Hey folks, make sure to check the site for most up-to-date information: www.llcuniversity.com/best-state-to-form-an-llc/. Or select your state and start forming your LLC with our free guides: www.llcuniversity.com/
LLC University hey, can you answer: how do I set up an LLC in US from England uk? I’m English. Starting business in real estate in US! So.. - how to set up? Where’s the best cities to set up? I’m looking for cities (to do real estate) in population between 500,000 to 1mil. Can you help me buddy?
LLC University. Enjoyed your videos....I set up foreign qualification NY chose Delaware for LLC many reasons big one is Chancery Court pro business state...Protecting/ Not piercing The Corporate Veil Business operations in NY Please Advise jb
We'll soon be coming out with guides on setting up LLCs for non-US residents/citizens. The LLC formation process is nearly the same for non-residents and residents, however we also have articles that'll help. EIN without SSN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/_, Form 5472 (www.llcuniversity.com/irs/form-5472-foreign-owned-llc/), and opening an LLC bank account if you're a foreigner (www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/). Hope that helps!
LLC University. Thank you again great info....REVERSING MY LLC SETTING UP DOMESTIC LLC IN NY WHEN THE COMPANY GROWS WITH BIG BUCK INVESTORS STOCK ETC...WILL DISSOLVE THE DOMESTIC AND GO FOREIGN QUALIFICATION Delaware AGAIN CHANCERY COURT PRO BUSINESS AS A CORPORATION INC ETC...YOU!!! LLC UNIVERSITY ARE BRILLIANT FOR DOING THESE VIDEOS....AGREE LLC IN HOME STATE. CORPORATION FOREIGN QUALIFICATION FOR STOCK- OPTION- PURPOSES ETC..JB
Thanks Tenzack! I saw your other comment about New York and Delaware. If you form an LLC in Delaware, but are doing business in New York, you'd have to register your Delaware LLC as a foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in New York. Hope that helps.
My understanding is that the advantage in forming an LCC in certain states is legal protection if you're operating as a single member LLC. I say that because I'm told that in those certain states, and in certain situations I guess, the law "shields" you from a judge ruling that a creditor can take from your business if you go through a personal bankruptcy or the other way around since you were in sole control of the business. Which kind of irks me because the entire reason I want to form an LLC is to have a complete separation between myself and the business.
Hey Christopher, I'm not very familiar with personal bankruptcy details, but I do know that forming an LLC in a state which has charging order protection may be slightly better from an asset protection standpoint. Then again, it all needs to be taken with a grain of salt. For example, if you form an LLC out-of-state (for these protections), but are doing business in your home state, you'll need to register as a Foreign LLC there. Further, if you're tried in court, the judge gets to choose which states' laws apply. I'd recommend chatting with a few asset protection lawyers in your state for clarity. That should iron out some of the details. Check out Avvo: www.avvo.com/
Yes, this is correct. Those child LLCs are registered to do business but are owned by a parent LLC instead of being owned by you personally. We'll have videos on this set up soon. We just try not to overwhelm too many people as the majority of our viewers are just getting started. Thanks for your understanding.
Bad advice. You didn't mention or education your viewer on the privacy and asset protection benefits of forming companies in those states. Again... bad advice.
Hey Steve, sorry to let you down. You're right. The video could address many more points. We will certainly talk about your suggestions when we produce the updated version of this video. Thanks for taking the time to leave your thoughts.
First of all, thank you so much not only for this video but for all the information in your website! It’s been really helpful!! I have a question I hope you can answer: I’m a US citizen but not a resident and I never lived as an adult in the US. I plan to form an LLC to run an e-commerce business and maybe also some income from affiliate marketing. My guess is that I can form the LLC in any state, is that right? Now what about if I’m thinking to move to the US in 1 or 2 years from now. Should I form it right now in the state I might live in? Thanks again! 🤜🤛
Hi Jorge, you're very welcome! Thank you for the kind words :) Yes, that is the most common route to go.... form the LLC in the state where you will soon be moving to. For most, that is the best long-term setup. Hope that helps.
Found this video while looking for clarity on whether I should form my online business in Indiana or..... Delaware, etc. My mentor just did what you said NOT TO DO. And he gave me advice... For some reason it just did not sit well. I'm already a skeptic and I always have to do my own research. The stars are in my favor because I reside in a business friendly state: Indiana. I chose to be an online business because I love to be mobile and I have the travel bug pretty bad lol. Thanks for the information. I am grateful for you! Oh... And I SUBSCRIBED 😁😁😁
Then you can pick any state, including Delaware. You don't have to live in the US to form an LLC in the US. Apologies for the confusion. We're going to update the video title to provide more clarity to non-US citizens and non-US residents.
Thank you for this information. If I am running an online business and I’m a student attending college outside of my home state where would you suggest forming the LLC? I do plan on operating during the school year (in NC) and during breaks at home in FL.
Hey can you create a parent llc in your home state.. But create a child llc or a completely different llc i guess with a different ein number... at another where you'll make your money with that entity at that state? Please answer if you can as either both or only one of the scenarios.. And why or why not.. Please
That is quite a complex question to unpack and there's a lot of nuance and details that would go into that. It would be better address to an attorney and/or a tax attorney. Just too much to type out here in a comment. Thanks for your understanding. Short answer is yes. Pros and cons... to complicated to get into.
this is super super helpful i find no information regarding this matter nowhere else really. all the agents either donno about what they are talking about or trying to get you to work with them and pay them.
Many thanks for this video, cleared up a lot. Question: Forming an LLC in cali, which will be a subsidiary of a corporation in japan. Do you suggest having the corporation being one of the LLC members? and if so why? What are the advantages and disadvantages? thanks in advance.
