Hawaii LLC Startup Guide

How to Start an LLC in Hawaii

Don’t fret. This article will take you through the steps for how to set up an LLC in Hawaii. Along the way, we’ll show you how our business services can make the process even less stressful.

Note: this guide covers the steps for creating a domestic LLC (one that originates in Hawaii). If you’re looking to start a foreign LLC, you’ll file an Application for Certificate of Authority with the Department of Commerce and Consumer Affairs (DCCA) instead.

Okay, let’s show you how to open an LLC in Hawaii with the following steps.

1. Name your Hawaii LLC
2. Appoint a registered agent in Hawaii
3. File Hawaii Articles of Organization with the Business Registration Division
4. Create an operating agreement
5. Apply for an EIN
6. Submit a beneficial ownership information report

Step 1: Name your Hawaii LLC

Find a name for your Hawaii LLC. You’ll start an LLC in Hawaii first by choosing a name for your business. An original name sets you apart. It also tells potential customers who you are and what you do.

In addition to marketing considerations, though, you’ll need to follow the Hawaii DCCA rules for naming LLCs. Otherwise, your filing could be rejected, and you’ll be back at square one.

Hawaii LLC Naming Guidelines

Take your time in choosing an LLC name that represents your mission. You might have a few in mind already, or you may need to do some brainstorming. As you make your list, keep Hawaii’s LLC naming guidelines in mind, such as:

• Your name must be distinguishable from all other business names in Hawaii.
• Your company name must include a “designator” indicating that it’s an LLC. You must choose from “LLC,” “L.L.C.,” or “Limited Liability Company.” Limited may be abbreviated as “Ltd.,” and Company may be abbreviated as “Co.”
• The name can’t be intended to deceive, confuse, or defraud the public.
• You must avoid words that could make your business sound as if it’s a government agency.
• The name can’t suggest the business was created for an illegal purpose.
• Certain words suggesting a licensed profession or financial institution (for example, “CPA” or “bank”) may require additional paperwork and permissions. 

Conduct a Hawaii entity search

To comply with the first rule above, you’ll want to confirm that your desired LLC name isn’t already in use. You can conduct a Hawaii LLC search following the directions on our Hawaii business name search page. You won’t be able to file a duplicate company name, so it’s important to find a unique moniker. 

Technically, this search is only preliminary. You’ll need to get direct confirmation from the Hawaii Department of Commerce and Consumer Affairs Business Registration Division (BREG) to confirm if your name is available.

Federal and State Trademarks

Even if the BREG approves your business name, that’s no guarantee that someone else hasn’t already claimed it with a federal or state trademark. To truly check to see if your business name isn’t trademarked isn’t easy because there’s no one central place to check.

To get started, it’s recommended to run a trademark search with the U.S. Patent and Trademark Office. Then contact BREG to check that your name doesn’t infringe on any state trademarks. Alternatively, you can hire an attorney to check for you.

Securing a Domain Name

When you’re coming up with an LLC name, it’s wise to consider whether you can secure a matching domain name so that your future website can be easily found online. We have a tool to help you do a preliminary domain name search, and our domain name registration service can help you secure the online name that will best serve your company.

Is your Hawaii LLC name available as a web domain?

A web presence is invaluable in today’s business environment. You’ll need a website. But it’s best to have a web domain that matches your business name. That way, it’ll be easier for potential customers to find you online. To check if your domain name is available, use our domain name search tool. After that, our domain name service helps you find and purchase a domain name for your business. We can also help you create a business website and provide domain name privacy.

Then, it’s recommended to find matching (or similar) social media handles with your business name. From Facebook and Instagram to Pinterest and TikTok, establishing a social media presence can make it simple to interact with customers and grow your audience.

Reserving a Business Name

If you aren’t ready to officially register your LLC, you can reserve your business name via the Hawaii Business Express website for up to 120 days. The reservation can be done for a small filing fee.

Filing a DBA: Hawaii

A DBA (“doing business as”) name, known as a “trade name” in Hawaii, is a name your business uses that’s different from its legally registered name. In most states, businesses using a DBA name are legally required to register it with the state. However, Hawaii doesn’t require this step. LLC owners can choose to file their Hawaii DBA name, but it’s strictly voluntary. 

