Changes in Legal or Ownership Structure
As businesses grow they may make changes in their ownership structure. Some changes will require a new registration with the Kentucky Department of Revenue and/or the Secretary of State (with the exception of some sole proprietorships). You should consult your attorney and accountant to make sure you properly register any changes in your business structure or tax type. Below are some frequently asked questions:
- 1. Was there a change in your principal office?
- You will need to report the change in a Statement of Change of Principal Office, which needs to be filed with the Secretary of State.
- 2. Did your registered business agent or registered office change?
- Your business is required to report any change in registered agent or registered office as soon as those changes occur by filing with the Secretary of State.
Note: Every corporation formed in or doing business in Kentucky is required by law to maintain a registered agent and a registered office in Kentucky. For more information on registered agents, visit the Secretary of State's website.
- 3. Do you wish to change your business' corporate name?
- You can make changes to your business’ name by filing Articles of Amendment with the Secretary of State.
- 4. Do you need to update your taxing information?
- Changes to your business’ tax information reported to the Kentucky Department of Revenue can be completed by filing the 10A104 Update or Cancellation of Kentucky Tax Account(s).
- 5. Do you wish to change your business structure?
- Changes in business structure must be made through the Secretary of State. Your conversion or new structure takes effect on the date filed with the Secretary of State unless a later date is specified in the articles of organization.
Your business structure also has tax implications; you will need to file with the Kentucky Department of Revenue. For more information, visit the Choose a Name and Structure page on the Kentucky Business One Stop.
- 6. Do you wish to change your business' Articles of Incorporation?
- You can make changes to your business' Articles of Incorporation by filing Articles of Amendment with the Secretary of State.
- 7. Do you need to increase or decrease the total number of authorized shares in your business?
- You can make changes to your business’ number of shares by filing Articles of Amendment with the Secretary of State.
If you haven’t offered shares before, you may also need to change your business structure with the Secretary of State and Department of Revenue. For more information, visit the Choose a Name and Structure page on the Kentucky Business One Stop.
- 8. Did your business merge with another business?
- You will need to file Articles of Merger with the Secretary of State. A business corporation can merge with another corporation, a limited liability company, or a limited partnership. KRS 271B.11-010; KRS 271B.11-080. Nonprofit corporations can merge with another nonprofit corporation. KRS 273.277. Both types of mergers will have tax implications, and you are required to either newly register or change your existing registration with Kentucky Department of Revenue.
For more information view the Buying a Business, Merging and Franchises page of the Kentucky Business One Stop.
- 9. Did your company receive a new Federal Employer Identification Number (FEIN)?
- You will need to complete a new 10A100 Kentucky Tax Registration Application with the Kentucky Department of Revenue in order to receive new business tax accounts. If your business requires a new organization number, you will also have to register with the Secretary of State.
- 10. Do you wish to change your method of taxation? Example: LLC taxed as an S Corp changes election to be taxed as a Corporation.
- You will need to complete the 10A104 Update or Cancellation of Kentucky Tax Account(s) with the Kentucky Department of Revenue.
- 11. Did your company change from a Corporation to an S-Corporation?
- You will need to complete the 10A104 Update or Cancellation of Kentucky Tax Account(s) with the Kentucky Department of Revenue; the Secretary of State does not differentiate between Corporations and S-Corporations.
Closing a Business
You may wish to close your business for a number of reasons. Whether you intend to sell your business, retire or simply close, you have a number of legal, tax and employer obligations. It is important to consult both your attorney and tax advisor to ensure that you’ve completed the necessary steps. The US Small Business Administration provides a number of helpful resources if you are considering closing or selling your business. Below are some basic considerations to help you get you started:
Seek Advice: You will need the advice of your attorney and tax professional in formally beginning the steps to close your business. If you have partners or co-owners you will need to follow the steps you’ve agreed upon in business articles filed with the Secretary of State.
For distressed businesses: If your business is having difficulty for any reason, you should contact your local Kentucky Small Business Development Center which offers services and consultants free of charge to struggling businesses. You can also contact the Kentucky Cabinet for Economic Development to learn about programs which may be available to help your business stay open and succeed.
Organize and maintain your records: You are required to maintain tax and legal records for your business for up to seven years. Additionally, your financial records will be requested by state and lending officials.
Notify your employees, and follow worker protection rules: If you are an employer, you need to comply with state and federal laws. The State Rapid Response Team, part of the Kentucky Office of Employment and Training, is responsible for receiving employer notifications pursuant to the federal Worker Adjustment and Retraining Notification (WARN) Act. In most cases, a Rapid Response team member coordinates on-site services involving dislocated workers, employers, the community and other local resources and services available to help the employer manage the layoff and identify the specific needs of the affected employees.
File with the Secretary of State: When a corporation wishes to cease doing business, Articles of Dissolution must be filed with the Secretary of State if authorized by statute. Articles of Dissolution for a business corporation must comply with KRS 271B.14-030, and Articles of Dissolution for a nonprofit corporation must comply with KRS 273.313. A LLC must file Articles of Dissolution and comply with KRS 275.285. A partnership must file a Statement of Dissolution and comply with KRS 362.801-807. You should consult your attorney and tax professional for further guidance on required filings, or you may be held liable for taxes, fees and other financial obligations.
Cancel permits and licenses: If your business required any permits or operational licenses, you will need to contact your board of licensure to cancel those licenses.
File with the Department of Revenue: A business entity that ceases to operate in Kentucky has certain tax responsibilities to facilitate the closure of business tax accounts. A Kentucky Corporation and/or Limited Liability Company that is no longer operating is required to file a “final” corporate and/or limited liability entity tax return in order for those tax accounts to be closed; other business tax accounts may be cancelled by utilizing the 10A104 Update to Business Information or Cancellation of Kentucky Tax Account(s) form. For a business that files sales and use tax returns, the Sales Tax Permit must be returned to the Kentucky Department of Revenue.
Close existing business accounts: You need to notify all creditors and lenders if you have outstanding debt, and will need to work with them on a settlement arrangement. If you are unable to reach a settlement you should consult your financial professional, attorney, and local Kentucky Small Business Development Center
- Incentive Programs: If you have active incentive programs with the Cabinet for Economic Development, contact the Office of Financial Services/Compliance Division at 502-564-4554 or 800-626-2930 to notify the Cabinet that your business is closing.
Remember to cancel all insurance policies, bank accounts, and lines of credit associated with your business when you close.