jump to navigation

Where to form your LLC for virtual or foreign business activities September 17, 2008

Posted by Jeff Nabers in : real estate, Self Directed IRA Solo 401k , 9comments

When you form an LLC (or Corporation), it is registered and created at the state level. You can choose to form an LLC in any state, regardless of your state of residency.

Nexus

When you have business activity that clearly occurs in a specific state, you are said to have “nexus” in that state. If your LLC has nexus in a state, it will probably need to register itself in that state and pay any applicable taxes for doing business there. An LLC is a pass-through entity, meaning it is designed to have zero taxation because income taxes are paid by the LLC owner(s) on their tax return. Unfortunately, some states have created franchise and/or excise taxes that can be costly.

Virtual Businesses

If you are starting an internet business (or any other business that doesn’t create nexus in a specific state) you can choose to form your LLC in a state (more…)

LLC Registration – Choosing a state May 7, 2008

Posted by Jeff Nabers in : Self Directed IRA Solo 401k , add a comment

For many small businesses forming an LLC in your home state is the simplest and most convenient option. An LLC that does business in a state other than where it was initially registered must register as a “foreign LLC” (foreign meaning from a different state, not a different country) with the state in which it conducts business.

When an LLC is registered with a state, a registered agent must be named. This is the person or corporation designated to accept official documents on behalf of the LLC. This person or corporation must reside in the state of formation. If you are registering an LLC in a state in which you don’t reside, you’ll need to choose a person or corporation residing in that state to serve as your registered agent. There are many companies who provide a registered agent service for a nominal fee.

There are advantages to choosing certain states in which to initially register your LLC. Many large corporations choose to form an LLC in Delaware because (more…)