You might wonder why you should even bother with registering a trade name if it’s not required. Well, it does let others know that you’re claiming rights to the name. The registration process will also let you know if anyone else is claiming the right to use the name.

Step 2: Appoint a registered agent in Hawaii

Next, designate a registered agent for your LLC in Hawaii. This is a requirement for all Hawaii limited liability companies.

What is a registered agent?

A registered agent receives legal paperwork (such as service of process and subpoenas) and certain official government notices on behalf of your limited liability company. That can include paperwork such as business licenses or state compliance documents.

Hawaii Registered Agent Requirements

The Department of Commerce and Consumer Affairs will reject your LLC filings if your registered agent doesn’t meet Hawaii’s criteria. The agent must:

• Be an individual resident of the state OR a business entity with authority to transact business in the state
• Have a physical street address (no P.O. boxes)
• Be present at that address during normal business hours

The agent’s presence during regular business hours is especially important; there are consequences if the state needs to locate your registered agent and can’t find them. The process server wouldn’t be able to deliver a legal notice to your business. As a result, you’d risk not knowing about a court case against you, and with it, the opportunity to defend yourself in court.

Hawaii Registered Agent Services

Under state law, you can technically serve as your own agent, appoint a friend or family member, or hire a registered agent service. Generally, it’s recommended to hire a registered agent service. A third-party service presents a host of benefits: 

• Keep your documents organized
• Never miss a crucial notice
• Free you up to run errands, travel, and focus on growing your business
• Move your business office without filing additional DCCA paperwork
• Avoid the embarrassment of being served with a lawsuit in front of a customer or employee

Our registered agent service can fill this role for you seamlessly.

Step 3: File Hawaii Articles of Organization with the Business Registration Division

File paperwork known as the Hawaii LLC Articles of Organization with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division (BREG). This essentially legitimizes your business in the eyes of the Hawaii government.

Filing official government documents like this can be intimidating and/or complicated for many people, which is why we’re here. With our business formation plans, our professionals will file for you to make sure it’s done quickly and correctly. But, although we can handle this for you, we’ll show you how the process works below.

File with the Hawaii Department of Commerce and Consumer Affairs

You can file your Hawaii Articles of Organization online or by email, postal mail, or fax. To file online, you’ll have to use the Hawaii Business Express system on the Hawaii Department of Commerce and Consumer Affairs website.

For postal mail, you’ll complete the paper Articles of Organization form and mail it to:

Department of Commerce and Consumer Affairs
Business Registration Division
P. O. Box 40
Honolulu, Hawaii 96810

Regardless of your filing method, you’ll need to pay a non-refundable $51 filing fee (as of this writing). You can expedite your filing for an additional fee.

Articles of Organization Requirements

For the Articles of Organization, Hawaii requires the following information. Be aware that this information becomes public once submitted:

• The complete LLC name (including the designator)
• The business address
• The name and address of your registered agent or registered agent service
• The name and address of each LLC organizer. The instructions for filing Articles of Organization for an LLC in Hawaii require you to certify you have at least one member.
• The duration of the LLC (if not perpetual)
• Whether your LLC will be manager- or member-managed. If member-managed, list the names and addresses of all the initial members. If manager-managed, list the name and address of the manager(s) and the number of initial members. 
• Your signature

The form also has boxes to check regarding liability. Most people check the first box, which states that the owners won’t be personally liable for the debts, obligations, and liabilities of the company, which is one of the main reasons for forming an LLC.

Step 4: Create an operating agreement

Make an operating agreement (OA) for your LLC. While it’s not a legal requirement to have a Hawaii operating agreement, it’s wise to have one.

An OA clearly defines the terms of ownership and management for an LLC.  And, without one, you’ll be subject to Hawaii’s default rules for LLCs, which might not reflect the wants of yourself and the other members.

Benefits of an LLC Operating Agreement: Hawaii

Here are some of the benefits an OA offers to owners of an LLC:

• Prevent and resolve conflicts: A good agreement clearly delineates the roles and responsibilities of each member, along with how much profits they receive (and when), which can often cause disagreement. The OA can also set a strategy for conflict resolution.
• Protect your corporate veil: The OA gives additional proof that your LLC is treated as a separate legal entity. If your business ever gets into legal trouble, this makes it more difficult for the plaintiff to come after your personal assets.
• Set up the future of your business: Your agreement will dictate how to add or remove members, your management structure, what happens if you’re ever incapacitated or need to leave the business, how to sell or dissolve the business, and so on. 
• Customize rules for your business needs: Your OA’s terms are customizable, letting you pick the approach that works best for you instead of the state’s default rules. 

