| 6:40 pm on Jun 10, 2004 (gmt 0)|
I just did this in Wisconsin. Filing the LLC application online was pretty easy and took about 5 minutes.
Two pieces of advice I would give:
1) Talk to a lawyer or accountant about this first. It might only require a 15 minute conversation, but it will be worth it.
2) Determine the other startup tasks you need to do (bank accounts, sales tax, federal tax id, etc) and get a hold of the forms you need for doing them. This will help you avoid having to redo any of them. In my case, I needed to have the LLC established to get the federal tax id and sales tax id. And I needed the federal tax id to set up the bank account. And you will likely need the federal tax id and/or the sales tax id to establish any wholesale or reseller accounts.
| 11:52 pm on Jun 13, 2004 (gmt 0)|
I would say that Wyoming is the best state as far as setting up an LLC (they are the state that invented the LLC concept.) They have the most case law and the best privacy of any of the states ( privacy -if you set up a corporation.) They have several advantages over Nevada.
Having said all of that...No matter where you live, if that state has income taxes then you will have to pay income taxes. If you lived in Wyoming then you would pay no income taxes since they don't have income taxes. Same for FL, TX, AK, and a couple others.
If you live in NY then the main advantage of filing in WY would probably be if you got sued. The laws of WY are pretty business friendly. BTW, if you have a WY LLC you would have to file as a "foreign entity" to do business in NY which would incur other fees.
I just recently set up an LLC in my home state because even though my state is not very business friendly, it ended up being better for me all around to set up here. I would consult with an accountant to go over the particulars in your case. Many accountants will offer a free 30 minute consultation.
Hope this helps.
| 12:02 am on Jun 14, 2004 (gmt 0)|
brizad: ditto. Utah isn't tax-friendly (jeez, do not EVEN get me started!), but considering the alternatives it makes ZERO sense to incorporate elsewhere unless BILLIONS are at stake - in which case, Nevada makes a lot more sense than Wyoming. (I grew up in Las Vegas. I saw it go from a mafia-run empire to a megalopolis where the cops ARE the mafia. However, the state as a whole lives and breathes the money-goddess - Wyoming still believes in the free-air and pure-life ethic....)
| 12:47 am on Jun 14, 2004 (gmt 0)|
I'm no expert, but I did research where to set up my business for several months. This is part of the reason that I considered WY over NV.
I found this on a website that sells BOTH WY and NV corps and LLC's so I take it as pretty accurate. But there are always many sides to every story.
Advantages of WY--
No State Income Taxes
No information collected to be shared with IRS
Shareholders are not listed with the state
Best Asset Protection Laws
Bearer Shares are allowed
Nominee officers are legal
Citizenship not required
State tax not being considered
Wyoming draws little attention
No Nevada "Stigma"
Lower Startup Costs
Wyoming state fees are 50% less than Nevada's. And that's not including the "hidden" officer filing fees that you learn about only after you start your company there. Nevada will hit you with a $125 fee 30 days after you start your company! Wyoming does charge an officer filing fee, 12 months after you start your company. The cost? $50 and that's the second years total state fee! Oh, and no state business license is required in Wyoming either. Just another "little" $100 per year hidden fee that they don't like to talk about in Nevada. All this means is we can deliver a quality company package to you for much less than you would pay in Nevada.
A Wyoming corporation or LLC offers its officers and directors a high degree of protection from lawsuits filed by disgruntled creditors or over zealous plaintiff attorneys. Doing business as a Wyoming Corporation can give you asset protection and business privacy. There is much information on this web site which outlines the benefits of using various types of structures. The first LLC statutes in the United States were instituted in Wyoming in 1977. Since Wyoming has had limited liability companies available longer than any other state and has strong laws protecting members and managers of an LLC, we feel it is the state of choice for establishing LLC's.
Wyoming allows Bearer Shares, Nominee Officers and Lifetime Proxies. Attorneys and Accountants are often asked to provide an anonymous "company cover" for their clients. To do this you need to have possession of the "bearer share" stock certificate and appoint nominee officers and/or directors for the company. We can arrange this for you. See this section for the advantages of Lifetime Proxies, Nevada does not have them.
You can operate your Corporation and live anywhere in the world and you do not have to be a US citizen to incorporate in Wyoming. But in order to give substance to your operation you should know about our Office Service Contract and learn how use of this inexpensive option will give "presence" to your remote corporate operations. And if are not a US Citizen we have a whole section for you to read here.
No State Taxes
There are no State taxes in Wyoming on corporations. If you choose to incorporate in Wyoming your company may not pay State taxes at all. Stop for a minute and think what you paid last year in your States income tax. If you are comparing Nevada and Wyoming, keep in mind that the Nevada State Legislature is being lobbied hard to install a corporate income tax. Don't gamble that this will not happen. Wyoming never has and never will have a state income tax on corporations. It is one of the only states with a budget surplus!
Easy to Move
Wyoming has made it easy to move your existing corporation to Wyoming. Something you can not do in Nevada.