You're very welcome. If the CA LLC will be a subsidiary of the Japan Corporation, then the Corporation would need to be an LLC Member. That's how the Corporation would own the LLC. Hope that helps.
Hey. I am going to have an online business so would I still have to pay two fees? I would like to use Delaware or Wyoming or Kentucky and I live I Ohio (one of the worst stars to get a LLC from) like you said you pay taxes where the money is made and my money would be made across the nation. So two fees or only one?
Hi Bentton, even if you have an internet-based business, you cannot get around your state’s tax obligations simply by forming your LLC out-of-state. Why do you think Ohio is a bad state to form an LLC?
Thanks a lot man for this video it was really helpful and rich in knowledge. One question though buddy, I am starting an online e-commerce business and I don't live in USA, I live in Pakistan. If I don't live in the US and form an LLC in Wyoming, will that be uselful? I would've gone with Nevada but since it has fraudulent activity I ain't forming my LLC there, so it is useful to form an LLC in Wyoming if I don't reside in the US? Thanks man, subscribed. :)
You're very welcome! We recommend to a lot of our non-US resident readers to "work backwards" from the bank account, since that's where people get stuck. We've put together an article about it here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Take a read through and let me know if you have any questions (please leave them in the comments section of the page) and I'll get back to you there. Thanks.
Question, if my husband and I reside in California and are looking into buying residential real estate properties in Texas to use as rental properties, do we need a Texas LLC and a CA LLC? With no way around having to have both?
Hi Cinthia, you'll be "transacting business" in both states. The most common setups are an LLC formed in California (and registered as a foreign LLC in Texas), an LLC formed in Texas (and registered as a foreign LLC in California), & a California LLC that owns a Texas LLC. California is very strict when it comes to the definition of doing business. You can find more details here: www.llcuniversity.com/california-llc/doing-business-in-california/. Here is info on foreign LLC registrations: www.llcuniversity.com/what-is-a-foreign-llc/. Hope that helps.
I am unsure whether I am required to appoint a registered agent if I am forming an LLC in my own state of residence, Rhode Island. Could you please clarify whether it is mandatory to appoint a registered agent when forming an LLC in Rhode Island, even if I reside in the state? I would greatly appreciate any insight or guidance you can provide on this matter. Thank you for your time and expertise. I look forward to hearing from you.
Yes, a Registered Agent is required for a Rhode Island LLC. However, the Registered Agent doesn't have to be a company (aka a Commercial Registered Agent). It can be yourself or someone you know. We have more details here: www.llcuniversity.com/can-i-be-my-own-registered-agent-in-rhode-island/
You are overlooking the fact that you form a Wyoming LLC to be a holding LLC and form a local LLC in your home state. You do not register the Wyoming LLC in your home state, that would destroy your protection. The Wyoming LLC will own the local LLC, you register BOTH LLCs as disregarded entities. This gives you total protection on BOTH LLCs while the tax responsibility flows through to you as if the LLCs didn't exist.
Excellent comment. We originally made this video as an intro for beginners. Many of which don't want to deal with extra fees. Apologies we didn't make that clear. Using an LLC as a holding company to own other LLCs is a solid strategy.
Thank you for the video. It is very informative. I do have a question though. I live in Colorado and looking to buy rental properties in Texas. The money will be made in Texas but some administrative tasks will be performed in Colorado. Would the same advice apply? I should forming the llc in Colorado instead of Texas? Thanks
Hi Linh, you're welcome. It's a bit flipped around with real estate investing... since the LLC will be doing business where it's collecting rents; in this case, Texas, so you can form an LLC(s) in Texas.
Dear Matt Horwitz, I hope this message finds you well. I have been researching the process of forming an LLC and came across your recommendation to form it in my own home state. However, I wanted to discuss a specific concern I have regarding LLC formation in Rhode Island. In Rhode Island, the annual cost of maintaining an LLC is quite high, as there is a requirement to pay $400 in taxes regardless of whether the company is actively conducting business or generating profits. This can be a significant financial burden, especially for smaller businesses or startups. Considering this, I have been contemplating the possibility of forming an LLC in a different state where the costs might be more affordable. While I understand that there are benefits to forming an LLC in my home state, such as familiarity with local laws and resources, the financial implications are making me reconsider. I would greatly appreciate your expert opinion on this matter. Given the expensive nature of LLC formation in Rhode Island, do you still believe it is necessary or advisable for me to form an LLC in my own state? Considering the cost-effectiveness of forming an LLC in a foreign state where I do not reside, would it be a viable option for me? Thank you for your time and insight. I look forward to hearing your professional advice on this matter. Best regards
If you form an LLC out of state you're supposed to then register it as a "foreign LLC" where you're transacting business. In that case, you'd pay even more. However, these rules are not strictly enforced, so many can get away with forming an LLC out of state and not registering it in their home state. If you were to explore that route, check out Ohio LLCs. Very affordable and easy to setup.
Hello, So I am wanting to start an LLC for a new online only business, although I am planning on moving from Idaho to Florida either this winter or start of next year. In this Scenario what would you recommend?
Hi Gabo, if you have physical presence, like employees or office where people are working for your business, then you'll want to form the LLC in that state, since that's where you're transacting business. If not, as a non-US resident, you can choose any state you'd like. The LLC formation process will be regular (like everyone else) and you can follow instructions on our site: www.llcuniversity.com/50-state-llc-guides/. However, how to get an EIN and a bank account are different. Here's how to get an EIN (after the LLC is approved): www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/. Here's how to open a bank account: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. And if your LLC has 1 owner, you need to file Form 5472 each year: www.llcuniversity.com/irs/form-5472-foreign-owned-llc/. Hope that helps.
