Where should I register my company?

October 9, 2007 3:57 AM

I'm going to register my company as an LLC. My next question is where? Which US state is the best for this?

I posted a Q here a few weeks ago, and you guys really helped me out (thanks!)

http://ask.metafilter.com/70013/A-new-business

I'm now curious about where you think I will be taxed the least and deal with minimal hassles. I heard good things about WY, NV, and AL - but a google search reveals only adverts and little data.

I think I can register in any state I choose to and the process of becoming an LLC seems like something I can do myself just via a state's website. If you have any experience with this, please share it. I'm really a newbie. Bonus points if you can indicate a trustworthy accountant in the state who can file taxes for the company once formed and do any legwork that I can't do myself. Cronyism/nepotism ok.

Thanks a lot!

posted by mateuslee to work & money (4 answers total)

I've been a shareholder in an LLC, and in a S-Corp. I have to tell you, that the choice of where you register, will depend largely on the particulars of your business, and how you'll present it in other states. You'll probably need informed legal counsel, to do this properly, unless your proposed business is trivially local, and has no "foreign corporation" issues.

Significant problems in this area can haunt you for years. A current client of mine is still dealing with Indiana personal income tax issues, from 1987, that have accrued as a result of his minority interest in an S corp, that was registered in Delaware, for less than 7 months of the 1987 tax year. The company he had an interest in owned and rented some plastic chipper machines, to an Indiana factory, back then. The rental income collected by the S corp, as a foreign corporation in Indiana, was subject to different tax laws, than would an Indiana "S corp" have been.

"Who knew?" says my client.

"Pay up." saith Indiana... 20 freakin' years later.

Fortunately, I don't do taxes, or interstate law, and only heard the story, and saw the documents, recently, in passing...
posted by paulsc at 4:37 AM on October 9, 2007

When i was setting one up, I had two lawyers suggest that while there might be tax advantages to a Nevada or Delaware LLC, if there ever was any legal action, it would require actually doing court-related things in those states, so I picked my home state to keep any legal hassles to a minimum down the line.
posted by mathowie at 5:03 AM on October 9, 2007

Register where you are doing business. If this is an internet related business, register in the state where your office is located. I am not a lawyer nor an accountant though. You may want to ask the question over at the Startupping forums.
posted by zackola at 6:59 AM on October 9, 2007

I think I can register in any state I choose
Sure you can but this may not be very wise, depending of the kind of business you do. Also a LLC may not be the best solution for you in the long run.
As a starting point: http://www.amazon.com/Inc-Grow-Rich-Cheri-Hill/dp/0967187109
posted by yoyo_nyc at 7:09 AM on October 9, 2007