Kentucky LLC vs Delaware LLC (2026)
Compare Kentucky LLC vs Delaware LLC — filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.
| Factor | Kentucky | Delaware |
|---|---|---|
| Filing Fee | $40 | $90 |
| Processing Time | 3 day(s) | 7 day(s) |
| Annual Report Fee | $15 | $300 |
| Annual Report Due | June 30 | June 1 |
| State Income Tax | Yes | No |
| Anonymous LLC | No | Yes |
| Publication Requirement | No | No |
| Foreign LLC Cost (if forming out-of-state) | N/A — you're in your home state | ~$120 + registered agent ~$200/yr |
Verdict: Kentucky wins for most businesses
For most Kentucky-based small businesses, forming in Kentucky is significantly cheaper and simpler than Delaware. Delaware only makes sense if you need anonymous ownership or have sophisticated investors requiring Delaware formation.
Filing Fees & Formation Costs
Kentucky's $40 filing fee is significantly lower than Delaware's $90 fee. However, if you form in Delaware while operating in Kentucky, you'll also need to register as a foreign LLC in Kentucky for around $120, plus hire a Delaware registered agent for about $200 annually. This makes Delaware formation roughly $370+ more expensive in the first year alone.
Taxes: Kentucky vs Delaware
Kentucky imposes state income tax on LLCs, while Delaware has no state income tax for LLCs. However, Delaware charges a minimum franchise tax that can range from $300-$20,000+ annually based on assumed par value or gross receipts. Most small businesses will find Kentucky's income tax more predictable and often lower than Delaware's franchise tax structure.
Privacy & Asset Protection
Delaware allows anonymous LLC formation where member names aren't publicly disclosed, while Kentucky requires member disclosure in formation documents. Both states offer strong charging order protection for single-member and multi-member LLCs. Delaware's anonymity feature is its main advantage, but this benefit may not justify the extra costs for most small businesses.
Annual Maintenance Costs
Kentucky's $15 annual report fee is dramatically lower than Delaware's $300 minimum franchise tax. If you form in Delaware while operating in Kentucky, you'll pay both states' annual fees plus ongoing registered agent costs in Delaware. This creates an annual cost difference of $500+ in favor of Kentucky for most small businesses.
When Delaware Actually Makes Sense
Delaware formation is worthwhile if you need anonymous ownership to protect privacy, plan to raise venture capital (many investors prefer Delaware entities), or operate in multiple states where Delaware's legal precedents provide advantages. For single-location Kentucky businesses with no privacy concerns or investor requirements, Kentucky formation is almost always the better choice.