How about the article publication fees? I live in New York and I just formed an LLC here. But I just found out it requires to publish article from three news papers and the fee is very high... Could you give some advices about that? Should I close it and form another foreign LLC or form a DBA instead?
Hi Karen, please watch this entire video to fully understand. In short, I don't think it's best. If you form out-of-state, you'll still be required to register your out-of-state LLC as a Foreign LLC in NY. Now you'll have 2 LLCs, additional costs, and you'll still need to meet the publication requirements. I recommend following our guide here (www.llcuniversity.com/new-york-llc/publication-requirements-part-2/) and publishing your ads in the county where your LLC is located. It's an unfortunate cost of doing business in NY. Also, take a look in the sidebar after clicking that link. You'll find instructions for your Operating Agreement and your Federal Tax ID Number (EIN). Hope that helps. Let me know if you need anything else.
Why would you need to register in your home state, if you do business online? How would your state ever know when the registered agent is the actual place of business location as registered with the llc in the states you're saying not to?
Hi Tawan, unfortunately, states don't care about the internet. If you're running the business from home, then you are doing business in the state where your home is located. These are known as "doing business" or "transacting business" laws. The location of the Registered Agent has zero impact on where an entity is doing business. Hope that helps.
Hi Chris, if you are doing business in CA, you'll have to register your out-of-state LLC in CA anyway (and pay the $800 franchise tax), so it's actually more expensive since you'd need to maintain 2 LLC filings... and you'll still have to meet all of CA compliance requirements. Hope that helps.
Hello I have an online business and my home is in California but I travel full time. I wanted to form my Llc in Wyoming with a virtual office service and registered agent in Wyoming. Do I still have to form my Llc in California?
Hey Bells, California is very strict when it comes to doing business. Strict in terms of both corporate law and tax law. We recommend forming the LLC in California if that's your state of residence. We have some helpful data points about "doing business" in California here: www.llcuniversity.com/california-llc/doing-business-in-california/. Hope that helps!
Hi Matt, it is great knowledge that you pointed out. I have two questions. First, I just registered a video production LLC in Wisconsin. Do I need to pay tax in other states if I am going there to recorder the video? I will do the post production at my home state. Do I need to register foreign LLCs in those state I need to do recording? Second question, if I have projects work with other companies in another state doing post production. It could be working either at home state or the other state. Are they going to make differences in file tax? Thank you very much for your time.
Likely no, you will not need to file taxes or take care of foreign LLC registrations because of shooting and post-production activities in other states. You should be fine with just a domestic Wisconsin LLC and filing with the Wisconsin Department of Revenue. Having said that, if you are earning "substantial" income or are partaking in "substantial" business activities in these others states, you may need to file an informational tax return in these states, but apportion your income to Wisconsin. Meaning, you tell these states that you're paying taxes on this income in Wisconsin. But again, you'll need to discuss this with an accountant or two to go over the nuances. Try using our "knights of the roundtable" strategy for this one: www.llcuniversity.com/how-to-find-an-accountant-for-your-llc/
It's really about the state laws of "transacting business". Your LLC needs to be formed and/or registered in the state(s) where it is transacting business. Even though the business is online, the state's don't care. You are operating and running that business from somewhere. The state where most of those activities takes place is most likely where your LLC is transacting business. If your LLC is transacting business in multiple states, it'll be originally formed in one state and then it should be registered as a Foreign LLC in the other states where it's also transacting business.
In the case of Non resident person what would be the best state to setup the business LLC ? is it ideal to incorporate in Delaware ? And if do the goods imports from other country can I import any part(port) of the USA please clarify
Hi Shanmuga, we're not familiar with import/export rules, so not sure. If you form your LLC in one state but are doing a lot of import in another state, their is a chance you may need to register your LLC as a Foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in the other state. Will you have an office or employees in the U.S.? Will you be importing goods a lot into a particular state? Will you be doing business in a particular state?
so if I am resident in Nevada but has rental property in California. where should I registered? NV has no state income tax so I am not facing double tax right? thanks!
Hey CC, where an LLC should be formed (and if necessary, registered as a foreign LLC), comes down to where the LLC is doing business. You'll be doing business in CA and possibly NV, too. Or maybe just CA... we cannot address these issues, as there are laws for each state and there are details to them. You may just be okay with forming an LLC in CA. You may need to form an LLC in NV and register it as a foreign LLC in CA. Or you could form an LLC in CA and register it as a foreign LLC in NV. I do that you'll need to pay the $800 annual franchise tax and file Form 568 in CA. We have more info on doing business in CA here: www.llcuniversity.com/california-llc/doing-business-in-california/. Here is info on what a foreign LLC is: www.llcuniversity.com/what-is-a-foreign-llc/
Hey love the video very in sighting, and helpful. I have a question for you tho: does LLC's work for just investments in the US only? Also I'm thinking about creating an LLC to be used for a couple investment propertied in the Caribbean will the LLC work for those type of overseas investments?Can I use my credit score an finances to invest in the LLC? will this put me at a dis advantage where people can now sue me personally because the investment came from my personal assets?Thanks Again
You're very welcome :) If you contribute money to the LLC, that does not eliminate your personal liability protection. You'll need to check with the jurisdictions in the Caribbean and elsewhere re: your specific situation, but the short answer is yes, there are typically to restrictions like that. Hope that helps!
My business is virtual and this gives me the freedom to move around. I often live in a state for a year or two and then move. What is the best way to form an llc in my situation?
I hear you. So many businesses are these days. But you still have state laws (laws about transacting business) and taxes. It may be a good idea to speak with a tax attorney to determine where your LLC will primarily be transacting business and set your LLC up there.