Special Easy to Use Corporate Structures
Wyoming has Close Corporations. These are special companies authorized by the Wyoming Legislature for small business owners. Less paperwork is required to keep them going. Few states have them.
Wyoming now has Close LLC's. Less paperwork. Less time to manage. Perfect for a closely held family company.
| 1:13 am on Jun 14, 2004 (gmt 0)|
brizad: the single factor in your post which has more relevance FOR WY and AGAINST NV is the "Nevada stigma".
It's silly, but that's how it is.
[Consider that the site to which you refer may have concessions from EACH state, and may make more concession-wise from WY than NV. NV has no need to pay concessions no matter the currency.... and also consider that I do NOT live in NV (since 1990 - my husband since 1994), so I don't really give a rat's ass beyond the benefits or lack thereof under discussion.]
[Edit: as to ease of moving llc to WY opposed to NV, I have a friend who just moved out of UT into NV - took about 5 minutes....]
| 11:16 am on Jun 15, 2004 (gmt 0)|
Great info brizad and everybody else. That gives me a lot to chew on. Thanks!
| 1:14 pm on Jun 15, 2004 (gmt 0)|
Great post Brizad...thanks for the wonderful info. and breakdown.
|...but considering the alternatives it makes ZERO sense to incorporate elsewhere unless BILLIONS are at stake... |
Does anyone have reasons why it would be worthwhile for small to medium size businesses to set up their corporations in a more tax friendly state?
Do the potential benefits outweigh the potential risks, problems, and hassels?
| 4:40 am on Jun 16, 2004 (gmt 0)|
As far as a major advantage of setting up a *corporation* (not an LLC) I would say that WY offers the best privacy, as far as keeping the corporate officers and shareholders completely secret.
There are lots of ambulance chasing lawyers out there. If someone wants to go after your assets (money) for any number of reasons (divorce, car wreck, just to screw you) all they have to do is pay $25 to any number of websites and find out EVERYTHING about you.
If your name, social security number, date of birth, etc. are not able to be found then no one will know that your assets exist. In the end I decided against it because an LLC worked out best for me. I suppose when I get rich enough that it would be practical, I might move or set up a "residence" in a tax free state like WY, FL or TX.
Rockefeller once said the secret of his success was to "Control everything but own nothing." That would be the main reason that I have found to incorporate in WY.
| 7:44 pm on Jun 28, 2004 (gmt 0)|
There is an interview out there on the net that anyone who is looking to start a business should read. The interview is with Robert Kiyosaki and a buisness professor if I remember correctly. He explains why someone should set up a Corporation, not an LLC, and some of the benefits of having it in a state like NV or WY.
Many people don't realize why Corporations were started and look at you like you're an idiot when you say that American Airlines has a unique corporation for each jet in it's stable.
The audio file that I have is labeled "Cash Flow - Secrets about Corporations"
| 8:03 pm on Jun 28, 2004 (gmt 0)|
Anytime I see that Wyoming stuff repeated as if it were true, I am compelled to reply. Just as with Viagra websites, don't believe everything you read.
That website is in the business of selling NV and Wy corps. That's why they make them look so good.
Take a separate look at the state asset reporting requirements for corporate officers in WY. They want to know your assets in detail, and they charge a separate tax on your assets holdings as well. They are in the business of knowing who controls the corp and where their money is, separate from the formal paperwork of starting a corporation. There are many avenues of privacy. Maybe it will be hard for Joe Public to know who you are (privacy?) but the state will know, and Joe Public will know that the state knows.
Check out the Bank Account requirements in Wy. They will want a WY driver license, and they will want details from the check signers/money controllers. Regardless of State corporation paperwork requirements, the Bank will do whatever it wants, and post 9/11 that means fingerprints and driver licenses for account openers or accessors.
Again, Joe Public won't know from your corporate filings who you are, but he can follow the money to the bank.
Let's not even go close to nominee shareholders... check the fine print and you will see they can break all conractual obligations on the slightest whim, leaving you not only exposed but without representation in a foreign state. In addition, many will include clauses that enable them to pass accountability on to you *and* liability for any harm they may incur as a result of your activities.
Business is best done with a whisper and a handshake.... and it's hard to do that from across the country. You need a really good reason to incorporate far from home. Lot sof public hsareholders is a good reason. High product liability is another. Divorce precedent is another. Privacy generally is not.
| 8:31 am on Jun 29, 2004 (gmt 0)|
Personally I like Florida and Delaware. I'm a Florida resident so it makes great sense for me, but Delaware has it's attractions also.
Most of it comes down to tax and liability, the rest of the stuff won't apply to most of us.
Florida is good for tax and great for protecting the company/trust/asset owner.......ask OJ!
| 2:55 am on Jul 12, 2004 (gmt 0)|
Look into local "opportunity zones", state grants and state development programs. Often times they will compensite for the costs that you won't get for filling out of state corporations.
Plus it looks good when you can get the mayor, local town people and even the governer to recognize you ;)