How To Start A Business In Hawaii (2024 Guide)

You will form your business under a specific name, so start by choosing a name for your business. This could be a brand name you want to use publicly or just a name you’ll use officially for the business entity.

You can choose almost any name you want for your business, as long as it:

• Is not being used by another business entity registered in Hawaii and not too similar to an existing entity. You can use the name search through Hawaii Business Express to see whether your preferred name is available in the state.
• Doesn’t include words or abbreviations that imply it’s a different kind of business entity than it is. For example, an LLC can’t include “Corp.” or “Inc.” in the name.
• Doesn’t imply it’s a bank, trust, insurance or public service company; or a profession that requires a license, such as an architect, a doctor or an engineer.

Your registered business name is required to include words or abbreviations that indicate the structure of the business, including:

• Corporation: Corporation, incorporated, limited, Corp., Inc., or Ltd
• Limited liability company: Limited liability company, ltd. liability company, limited liability co., ltd. liability co., L.L.C. or LLC
• Limited partnership: Limited partnership, L.P. or LP

Beyond these requirements, consider the following when choosing a business name:

• Do you want it to include your personal name or stay open to growing beyond you?
• Do you want it to reflect the current products or services you offer or be flexible to pivoting in the future?
• Will you use this name as the business’s trade name (public brand), or are you creating a business entity that can hold any or many brands you create?

If you want to create a business entity that can hold other brands, you can use a DBA (called a trade name in Hawaii) for those other brands that’s in line with how you present them publicly and makes it easy to treat each as its own asset within your company.

If you know the name you want to use for your business but aren’t ready to register the business yet, you can apply to reserve a business name for up to 120 days for a $10 fee.

Choose the Right Business Entity

The business entity you choose for your company depends mainly on the structure of ownership in the business, as well as the potential future of the business.

• If you’re the sole owner of the business, you might run a sole proprietorship or a single-member LLC. You don’t have to register a sole proprietorship. If you want legal and financial separation from your business, you can register an LLC.
• If you’re a small business with multiple owners, you could register for a limited partnership (LP) or an LLC. LPs are most common for licensed professionals, such as attorneys or accountants.
• For a more complex business, you’ll likely choose between an LLC versus a corporation. A corporation is usually necessary if you want to bring on investors, and it might make it easier to sell the company in the future.

File Articles of Organization or Incorporation

Articles of organization create an LLC, while articles of incorporation create a corporation. You can register a business in Hawaii online through Hawaii Business Express, which will walk you through the information and forms you need to provide. You start by creating a free eHawaii.gov account with your email address. The cost to file your articles for an LLC or corporation in Hawaii is $50.

Once you’ve created an account, you’ll need to provide basic information about your LLC through the articles of organization, including:

• Members’ name(s) and address
• Primary business address
• Business name
• Member liability
• Duration
• Name and address of the registered agent (RA)
• Management structure of the business

Choose a Registered Agent

A registered agent is the person designated to receive and file legal and financial documents for your business with the state. You can list yourself or another member of the business’s management, or you can work with a professional Hawaii registered agent who’s a member of the state bar.

Member-Managed vs. Manager-Managed

You’ll have to note whether your business is member-managed or manager-managed if you register an LLC. “Managed” in this case refers to control over business operations (as opposed to lower-level “management” positions). Here’s the difference between member-managed and manager-managed businesses:

• Member-managed means all the LLC’s members (owners) automatically operate the company. It’s the most common operational structure for a small business.
• Manager-managed means you designate managers of the company. They can be members or not, and not all members need to be managers. This structure works best for a company that wants to attract silent investors, has a lot of owners and wants to consolidate leadership among a small number, or needs to hire an experienced operator who isn’t an owner of the business.

Once your business is registered, you can apply for an EIN, an employer identification number, with the IRS. This is the tax ID number for the business entity, and you’ll use it for the business in most of the same places you use a Social Security number for yourself: opening financial accounts, filing taxes, W-9 forms, etc.

Single-member LLCs are not required to obtain an EIN unless they have employees, although one may be necessary to open a business bank account.

Applying for an EIN is free, and you should receive the number immediately when you apply online.

Once you have your EIN, you can register for a state tax ID with Hawaii Tax Online.

You don’t need a general business license in Hawaii just to operate your business. You need a General Excise Tax License, which gives you your tax ID for the state.

You also need to apply for specific business licenses and permits if you operate in an industry that requires it. For example, you’ll need to apply for a federal license or permit if you work in a field regulated by a federal agency, such as:

• Agriculture
• Alcohol
• Aviation
• Broadcasting
• Firearms
• Fish and wildlife
• Mining
• Nuclear energy

You need a professional license with the state if you’re conducting regulated business, such as real estate, law, construction or engineering. And you need state or local permits to conduct a regulated activity, including selling alcohol or operating a restaurant.

Fees for licenses and permits vary by industry and location, and you might have to get licenses from multiple agencies that regulate various types of business activities.

No law or regulation requires you to use a business bank account for your finances if you’re the owner of an LLC. But opening a bank account and other financial products in your business’s name and using them for all business-related finances is the simplest way to keep your accounting straight and ensure your personal assets are protected from business liabilities.

The most basic type of account you need is a business checking account. You could open an account for your business at a legacy institution where you already do your personal banking or choose an online bank with features designed to cater to small businesses.

The best bank for your business depends on your financial circumstances and business needs.

Once you open a checking account and, if applicable, a savings account, credit cards or loans in your business’s name, use them exclusively for business income and expenses. You can usually link your accounts directly to accounting software such as QuickBooks to make tracking and tax filing easy.

Depending on your industry and structure, you might be required to buy business insurance for your company. Even if it’s not required, insurance can protect your business in case of liabilities.

General liability coverage is the most common type of business insurance. It covers you in case customers claim your business is responsible for bodily injury or property damage (think: slip-and-fall lawsuits).

If you have employees, you’ll be required to purchase workers’ compensation insurance and unemployment insurance with the state regardless of your industry.

Once you’ve made it official, it’s time to start growing your business! Your marketing efforts will vary depending on the kind of business you run, but most businesses at least need an online presence and a way to organize information about inventory and/or clients.

You can manage your online presence for a low cost and without a ton of effort by setting up a website with a free website builder and scheduling social media posts through social media management software.

You can use free or low-cost inventory management software to keep track of your products and sales, and a free CRM (customer relationship management software) to keep track of communication with your prospective clients or customers.
Marketing might also include other efforts, such as buying digital and print ads, hosting events, attending networking meetings and creating promotions and discounts.

As a small business in Hawaii, you could join the Hawaii Chamber of Commerce or reach out to the local office of the Small Business Administration for additional support and resources to help you grow and protect your business.

Bottom Line

You can register a business in Hawaii with relative ease and low cost, with total startup costs depending on the type of business you want to operate. You’ll come across some terms and questions in the process that you might not have considered, but if you follow this guide and consult an attorney about your situation, you are prepared with everything you need to get your business up and running in Hawaii.