Thanks so much for this, quick question ( I hope) what if I'm a commissioned insurance agent and don't sell in the state where I reside? Meaning my sales come from TX, CT and PA and the commissions come from companies located in different states than that? Thanks in advance.
It's more so where you are working OUT OF, now where you're customers/clients are located. Many business have clients in multiple states. Does that help?
Hello, please advise what address I should use when creating a new LLC in NY. We don't have yet a physical space. We are planning first to create the LLC and then find a place.
We have all the NY address information spelled out more easily on our website. Check out the NY LLC Course and just follow the "detailed lessons" in order: www.llcuniversity.com/new-york-llc/. Hope that helps :)
Hi Norinn, you can form an LLC in Washington D.C. by registering with the Department of Consumer and Regulatory Affairs. 1. Search your desired LLC name: corp.dcra.dc.gov/Account.aspx/LogOn?ReturnUrl=%2f (you'll have to create a free account) 2. Select a Registered Agent. See here for your options: www.llcuniversity.com/llc-Registered-Agent/ 3. File the Articles of Organization and pay the $220 filing fee. This can be filed online or by mail. The link from #1 will take you to the online filing. 4. Complete your LLC's Operating Agreement: www.llcuniversity.com/operating-agreement 5. Get your EIN from the IRS: www.llcuniversity.com/federal-tax-id-number-ein We don't have our step-by-step guide on D.C. live yet (but we will soon). In the meantime, if you have any questions, contact the Washington D.C. Corporations Division at 202-442-4400. Hope that helps! -Matt Horwitz
I currently reside in California, want to start an online business selling on amazon. “Where the money is made” is potentiallly all over the US. Would I have to apply for a foreign LLC to all the states from which my customers buy my products?
Hi Attack, no you won't have to register in all the states where you make sales. Just California to start, since you are doing business there. Please see here: www.llcuniversity.com/california-llc/doing-business-in-california/
Thanks for the information. I wish I had seen this video before I set up my original LLC in Nevada. I have two, the other being in my home state of Washington but I do want to keep my two businesses seperate as I sell Hemp based products from one and do regular eCOM and other gig consulting, ride share etc etc from the other. The question is does it make sense to eat the set up fees for the Nevada LLC and pay for a second LLC in Washington or now that I have set them up should I just focus on making $$$ and worry about taxes later?
Hey Ron, interesting question, and I'm not able to tell you specifically, however, if I were in that position, I'd focus on the sales and revenue, and then clean things up in a bit as needed :)
hey awesome videos! What if im a freelance designer that has a home base (parents house) in one state but travel around to other states since I work from my laptop. Do I have to pay taxes for those states too since i was doing work while i was there? Also, when it comes to deductions, I read that you can claim part of your home/appt as your office for deductions. Since im not always working from my office does this still count? thanks!
Hey Conrad, thanks man! Tax questions have a ton of variation and nuance to them, so things are not black and white. Having said that, you most likely will not need to pay income taxes in the states you travel to as your accountant will most likely feel you don't have nexus there. And yes, for deductions, you can claim a part of your home/rental expense. Again, this is gray, but most people just make it look they are working from one location. Who needs to know you travel around all the time? Hope that helps a bit. I'd phone a few accountants. They'll each spend 5-10 minutes with you at no charge. Some recommendations here: www.llcuniversity.com/how-to-find-an-accountant-for-your-llc/
Dude Wyoming LLC is one of the only states that has Charging Order Protection. Which means it's the flip side. What if you get sued personally? Then they can take your LLC from you, but not in Wyoming. Protection goes both ways. I think you should speak to an attorney before giving advise about certain things.
Hi Ant, thanks for your comments. Many states have charging order protection, but you're right, Wyoming is strong. We'll have guides on setting up WY parent LLC owning LLC in state where doing business soon. This video was also a part of our intro series. Thanks for your feedback.
So if I want to open my company Vintacex LLC in Wyoming but in reside in Houston, I would be paying more money in the long run? what if I purchase a office space in Wyoming but I still live in Houston and I constantly report the money is being made from my office space . would that be a win for me or still a hassle in the long run?
Hi Jah', what is your goal? Just saying the money is being made in one location, but it's not actually being made there may be breaking multiple laws. If your LLC is actually "transacting business" in Texas, a Wyoming LLC would need to be registered as a foreign LLC in Texas. There may be some other ways to structure things though.
You're welcome. We don't have a specific video on this yet, but it may be a good idea to "work backwards" regarding the bank account. We have info on foreigners opening US LLC bank accounts here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Once you choose the state, you can also get an EIN for your LLC without an EIN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/). And you'll also want to read about the Form 5472 + 1120 requirements for Single-Member LLCs owned by foreigners: www.llcuniversity.com/irs/form-5472-foreign-owned-llc/. Hope that helps!
So if my real estate investment property is in TX and I live in CA then will I still be required to register that out-of-state (TX) LLC as a Foreign LLC in my home state (CA)?
Haha, you got it! ;) Now, having said all that, CA is a bit "strict" when it comes to tax collection and there have been instances of people getting letters stating that they need to file a Foreign LLC registration in CA. But I wouldn't let that hinder you from getting those real estate investments in Texas properly secured in a TX LLC.
Hi Ebony, you are correct. That is because of interstate commerce (vs. intrastate commerce). We'll make sure to make mention of that in updated videos and on our website. Thank you for your comment.
Hello @LLC University, I have rental property in the state of Florida but I reside in a different state. I am in the process of creating an LLC. My question is, once I create the Florida LLC, am I required by law to also create one LLC in the state in which I reside? Or is that not necessary?