Feeling unsure as to how to create an agreement for your LLC? We offer a customizable template to help get you started.

Do I need an operating agreement if I’m the only owner?

Even if you’re a single-member LLC, it’s still a good idea to create an operating agreement. Not only does it help solidify your personal asset protection, but it also helps clearly define how your business would be handled if anything happened to you. Plus, if you want to partner with any investors or potential business partners, they’ll probably want to see your agreement.

Choosing a Management Structure for Your LLC

One key aspect of your OA will be defining whether your LLC will be member-managed or manager-managed. This decision is pretty crucial and should be set out from the get-go. 

In a member-managed LLC, the owners are directly responsible for the operation and management of the LLC. This is especially common for small businesses where the owner(s) wants to be directly involved in the business operations. 

In a manager-managed LLC, the members appoint managers to run the business for them. These managers could be third parties hired to run the business or they could be some of the members who are designated to be managers. This approach is popular for LLCs with members who want to be sideline investors. 

In your agreement, you get to pick the approach that works best for your business’s unique needs and goals.

Step 5: Apply for an EIN

Get an Employer Identification Number (EIN) for the business. You’ll need an EIN, also referred to as a Tax ID Number or Federal Tax Identification Number, from the Internal Revenue Service (IRS) if you have more than one LLC member, hire employees, or meet certain other criteria. Most banks will also require an EIN for opening a business bank account.

You can get your Hawaii LLC’s EIN through the Internal Revenue Service website, by mail, or by fax. If you’re not fond of dealing with that particular government agency, we can get it for you. Our EIN service is quick and eliminates the hassle.

Register for Hawaii taxes

As a Hawaii business, you’ll have a variety of tax requirements. The foremost one is the State of Hawaii Basic Business Application. This will help you get your tax accounts set up. 

But there are plenty of other taxes to address. Here’s a glimpse: 

• General Excise Tax (Hawaii’s substitute for a sales tax)
• Employer’s withholding (if you have employees)
• Transient accommodations
• Rental motor vehicle
• Tour vehicle
• Car-sharing
• Vehicle surcharge
• Cigarette and tobacco
• Liquor
• Fuel

Can filing as an S corp or C corp lower my taxes?

While we’re talking about taxes, we should mention a popular topic: S corporation status. The luxury of an LLC is that you can pick the taxation structure that works best for you. By default, LLCs are taxed as pass-through entities, meaning the profits are only taxed once, at the individual level when the members report their share of the profits. 

But in some cases, an LLC might opt to be taxed like a C corporation or an S corporation. C corporation taxation allows for the widest range of tax deductions. S corporations can give businesses a break on self-employment taxes. 

But we can’t tell you specifically whether being taxed as an S corp will lower your personal tax burdens; the advantages vary from business to business. If you’re curious about which tax strategy would be best for you, we highly recommend consulting with a local tax attorney. They’ll give you customized guidance for your financial situation.

If you decide to form your LLC with an S corp status, our S corp service can help you do that.

Step 6: Submit your LLC’s beneficial ownership information report

Now that Hawaii has approved your Articles of Organization, it’s time to file a beneficial ownership information report, or BOI report. This filing was introduced at the beginning of 2024 when the Corporate Transparency Act went into effect. The act strives to counteract financial crimes like money laundering by making it harder for organizations to use shell companies to hide their illicit activities. 

To accomplish that goal, the act requires LLCs to disclose the names, addresses, and identifying documents of their beneficial owners. In your LLC, a beneficial owner is anyone who owns 25% or more of the ownership interest, exercises substantial control over the business, or gets significant economic benefit from its assets. Failing to disclose this information can have severe criminal and civil penalties. 

Thankfully, filing is pretty simple: just submit a BOI report online directly to the Financial Crimes Enforcement Network (FinCEN), or download their PDF, fill it out, and upload it. Filing is free, too, and limited to the federal level. Just be sure to file on time; if you organize during 2024, you’ll have up to 90 days after you get your formation documents approved. If you organize in 2025 and beyond, that timeline drops to just 30 days. LLCs that existed prior to 2024 have until January 1, 2025. 

