Small Business Start-up Guide (Click HERE to download this information in a PDF document)
1. Contact Planning & Zoning to determine if your desired location is properly zoned. One can visit the City of Richmond website www.richmond.ky.us to view information.
- From the homepage select the Department tab on the left-hand side of the page.
- Once selected a new menu of choices will appear, select GIS.
- From the selected page there are numerous maps to help you locate your zone. However, if you would like further assistance please call Planning and Zoning at 859-623-1000.
- Occupancy License
Every person and business entity engaged in any business in the City shall be required to apply for and obtain an occupational license from the City before the commencement of business or in the event of a change of business status at a cost of $25.00. Licensees are required to notify the city of any changes in address, the cessation of business, or any other changes which render the information supplied to the city in the license application inaccurate. For more information please visit the City of Richmond’s Website at www.richmond.ky.us.
2. Decide what type of business organization you would like to create.
Kentucky Secretary of State: http://sos.ky.gov/
All businesses must obtain a business license from the City regardless of organization. However, not all businesses must register with the State. These are only guidelines and not to be considered legal document. Please consult your account or attorney to determine which form fits your needs.
A sole proprietorship is owned and operated by an individual. It does not have a separate existence apart from its owner. No filing with the Secretary of State is necessary to form a sole proprietorship, but if the sole proprietorship is operating under assumed name, an assumed name filing with the county clerk is required. The individual owner is personally responsible for the debts of the business.
A corporation is a business organization that is separate and apart from its owners. A corporation has the same powers as an individual to do all things necessary to carry out its business. A board of directors manages the corporation and officers are responsible for the daily operations of the corporation. Shareholders are not personally responsible for the debts of the corporation. A corporation is formed by filing Articles of Incorporation with the Kentucky Office of the Secretary of State.
A general partnership is an association of two or more persons to carry on as co-owners of a business for profit. KRS 362- 175. No filing with the Secretary of State is necessary to form a general partnership, but if the general partnership is doing business under an assumed name, an assumed name filing is required with the Secretary of State and county clerk. An Application for Certificate of Assumed Name is available on the Kentucky Secretary of State website www.sos.ky.gov. Generally, every partner is an agent of the partnership and is personally responsible for the debts of the partnership. KRS 362.190; KRS 362.220.
A limited partnership is an association of two or more persons with one or more limited partners and one or more general partners. KRS 362.401 (7). Limited partners are not personally responsible for the debts of the limited partnership unless they participate in management of the partnership. KRS 362.437. General partners are responsible for managing the business of the partnership and are personally responsible for the debts of the partnership. KRS 632.447. A limited partnership is formed by filing a Certificate of Limited Partnership with the Secretary of State. KRS 362.415. More information on forming a limited partnership is available on the Kentucky Secretary of State website (sos.ky.gov).
Limited Liability Company
A limited liability company is an unincorporated business organization formed by filing Articles of Organization with the Secretary of State. A limited liability company may be managed by members or managers. The members and managers are not personally responsible for debts of the limited liability company. The main advantage to choosing a limited liability company over a corporation is that LLC members enjoy limited liability but the entity can be taxed as a partnership, which is a more favorable tax treatment.
Registered Limited Liability Partnership
(1) A registered limited liability partnership is a partnership that is registered with the Secretary of State. KRS 362.555. Each partner is personally responsible for the debts of the partnership except for the debts of the partnership arising from negligence or misconduct committed by another partner while the partnership is a registered limited liability partnership. KRS 362.220 (2) A registered limited liability partnership is formed by filing a Statement of Registration with the Secretary of State. KRS 362.555. More information on registering as a limited liability partnership is available on the Kentucky Secretary of State website (sos.ky.gov).
3. Determine if you must file for a Federal Employment Identification Number (EIN).
If you answer “Yes” to any of the following questions then you must file for an EIN number.
- Do you have employees?
- Do you operate your business as a corporation or a partnership?
- Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
- Do you withhold taxes on income, other than wages, paid to a non-resident alien?
- Do you have a Keogh plan?
- Are you involved with any of the following types of organizations?
- Trusts, except certain grantor-owned revocable trusts, IRAs, Exempt Organization Business Income Tax Returns
- Real estate mortgage investment conduits
- Non-profit organizations
- Farmers' cooperatives
- Plan administrators
In most cases this number can be obtained online via the IRS website (www.irs.gov).
Additionally, if you provide health insurance for your employees, you may need a National Standard Employer Identifier (NSEI) for your electronic health transactions. To determine if you need an NSEI, refer to the Department of Health and Human Services' website (http://aspe.hhs.gov/admnsimp/faqemp.htm).
Additional information for starting a business and complying with Federal regulations may be found in the IRS publication, Checklist for Going Into Business, and can be obtained at http://www.sba.gov/library/pubs/mp-12.pdf
4. Apply for a business licenses and permits.
City of Richmond/Madison County – Contact Madison County Finance Director: (859) 624-4742
The City issues licenses for businesses located either inside the City limits or in the County. Below is the process for obtaining a business license.
- Complete application and submit to City Hall.
- If completed application is hand-delivered to City Hall then license will be issued immediately.
- If your business is located in the county you will need to talk with the Madison County Business Director.
Kentucky Revenue Cabinet
All businesses must be issued a state tax number. The application can be obtained online at: http://revenue.ky.gov/business/register.htm
Kentucky Office of Employment and Training
The KY OET handles all unemployment insurance issues for the State. You must be registered
and issued an unemployment insurance tax ID number. To access their online services visit: https://kewes.ky.gov/.
Kentucky Workman’s Compensation Board
Coverage is required by the State for any employer who has one or more employees.
Information can be obtained from your local insurance agent.
Social Security Administration
All businesses must contact the Social Security Administration to establish payment of social security taxes. Much of the information related to this topic can be found on the SSA business services website (http://www.ssa.gov/bso/bsowelcome.htm) or you may call the local office at (270) 685-3931.