State law doesn't really care about the internet... to put it bluntly. And technically, you are still operating/managing the business from somewhere. For most business owners in the US, that'll be the state where they reside and run the business from. Hope that helps.
@@llcuniversity my goal is to live anywhere in the world and run my internet business. SoOOOo I'm guessing for simplicity just put it in the city I'm original from/resident to? What happens if you employee people living in different states? Do you need to set up a LLC in those states too even if its 1 person?
@@MrVuittonDon - That is what most people do. The state where there is likely to be the most activity from and nexus/"connection" is likely where the LLC will primarily doing business. Having employees is deemed doing business, so a foreign LLC qualification will be needed for each state where you have employees. Hope that helps.
What if a corporate resolution is formed between two LLC's one conducting business in the home state and the other acted as owner of the first. The second not conducting any type of business. Can you then take the unused LLC to a another state where the state taxes are low? Am I required to report that second llc that's not being used for banking purposes to the irs?
You wouldn't "take the LLC" to another state, but rather, it would be formed there to begin with. There also wouldn't be a resolution. The Parent LLC would simply be a member of the Child LLC. Your question is a bit complicated (and worded a little funny), so we'll have to pass the buck on this one and ask that you speak with a local accountant and/or CPA in order to cross your t's and dot your i's. Apologies I could not be more specific.
I'm about to start a real estate company, working in multiple states, some of the work may be in my home state. Since i will be doing business in multiple states, should I still open an llc in my home state of Louisiana?
Yes, in this case, I'd form the LLC in the home state. If a state then requires a foreign registration, you can worry about that later as it arises. You should be fine with just a domestic LA LLC though. Hope that helps.
If your home state is California, then I'd form the LLC there. Let me know if that answers your question, as I did not fully understand your comment. Thanks.
LLC University thank you for your reply. My question was because California state taxes are so high, would starting the LLC here truly be most beneficial? from your video I do understand that I would be paying double if I were to be forming an LLC outside of my home state however I assume that with such high fees and taxes here, Nevada wouldn't be such a bad idea.
I see what you mean, however, towards the end of the video, I mention "taxes are paid where the money is made". Meaning, if you form an LLC in Nevada, not only will you be required to register your Nevada LLC as a Foreign LLC in California (therefore still having to pay the $800 Annual Franchise Tax), you'll also be paying California taxes (income taxes, sales tax, etc.), since that is where you are deriving your income... regardless of where your LLC was formed. Hope that helps!
Hello, love the video. What about if you are a foreigner (non resident) looking to start an LLC for investing in US stocks where does it make most sence to form an LLC? In the same state as the broker or in a state with more benefits, I'd love if you could suggest a state.
Hey Igor, thanks for the kind words! Apologies for the confusion, as this video was made with US citizens/residents in mind. I need to make a Part 2 ;) For foreigners, you really have all the options available. Here's what common... if you're actually doing business in one of the US states, you can form the LLC there. If you're not doing business in a state, Wyoming and Delaware are common choices for foreigners. Hope that helps!
Thanks for answering it certainly helps me ;) maybe 2 part not such a bad idea :)I just have another question: is trading stocks and bonds for LLC considered doing business in New York state if my broker is located there or it doesn't matter for trading securities since there is a capital gain tax anyway?
Hi Igor, yes, part 2 is on the list :) Apologies that I cannot be specific here, but we don't provide answers as to what it means to be "doing business" in various states. Reason being is every state is different and the truth is buried in the statutes, and can often be ambiguous. I recommend speaking with a few attorneys to get their take on that. Same thing regarding taxes, we recommend you speak with a few accountants, as this also varies widely. Apologies again I couldn't be more helpful on your followup question. Having said that, here is some info on New York's definition: www.dos.ny.gov/cnsl/do_bus.html
I'm starting a few business. I plan on having Legal name and everything else as DBA. Most of the businesses will be. Web based for the most part ie products, social media consulting, digital software, affiliates sales, vacation/travel. are the first five companies. I only need to be concerned with the legal name as far as filing and does the state matter in this case. I am a partner in a physical business that is unrelated to any of the new businesses I am starting
Hi Araje, I don't fully understand your last question/statement, but whether or not you want just 1 LLC, 1 LLC and multiple DBAs, or multiple LLCs is up to you. You can do business (with all of those activities) under "one roof", aka 1 LLC. You certainly can, but it's not that fun, filing 5+ DBAs. It can be a little tedious. Again though, you can mix things up any way you'd like.
Yes, you certainly can. You can file an Articles of Dissolution is Utah. It's free. Here's the form: corporations.utah.gov/wp-content/uploads/2021/09/llcdiss.pdf
I may have missed it somewhere in your videos, but what if I create a LLC in California, but then move to a different state? Can I switch the LLC over so I don't have to pay Californians ridiculous fees, and just pay the new states? -thanks
Hi Colby, there's generally 3 ways to "move" an LLC. Dissolve LLC 1 and form LLC 2. Register LLC 1 as a Foreign LLC in the new state. Or "redomesticate (if allowed) from state 1 to state 2. If you're permanently looking to move out of California and will setup residency in another state, dissolving the LLC in California and setting up a new LLC in your new state (or redomesticating) will be better. If you filed a Foreign LLC registration, you'd still owe CA annual franchise tax.
Hello For subsidiary/ child company formation is it usually required that the parent company name and members / owners name both be listed to create llc ?
No, on the subsidiary LLC filing (which is just a regular LLC filing), if the Members or Managers are required to be listed, you can just list the name of the parent LLC (not the Members of the parent LLC).
