding from a member of staff, then the operating agreement already in place would contain all of the necessary information to help reach a friendly solution to the issue/dispute that was raised.

Now, as we have already mentioned above, unlike other types of documentation, an operating agreement isn’t technically required but is instead an optional piece of documentation that LLC owners can choose whether or not to create at their own discretion.

However, while this might very well be the case, it is highly recommended that you do take the time to create an operating agreement, otherwise, the runnings of your LLC will fall to the hands of Hawaii’s courts by default.  

With all of that being said, without an active operating agreement in place for your LLC, in the event of a dispute or issue, Hawaii’s government will be responsible for settling the dispute, and that might not always end up being in the best interest of your LLC. 

5. Get An EIN Number 

Along with all of the above, you are also going to need to make sure that you have assigned your LLC with an EIN, which stands for Employer Identification Number.

It is a requirement of Hawaii that your limited liability company have an EIN number, as, without it, the state’s Internal Revenue Service will not be able to recognize your LLC for the relevant tax requirements, and that can land you in hot water later down the road. 

The good news is that obtaining an EID can be easily done via the IRS, and is free of charge. Once you have set up your LLC EIN number, you will find that the Employee Identification Number will be able to help make the process of the following a lot more efficient:

• Filing and managing state/federal taxes.
• Hiring new employees to your LLC.
• Opening up a business bank account for your LLC.

Along with all of that, filing an Employee Identification for your LLC business will also ensure that your LLC is officially registered and recognized by Hawaii, which will ensure that you are able to legally conduct business in the state without breaching any regulations or rules. 

6. Decide If You Need A BIN 

Last but certainly not least, the final step to setting up your Limited Liability Company is to decide where or not your LLC is going to need a BIN, which essentially stands for Business Identification Number.

Even though a Business Identification Number might sound very similar to an Employer Identification Number, it is important to note that the two indemnification numbers are used for very different purposes.

While an Employer Identification Number is required by law in Hawaii to officially recognize LLCs for taxation requirements and other purposes, a Business Identification Number is not always required by the state of Hawaii, so it is up to you to determine whether or not your LLC is going to need one.

Typically, your Limited Liability Number is only going to require a Business Identification Number if you are planning to hire employees to work for your company.

This is because, unlike the Employer Identification Number, the Business Identification Number serves as a way for the Internal Revenue Service of Hawaii to be able to handle and meet the tax requirements for the payroll of an LLC. 

With that being said, if you are planning on hiring future employees or even if you are planning to start your Limited Liability Company with a small team of employees, then it is vital that you also register your LLC for its Business Identification Number along with the Employer Identification Number which we have already outlined above.

Keep in mind that, if you are going to be hiring employees for your LLC and you do not have a Business Identification Number, Hawaii’s Internal Revenue Service will have no way of handling payroll tax needs, and that can lead to you inferring a hefty fine if you are discovered.

Frequently Asked Questions 

Do I Need A Business License? 

As we’re sure that you might already be well aware, the rules regarding LLCs often tend to vary from state to state – which means that while a business license might be required in one  state, it might not necessarily be a requirement for another state.

When it comes to Hawaii’s case, a business license for an LLC is always required, and the name of the license is called General Excise Tax License.

What Are LLC Tax Requirements In Hawaii?

Even though LLCs are often deemed to be a separate entity, which means that they are not taxed but instead, the members of the LLC are required to pay their fair share of tax from the LLC’s overall yearly profit – there are some specific requirements you should be aware of in Hawaii.

While the above does apply to Hawaii, it should also be noted that all LLCs in Hawaii will be required to obtain their own GET license (General Excise Tax License) , file their own tax returns, and pay on their overall gross business income. If you would like to discover more about the tax requirements of Hawaii, please click here.