You can learn more about the BOI report and its requirements on FinCEN’s website. And if you’d like help filing this form, check out our BOI report filing service.

Steps to Take After Forming Your LLC in Hawaii

After successfully establishing your LLC in Hawaii, it’s important to take additional steps to ensure your business operates effectively and remains in compliance with state regulations.

Getting Business Licenses and Permits

Determine and obtain any necessary business licenses and permits specific to your LLC’s activities and location within Hawaii. These are essential for legally operating your business, but requirements vary from one LLC to another. For example, while Hawaii doesn’t have a general business license at the state level, your city or county might administer one. 

On a similar note, many LLCs need to get licenses or permits that apply to your industry. If you’d like help with this step, you can use our business license report to streamline the process. 

Setting Up an Accounting System

Establishing a robust accounting system is crucial for financial management, tracking expenses and income, and preparing for tax obligations. This will aid in maintaining your LLC’s financial health.

You have lots of accounting options available to you: using a spreadsheet, downloading accounting software, hiring a professional, or even using our ZenBusiness Money tool. The important thing is that you pick one for your LLC and use it regularly.

Opening a Business Bank Account

Once you’ve secured an Employer Identification Number, you’ll be able to open a business bank account. Having separate accounts for business and personal banking is critical for tax time and helps you avoid commingling funds.

Commingling funds not only makes your taxes more difficult, but it could also be used against you. This could happen if someone takes you to court to challenge whether you and your LLC are truly separate entities.

We offer a discounted bank account for your new LLC. This allows for online banking, unlimited transactions, a debit card, and more. If you want to authorize others in your business to use the account, we offer a banking resolution template to simplify the process. You might also want to think about getting a business credit card to start building a credit history.

Staying Informed About Legal Requirements

Keep abreast of legal and tax obligations pertinent to your LLC in Hawaii. This includes staying updated on changes in business laws and tax regulations. These obligations can change at any time, so if needed, maintain a regular consultation with a tax professional or business attorney to stay up to date. 

Benefits of an LLC

An LLC is a popular business structure in Hawaii because it presents a lot of benefits. Here are a few of the perks LLCs enjoy: 

• Personal asset protection: Limited liability protection is a huge perk of an LLC. Because an LLC is a distinct legal entity, it can be responsible for its own business debts and liabilities. If the LLC is sued or defaults on a loan, usually only the LLC’s assets can be seized. Creditors usually can’t come after the personal assets of the owners. (Note: this protection isn’t all-powerful; if you don’t treat your LLC like a separate business entity, your corporate veil can be pierced and your assets could be compromised.) 
• Streamlined operation: LLCs are easier to form and operate than corporations. Hawaii doesn’t require LLCs to hold shareholder meetings, draft bylaws, keep detailed records, and so on. In most cases, an annual report and staying up-to-date with taxes and licenses is all a Hawaii LLC needs. 
• Tax flexibility: Like we mentioned in Step 5, LLCs can choose the tax structure that’s most advantageous for the business. For some, that’s the default pass-through taxation. But others might opt to be taxed like a C corporation or S corporation, if it’s beneficial to their overall tax burden. 

Learn more about the benefits of the LLC business structure.

Correcting Filing Mistakes

If you discover errors in your Hawaii LLC formation documents, you can correct these by filing Articles of Amendment with the Hawaii Department of Commerce and Consumer Affairs. This process involves outlining the specific corrections needed and submitting the form along with a $25 filing fee. Ensuring accuracy in these documents is vital for maintaining your LLC’s legal standing.

Dissolving Your Hawaii LLC

Dissolving an LLC in Hawaii involves several key steps. First, you should consult your LLC’s operating agreement for any specified dissolution procedures. After this, the LLC members must agree to dissolve the LLC (in accordance with the written agreement), typically through a formal vote. 

Once agreed, you’ll need to file the Articles of Termination with the Hawaii Department of Commerce and Consumer Affairs. It’s also important to settle any outstanding liabilities and distribute remaining assets among members according to the LLC agreement or state law. Ensuring all business affairs are properly concluded is crucial for a smooth dissolution process.

For more information on this process, check out our guide to dissolving a Hawaii LLC.