That doesn't need to be on the state filing. That would be in your Operating Agreement and depend on how the LLC is managed. Meaning, you can have your subsidiary LLC owned by your holding company LLC, but you can make the subsidiary LLC Manager-managed, and you can be the Manager. In this context, you'd sign and bind the subsidiary LLC. If the subsidiary LLC is Member-managed, it will be managed by the holding company, which is managed by you. So it would be you signing, but on behalf of the holding company. Let's look at signature blocks. That'll make it easier. And let's pretend the holding company is called ABC Holdings LLC and its subsidiary is called XYZ Investments LLC. Signature block for the subsidiary company if it's Manager-managed, and Davion is Manager: _______________________________ (signature) XYZ Investments LLC By: Davion Savant, its Manager Signature block for the subsidiary company if it's Member-managed by holding company: _______________________________ (signature) XYZ Investments LLC By: ABC Holdings, LLC, it's Managing Member By: Davion Savant, its Member
I have a transient food concession business and work outdoor events, so I work half the year in NJ and half the year in Fla.( I already have transient food vendor licences in both states) so if I wanted to form an LLC I would need to do so in both states? I am considered a resident of Fla (because of drivers licence, auto registration and bank account), but still file a NJ tax return for the six months I do events there. Everyone tells me I should form an LLC because I own real estate in both states and the liability potential of the food business but what you are saying sounds like a real pain.
+RoccosPlace1 - Hey Rocco, you'll want to form an LLC in Florida (since that is your home state) and then register your FL LLC in NJ as a "foreign LLC", allowing your FL LLC to do business in Jersey. FL LLC is $125 to form, then $140 annual fee. NJ foreign LLC is $125 to form, then $50 annual fee. Curious, what part about what I said is a pain?
what if you form an llc in your home state but you live on state borders where you end up working in both states often, what should be done then? would i have to make an llc in that other state as well as your home state?
If you're LLC is doing business in multiple states, it's supposed to be registered as a foreign LLC in the state where it wasn't originally formed. Please see here: www.llcuniversity.com/what-is-a-foreign-llc/
You keep saying your "home state" aka "where you reside" but what if my residency is another state than where I do business? I think it's more beneficial for me to register in the states I do business, NOT where I am a resident...
You're right. Apologies about the confusion. It would have been much clear had we said this: an LLC should be formed in the state where it is doing business. We didn't realize it at the time (the potential confusion) since most people do business in the state where they reside... however, that's not the case 100% of the time. Hope that helps.
@@llcuniversity very much so! Your one quote really helped--about paying taxes whenever the business is conducted and then knowing it's easier to register in the state where the business is conducted :) thank you!
What if I live in NYC but I want to purchase a house in nevada which I WONT use for investment purposes, making it easier to use an address in nevada, and my business is completely digital and not attached to one geographic region (dropshipping or youtube perhaps). Would that be a potential situation to set up a foreign state llc, and would this work ONLY if I convince the government that that house in nevada is my primary residence and the nyc house is only secondary (even if I spend like 85% of the time in nyc)?
Hi Andrew are you thinking of forming a Nevada LLC or a New York LLC for the house in Nevada? Will this LLC also be used for dropshipping or youtube business? "Doing business" laws come into effect by where you are running things from. The states don't loosen their grip just because of the internet.
@@llcuniversity hi! I was thinking of doing a nevada llc, mainly for dropshipping (but considering other future digital income sources too) Thanks sm for the reply, if I'm honest, I was under the impression that internet run businesses *kinda* meant you had autonomy with where the business is based in
If it were only that easy ;) New York, and every state, has laws regarding "doing business". So if you form an LLC in Nevada, you'll need to register your Nevada LLC as a foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in New York. You'll have to maintain two LLC filings. And you'll pay taxes in New York no matter where you form the LLC. To get the benefits of Nevada, you'd need to actually reside in Nevada. Hope that helps :)
If you have a physical presence like employees, real estate, shop, store, etc., then you should form an LLC in that state. If not, then you can pick any state you'd like. Common states for foreigners are Delaware and Wyoming, but you can pick any state. It's also a good to speak to an accountant ahead of time regarding any tax consequences. Keep in mind that you'll also likely need to fly to the US to open an LLC bank account after your LLC is approved.
What if your primary concern isn't saving $1,000 in filing fees but having your business registered in the state that has charging order protection. Can you please speak to that
Hey, great question. Charging order protection is a complex matter. Meaning, really difficult to speak to in a comment, let alone a video. If you form an LLC in DE, then register it is a foreign LLC in your home state, if you're involved in a case in your home state, the court could completely disregard DE law and try the case under the laws of the state where the claim is made. Or not. It depends. You could form a DE company that owns the company in your home state. You could also dig into the creditors rights (foreclosure, assignees, remedies, etc.) in your state and/or speak with a lawyer. It's not so cut and dry as some youtube videos (and "promoters") may lead you to believe. Not saying it's incorrect. Not at all. It's just really complex. And to cover it from a straight educational standpoint (like no product to sell you afterward) would require complex legal research in all 50 states in addition to use-case scenarios for a handful of different situations. In summary, you gotta really dig into it. Maybe get some legal advice. We want to cover something like this, but it's a beast of an undertaking. Hope that helps and thanks for your understanding :)
What about truck drivers? I can use one of my grandfathers suite numbers he uses for his business in texas, for my business. Then form an llc and register the business etc. But I live in Tennessee. But as a truck driver can't I use that address in texas?
I'm not 100% sure about the logistics business. Do you have a license to operate which was granted in TN? If not, then you should be okay with a Texas LLC. Hope that helps.
Hey Raja, you pick any state you'd like. Biggest things to think of are opening a bank account for your LLC and using a good Registered Agent. I'd start here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Hope that helps!
Hey Ramiz, if you are going to transact business physically in the US, you'd want to pick that state. If not, you can pick any state you'd like. We have info for non-US residents on EIN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/) and banking (www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/). The banking part may influence your state choice. Hope that helps.
