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Doing Business in NY with a Delaware LLC

Discussion in 'Business & Tax Advice' started by TeKn1qu3z, Feb 14, 2015.

  1. TeKn1qu3z

    TeKn1qu3z Jr. VIP Jr. VIP Premium Member

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    Hey,

    I am from New York and am looking to sell my services in NY. I read online that LLC in Delaware is better than getting a NY LLC because they have better laws that are in the owners favor. Anyone have experience and is in my shoes?
     
  2. jahaz

    jahaz Regular Member

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    I'm not sure about LLC from my understanding the best is Delaware c corp is an industry standard for startups. You already are going to get "double dipped" tax wise for LLC. I would just get an LLC in NY. I am not an expert.
     
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  3. NutraCash

    NutraCash Regular Member Premium Member

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    I have a Delaware LLC simply because of the privacy and protection they offer. Also being
    no state taxes in Delaware, there is nothing to pay on.
     
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  4. TeKn1qu3z

    TeKn1qu3z Jr. VIP Jr. VIP Premium Member

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    Anyone have any other opinions? I just heard that if I were in a law suit, the laws would be more in my favor. So that's one attractive reason, not that I am trying to get sued..

    I have also heard there are some tax benefits.
     
  5. neu009

    neu009 Jr. VIP Jr. VIP

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    I'd check with a CPA. Often you have to register your out of state entity when doing business in your home state, thus in the end you end up paying the same. NY state has a req where you need to publish any new LLC in the papers, thus if you are in NYC this can become very costly.
    Remmeber LLC is pass through , including ~13.6% self employment tax, which you will probably end up paying in taxes if you go for a s corp.
    Anyways look into the different fees states charge yearly to maintain the LLC and how much profit you currently or projected make a year. This will determine which option is the best in the long run.

    Edit, s/c corp and LLC both provide a shield from your private assets its mainly depending on different taxes etc. LLC has self employment tax(thats why they refer to double taxation) and corps have hgher fees usually for payrill, taxes etc.

    This is no tax advice and just my opinion so go talk to a CPA for detailed info.
     
  6. neu009

    neu009 Jr. VIP Jr. VIP

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    That depends if you actually live in delaware or not. LLCs are pass through so they go to your taxes and are taxed at your rate + ~13.6%\LLC are no seperate entities in terms of taxes. But since this is very complex the OP may want to talk to a CPA etc. to be on the safe side in terms of taxes etc.

    Again no tax advice just my opinion. Pls do your own research.
     
  7. fuzzy_corleone

    fuzzy_corleone Regular Member

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    You do have to pay a flat tax of $250 annually.
     
  8. TeKn1qu3z

    TeKn1qu3z Jr. VIP Jr. VIP Premium Member

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    Just wanted to note again, I am from NEW YORK. I will be doing business mostly in NY as well.

    Hopefully some similar New Yorkers are on here and see this and can relate.
     
  9. Paranoid Android

    Paranoid Android Jr. VIP Jr. VIP

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    DE LLC is the best from what I have read, I got one too. You need to get a Foreign status license in NY fo ryour LLC and file it at DE so taht you get excempt from DE state tax, and you will need to pay NY state tax. NY state tax is a tad bit higher than DE state tax, so you might want to consider hiring a consultant for an hour on elance for about $50 and discuss this.

    You could still get a mailbox in DE, and invoice your clients with that address and just pay DE state tax, like I'm doing.
     
  10. TeKn1qu3z

    TeKn1qu3z Jr. VIP Jr. VIP Premium Member

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    How much different is the tax rate? What other benefits are there and do I need to have a DE mailbox?
     
  11. Paranoid Android

    Paranoid Android Jr. VIP Jr. VIP

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    your registered agent in DE should be able to offer you a mailbox. I know DE taxes are quite less than NY tax rates. You could google for state tax in the US and fine out. Its best to run your business out of DE, should be ok as long as you're doing business online and are not running a store sort of thing.
     
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  12. TeKn1qu3z

    TeKn1qu3z Jr. VIP Jr. VIP Premium Member

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    Thanks, you've been a great help. Now I need to find someone who deals with this, and hopefully that someone can be the same guy who does my taxes
     
  13. sully1975

    sully1975 Jr. VIP Jr. VIP Premium Member

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    I have two DELAWARE LLCs since 2010. I foreign filed them to my state of NJ. I actually took my first one and backwards converted into into a series llc (which most people don't understand, nor like). Can be handy for certain things, but that is another story.

    The Delaware chancery court is for big time disputes. every time Donald Trump's entity goes tits up it is in a DE court. Not so much for the little guy, but if you have your heart set on it.

    Make sure whatever you do you actually fill out an operating agreement.