This article provides three key state business start-up requirements for self-employed sole proprietors and general partners who run residential house cleaning businesses. Information from the Secretary of State, the Kentucky Department of Revenue and selected city and county government sources were used to research this article.
Be aware that sole proprietor and general partner startup requirements in this state are always changing. Some requirements even vary from county to county. It is important that you call or visit your local county or city government to find out local requirements for residential house cleaning businesses and home-based businesses. This article is not intended to be exhaustive or a substitute for qualified legal or tax advice.
Business Name Registration
Sole proprietors and general partners who want a business name that does not include the owner(s) full names (for example, Janice Smith’s Cleaning Service or Martha Harris and Tom Graham’s Maid Service) need to find out whether the Assumed Name or DBA (“doing business as” name) name they want to use is available in the state of Kentucky. Start with a statewide corporate business name search to avoid legal problems and customer confusion.
Then do an online search for names similar to the one you plan to use. For example, if you want to use the name, Crystal Clean Maid Service, do simple Google searches for “Crystal Clean Maid Service+Kentucky” plus Crystal Clean Maid Service+your county” and “Crystal Clean Maid Service+your town or city”. Search beyond the first page of results. Go at least five pages deep into the search results to see if the name you want or similar names are being used in your county or city .
It is important to remember that the name must be different from any other name already registered with the state. If the Assumed Name is available, sole proprietors must apply for a Certificate of Assumed Name with the county clerk where the business will be located. Find a County Clerk in Kentucky.
General partnerships, known in Kentucky as Domestic General Partnerships, should file for a Certificate Of Assumed Name through the Secretary of State’s office.
In the Commonwealth of Kentucky, filing a Certificate Of Assumed Name does not guarantee a business sole rights to the use of that name. Other businesses in the state may also register similar Assumed Names. Registered businesses are expected to legally defend their Assumed Names.
Business License Registration
Sole proprietors and general partners do not have to apply for a business license with the Commonwealth of Kentucky. Residential house cleaning businesses must apply for a business license at their city or county clerk’s office.
Note: The Commonwealth of Kentucky provides an online business license and tax registration One Stop Business Portal that links to local cities and counties.
In Kentucky, a general partnership is created when two or more owners form an oral or written agreement to start a business together. It is advisable for general partners to file a copy of the state Certificate Of Assumed Name application with the county clerk where the business is based. A written partnership agreement drawn up by a lawyer is important for both or all partners. Partnership agreements do not have to be filed with the state.
Sole proprietors and general partners may apply for an Employer Identification Number (EIN) from the IRS even if they do not plan to hire employees. Getting an EIN may make it easier to open a bank account and reduce your risk of identity theft. You can apply for an EIN online. In addition, some business registration forms will require a a NAICS business classification number for the house cleaning industry.
Business Tax Registration
Residential house cleaning services are taxable in Kentucky. Cleaning services must collect and send sales taxes to the Commonwealth Department of Revenue. Sole Proprietorships & General Partnerships can register with the state for a Sales Tax Account, through the county clerk where the business is located.
Sole proprietors and general partners pay tax on business income to the state of Kentucky through their personal state tax return. Sole proprietors and general partners are responsible for paying estimated self-employment income taxes in Kentucky (on Form 740-ES) similar to the way self employment taxes are paid to the federal government. Get more information about estimated tax requirements by calling the Kentucky Department of Revenue at (502) 564-4581.
Kentucky general partnerships that file a Federal partnership information Form 1065, may need to file a state income tax return, K-1 (Form 765-GP). Get more information from a CPA or qualified tax preparer to find out if your partnership must file those returns.
Selected Kentucky City Licenses
Bowling Green Business License: https://www.bgky.org/finance/license
Lexington Business License: https://www.lexingtonky.gov/occupational-license-fees-filing-requirements
Louisville Business License: https://louisvilleky.gov/government/revenue-commission/business-licensing-guide
Owensboro Business License: https://www.owensboro.org/page/doing-business-in-owensboro