What are the benefits of doing a out of state LLC if their are any? And wouldnt you say some benefit from it? Like if they had a property in many states they can declare the other state at those states despite they live abroad most of the year or online? What other things about LLC are their that most do not know about? Also how do the rich benefit from a LLC when doing business in a no income taxes country? Maybe the LLC is a false advertising in how you present it which is improper in what the states does.
Hi Trench, one benefit of an out of state LLC could be to use that LLC as a holding company. Meaning, it owns other LLCs. I wouldn't say the rich benefit from using an LLC when doing business in a no income country. That doesn't apply to US citizens and residents, which are taxed under a worldwide income regime.
@@llcuniversity regime LOL Any thoughts on Puero Rico? And having a LLC from another country which some companies advise a person to register their property in a europe country to save on capital gains? Also does LLC have to indicate who the owner is or can it indicate a president with only with 1% of shares? When looking on LLC to search owners many are like a spiderweb of LLC owning another and have a office address with 100 other llc in the same room with owner name being an llc again and sometimes out of state. It seems fishy to me when trying to find the owner as f they know something when doing these mazes of llc.
@@trench01 - Yea lol, "regime", what a word! I'm not up on all the rules re: PR. As far as public records go, there's like 15-20 states where Members are not listed publicly. So it's not required in many states. In terms of taxes and out-of-country entities, that's a vastly complex subject matter best saved for conversations with accountants. Hope that helps and thanks for your understanding.
We are planning on becoming full times RVers and start a business that does mobile RV repair, which the work will be done in whatever state we happen to be in at the time. We have a home state to “winter” in and that would be our place that we would set up our LLC. I don’t know if it’s ok or whatever about being a mobile business traveling state to state.
Hi Karandeep, it can depend on a multitude of factors. However, something like this is best discussed with a tax attorney. You may want to look at how a decision like this could impact sales tax. Hope that helps.
hi, I found this video very informative. I have a question about foreigners. What would be the best strutucture for doing real estate business for offshore companies(real foreign entity)?
Hey there, glad it was helpful. Unfortunately, there isn't one answer that describes the best entity. Foreigners can form US companies owned by foreign companies (or owned individually) or foreigners can operate foreign corporations in the US. Many choose to setup a separate US entity for better asset protection. But again, it varies widely. We recommend speaking with a tax attorney. Hope that helps.
Hi Mike, if actual business activities are being carried out at that physical location, then the LLC will be transacting business there. How were you going to go about "creating" the address? And what is your overall vision/strategy? What type of business will this be?
What about an LLC for an online business that sources all of its income outside of the US? Both in terms of who pays the LLC and where the customers of the clients of the LLC are sourced. (It's an advertisement company.) What would be your suggestion for an optimal LLC structure in terms of taxes and asset protection?
Something like this needs to be discussed with a tax professional who works with foreigners and understands tax treaties (if applicable). If the LLC is foreign-owned (by foreign individual or foreign corporation) and single-member, you'll still need to report to the IRS via Form 5472 and an 1120. You likely won't have ECI or FDAP, but again, you'll need to speak with an accountant. Thanks for your understanding.
Hey Derrick, I'd form the LLC where the assets are located or where you're running the business from. If you can provide some more details, that would also be helpful. Thanks!
Which state can depend on many factors. If you're actually "doing business" in a particular state (office, employees, etc), you may want to look at that state. If you're not going to be doing business anywhere, you could pick any state... however, if you want to open a US bank account, that could influence your decision. Please see here regarding banking: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. How long it takes for an LLC to be approved, depends on the state in which you form an LLC. It can be as fast as 1-2 days... or it can take a few weeks. Hope that helps.
Yes, the LLC will have it's own name. For example, it could be "John's Restaurant LLC" or "Tasty Delicious LLC"... meaning it doesn't have to have your name in it, but it can if you want. Check our our Learning Center (www.llcuniversity.com/learning-center/) and click on "1. LLC Name". I explain it even further there.
a very useful explanation. I learned more details from your movies. thanks to you and for your effort and I need to help me I incorporated an LLC in Delaware and license a new institute now in Washington DC I think that I have problems now according to your movies
i am looking to registered llc for the amazon business. can you suggest me the best state where had no income tax or sales tax or any other type of tax and not any yearly charges. some people said texas is the best because no yearly renewal charges and free shipping in the state on the other hand some people said wyoming or nevada is the best. can you help me out.
Hi Muhammad, we can't answer questions like this since there are many factors. We recommend speaking with an accountant regarding sales tax. Income tax will be paid in the state where you reside, regardless of where the LLC is formed.
If you're transacting business in Florida, that is where the LLC should be formed/registered. It's more about where you are operating from, not where your customers/clients are location. You can work with people all over the country/world. Hope that helps.
LLC University that helps but it made me think how my type of work, blogging, with potential to get clients everywhere is not such a good idea, considering the tax implications everywhere. And it’s not like blogging is lucrative. It made me think perhaps that’s why companies outsource this type of work outside the country as doing it in the states is not worth it unless you’re offering a much higher fee to pay off taxes.
Taxes aren't paid like that. You file federal income taxes, based off your net income. And your state income tax will be paid in the state where you reside (not in all the state where you have clients/customers). Hope that helps.
What if you live and run your business out of an RV and your physical residence is mobile and traveling around the country while you conduct your business?
Hey Jeff, you'll still need to pick a state to make a "base" for the LLC. Most RV/digital nomad folks setup their LLC in the state where they claim residency, pay taxes, and have their driver's license.
what about a offshore holding company that holds my local LLC stock.to protect any assets I have from lawsuit.i would expect business liability insurance to cover lawsuit.
