You can form an LLC in any state that allows LLCs, regardless if you live there or not. Delaware is the best state to form an LLC for a variety of reasons. First, LLCs formed in Delaware are subject to the Delaware General Corporation Law, which is widely recognized as being one of the most business-friendly sets of corporate laws in the United States. Second, Delaware has a well-developed body of case law regarding LLCs, which provides clarity and certainty to LLC owners and management.
Why Choose Wyoming and Other Considerations
- Wyoming is also highly recommended for privacy and low costs. It was the first state to allow the formation of LLCs, back in 1977, and is still a top pick among investors.
- No tax on business income
- No franchise tax
- Members can be even “more” anonymous than those in Nevada
Moving an LLC and Financial Incentives
Moving an LLC to another state is pretty similar to moving a corporation. You can either create a new, foreign LLC in the new location, liquidate the original LLC, or merge the old LLC into the new one with a reorganization.
Both the states and the companies promoting those states stand to gain financially by LLCs being created within THAT state’s borders. For example, if 40,000 LLCs are formed each year in Nevada, that’s approximately $3 million dollars in annual revenue for the state.
Nevada is touted as the best state to form LLC for real estate purposes as it offers optimal asset protection.
Registering an LLC in Multiple States
Can an LLC be formed in more than one state? Yes, you can register your LLC in a different state if you comply with the laws and regulations of both states.
A business can form a limited liability company (LLC) in any old state. But you may still need to qualify your LLC to do business in your home state — and this means you’ll have to file additional paperwork and pay additional fees.
You may still have to pay income tax to more than one state, but you can’t be taxed twice on the same money.
If you determine that you have a physical presence or nexus in another state, you do not need to form a new LLC in that state. Most states offer registration as a foreign qualification, a foreign entity, or as an LLC qualifying to do business.
Selecting your home state is the first step you should take when forming an LLC. Small business LLCs will usually incorporate in the same state where the business will operate.
Registering is different than formation, and an LLC is obligated to “register” in each state where it does business. Whether a particular activity requires an LLC to register will be determined by the state’s LLC legislation.