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Where to form an LLC

Discussion in 'Business & Tax Advice' started by jshaw, May 31, 2010.

  1. jshaw

    jshaw Newbie

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    Does anyone have any recommendations with regards to, first of all, websites that do all the groundwork for you?

    Secondly, the state I should form my corporation in. Would either Nevada or Delaware be preferable?

    Thanks!

    If it's relevant to either issue, I'm a non-US citizen.
     
  2. kel1400

    kel1400 Newbie

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    I believe wyoming is the number one place to form a corp.
     
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  3. C.S.A.

    C.S.A. Junior Member

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    Do your research on the taxes. Then remember that if you have a physical corp presence in a state, you may need to pay state taxes just the same as if you were incorporated there. California is one such state.
     
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  4. jshaw

    jshaw Newbie

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    Well this would be for IM so I'd only have a physical presence abroad. It's my understanding that I wouldn't be required to pay taxes to the IRS in a tax haven state such as Nevada, Delaware or Wyoming.
     
  5. java

    java Guest

    New Mexico is very popular due to the easy of creation and the limited amount of reporting and information required. Basically your only ongoing expense is an agent for service which runs about $100/year.
     
  6. imperial109

    imperial109 Regular Member

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    Don't file for a Corporation. Register as a sole proprietor. Corporations get taxed twice.
     
  7. nixnash

    nixnash Power Member

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    these services are bit too costly...it cost just $80 to form a llc and in Ny where its most expensive it cost $120 , this was about 1 year back...not sure about now..
    For a SSN , all you need to do is fill an online form..., maximum including aa agent it should cost you $500 , even if you spend lavishly....i contacted few law firms , they charged me about $1,000...very costly..opening bank account could get messy as someone from the bank comes to yoru office before opening a bank account.
    Hope it helps
     
  8. Fwiffo

    Fwiffo Power Member

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    If I was going to incorporate in the US:

    nevada
    - no need to declare who "owns" the company
    - low taxes (lowest in the US?)
    - well established non-nevada corporate structures
    - low municipal taxes (for the city you incorporate in)

    If I was going to go outside the US:
    Caribbean - Caymans or Turks & Caicos
    Canada - Alberta (low tax)
    Europe - Channel Islands or Gibraltar

    As a note - Sole Proprietor doesn't remove liability from the individual - under LLC liability is limited to the company (ie if the company gets sued or runs into excess debt that it can't handle, that debt cannot cover over to the individual unless there is a personal guarantee on it)

    Just my 2 cents. Check with proper legal / accounting council before making decisions on this.
     
  9. bradsteves

    bradsteves Registered Member

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    You would still need to pay and file IRS taxes regardless of the state you select. States in the US have a variety of different ways to tax you. Nevada does not have a personal income tax(most do).
     
  10. jonnyquest

    jonnyquest Regular Member

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    agree with BradSteves. Your fed tax is based on PROFIT not revenue ... so keep track of your expenses.

    JQ
     
  11. LiamLC

    LiamLC Regular Member

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    If I live in say... California, can I make an LLC in Nevada?
     
  12. JimmyTheGimp

    JimmyTheGimp Newbie

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    Corporations are only taxed twice if the corporation in question pays dividends. Keep the corporation showing no profit and it can't pay dividends and will pay NO tax. Thia can be done quite legally.
     
  13. drdoc

    drdoc Newbie

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    To clarify:
    1) Delaware is chosen for corporations since VCs believe that the Delaware courts are particularly well versed in corporate law. The reason to incorporate in Delaware hence is only if you are looking for investors or going for an IPO.
    2) If you are going for an incorporation outside your place of residence you might have to pay taxes twice: once at the place of incorporation and second at the place of your domicile. California for example wants you to register as a foreign corporation if you do business in California.
    3) The difference between LLC and corporation: on a technical (read mostly irrelevant) note: LLCs are inventions on the state level, unlike corporations which are tax regulated on the federal level.
    In regards to taxation there is NO DIFFERENCE between an LLC and an S-corporation. An S corporation is a normal (that is C-type corporation) that has filed a paper with the IRS that it wants to be an S- type corporation. Both an LLC and a S corporation do not pay taxes themselves, but pass the income/expenses/gain/loss through to their members or shareholders.
    4) If you setup a C-corporation, which is the type of legal entity under which all the publicly traded copmanies operate, you pay taxes twice if you pay dividends. Take McDonalds as an example: McDo pays taxes on its profits and when you as the shareholder receive dividends you have to pay taxes again.
    However, you may reduce your profits by paying yourself as a contractor (1099) or an employee of the corp..
    5) If you are a sole proprietor you have personal liability. Someone sues you (because you are a black hat), you have to pay with all your personal assets. If you have a corporation, you just let the corporation go bankrupt and start a new one.
    If you are serious about your business, you should incorporate.
    6) Some courts do not fully accept LLCs, which means courts are sometimes willing to pierce the corporate veil for single member LLCs and allow creditors to attach your personal assets. Hence, incorporate as a corporation and give two percent of your shares to your parents, wife, etc. so you no longer are a single member entity.
    7) From a post above it was interesting to learn that in Nevada you do not have to show who the owner/shareholder of the corp. is. However, don't mess with the IRS. Declare your taxes ! Cayman islands or other tax havens only make sense if you have income from around the world and only want to pay taxes in the US for your US portion. If you use tax havens for anything else, you risk your existence once the IRS catches up with you and the IRS is getting better internationally.

    PM me if you have more questions.
     
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    Last edited: Jun 22, 2010
  14. vivalafeva

    vivalafeva Jr. VIP Jr. VIP Premium Member

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    short answer is, your own state is best
     
  15. askHWH

    askHWH BANNED BANNED

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    u are a non-US right ?

    can't u pick an offshore registration ?

    Why in particular choose US ?
     
  16. gobodyfitness

    gobodyfitness Newbie

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    Check out legalzoom.
     
  17. massivepast

    massivepast Newbie

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    Nevada is great. Corporate veil only pierced a few times ever.
     
  18. No Limits

    No Limits Junior Member

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    What is the advantage you are looking for when looking around the US? Tax breaks, ability to sue, tax status? there are many different company structures in different states that do different things. Without knowing what your goals are, we are guessing.
     
  19. Venture

    Venture Regular Member

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    ^ this. used them myself. setup an LLC and my total cost was around $750
     
  20. advio12

    advio12 Registered Member

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    I would avoid states wher4e taxes are high, I think CA is one. Also try not to get the LLC right before the yearly taxes are due, I think in CA its June or July, and is around $800. I personally would do Nevada, and set up virtual office if need be.