Hello. Please reply to me! Thanks for video ! If I have an ecommerce business and I do it all over the states and even ship products worldwide. So where should I open my LLC and pay taxes? (I temporary reside in New York but I'm not a US citizen)?
Hey Coco, I recommend setting up the LLC in the state where you work FROM. That's where you're doing business, according to the state. Although customers are everywhere, wherever you run/operate/manage the business from is where the LLC should be formed. Hope that helps :)
Thanks for the video. What if my home state doesn't pay state taxes like Texas? But if I form my llc in foreing state because Texas is banned from the company I want to do business with
@@llcuniversity Thank you. I want to do business with a company that doesnt accept Texas residents. If I create LLC in foreign state, will I have extra yearly expenses when I want to file taxes?
You'll still be a Texas resident though, regardless of where you form the LLC. Won't you still run into the same issue? Also, if you form an LLC out of state, but that LLC is doing business in Texas, you'll need to register the out-of-state LLC as a foreign LLC in Texas (www.llcuniversity.com/what-is-a-foreign-llc/). A foreign LLC registration in Texas is twice as expensive as a regular (Domestic) LLC filing in Texas.
Yes, it counts, since states don't care much about "online" businesses. Look at it from another angle... where are you regularly running your online business from? That's the state where your LLC is transacting business.
If you are a small company and make no money this video is for you. If you make bigger money research with people that knows better. I save millions every year using out of state llc and Inc. Do you research.
Hey Tony, thanks for your comment. The majority of our audience is getting started, but we do have more experienced viewers too. We could have also done a better job in this video explaining that. Hindsight is 20/20. If you care to share more about your setup, please do.
Hi Julie, yes, you can open an LLC in Michigan. If you start transacting business in multiple states, you're supposed to register your Michigan LLC as a "foreign LLC" in those states. We have more info here: www.llcuniversity.com/what-is-a-foreign-llc/. Hope that helps.
There isn't a simple answer, as it depends on multiple things. Having said that, if you don't have a physical presence or employees in the US, you can choose any state you'd like.
what if i created an LLC using incfile .com and i formed in nevada. i live in florida and i am going to sell my marketing services locally. so bad i read this late. this friday i have to pay the File Initial List/State Business License. I dont want to pay double licenses. Could be possible to stop or quit the nevada llc anyhow? so i can restart all the way my llc in florida?
Sorry to hear about that :( In this case, you'll want to shut down your Nevada LLC. This is known as dissolution and the form/filing is officially called "Articles of Dissolution for a Nevada Limited Liability Company". The NV state fee for dissolution is $100. You can form your Florida LLC at any time you'd like. You don't have to wait for the Nevada dissolution to be filed/approved first.
Hey Tony, I'd just form in Georgia then, since you'll actually be doing business there. If you formed the LLC in Tennessee first, then moved to Georgia, you'd have to register your TN LLC in GA, which is called a Foreign LLC registration/qualification (more info here: www.llcuniversity.com/what-is-a-foreign-llc/). That pretty much leads to twice the cost. Also, on the plus side, GA's annual fee is far cheaper than TN. $50 vs. $300. Hope that helps. Let me know if you need anything else.
Hey folks, make sure to check the site for most up-to-date information: www.llcuniversity.com/best-state-to-form-an-llc/. Or select your state and start forming your LLC with our free guides: www.llcuniversity.com/
LLC University hey, can you answer: how do I set up an LLC in US from England uk? I’m English. Starting business in real estate in US! So..
- how to set up? Where’s the best cities to set up? I’m looking for cities (to do real estate) in population between 500,000 to 1mil. Can you help me buddy?
LLC University.
Enjoyed your videos....I set up foreign qualification NY
chose Delaware for LLC many
reasons big one is Chancery Court
pro business state...Protecting/ Not piercing The Corporate Veil
Business operations in NY
Please Advise
jb
We'll soon be coming out with guides on setting up LLCs for non-US residents/citizens. The LLC formation process is nearly the same for non-residents and residents, however we also have articles that'll help. EIN without SSN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/_, Form 5472 (www.llcuniversity.com/irs/form-5472-foreign-owned-llc/), and opening an LLC bank account if you're a foreigner (www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/). Hope that helps!
Hi John, that setup works great as well. A Domestic LLC with a Foreign qualification in the state where you're doing business.
LLC University. Thank you again great info....REVERSING MY LLC
SETTING UP DOMESTIC LLC IN NY
WHEN THE COMPANY GROWS
WITH BIG BUCK INVESTORS
STOCK ETC...WILL DISSOLVE THE
DOMESTIC AND GO FOREIGN QUALIFICATION Delaware AGAIN
CHANCERY COURT PRO BUSINESS AS A CORPORATION
INC ETC...YOU!!! LLC UNIVERSITY
ARE BRILLIANT FOR DOING THESE VIDEOS....AGREE LLC
IN HOME STATE. CORPORATION
FOREIGN QUALIFICATION FOR STOCK- OPTION- PURPOSES ETC..JB
Sir you're the brutally honest LLC advisors in whole 50 states. Salute for the public service.
Thanks Tenzack! I saw your other comment about New York and Delaware. If you form an LLC in Delaware, but are doing business in New York, you'd have to register your Delaware LLC as a foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in New York. Hope that helps.
My understanding is that the advantage in forming an LCC in certain states is legal protection if you're operating as a single member LLC. I say that because I'm told that in those certain states, and in certain situations I guess, the law "shields" you from a judge ruling that a creditor can take from your business if you go through a personal bankruptcy or the other way around since you were in sole control of the business.
Which kind of irks me because the entire reason I want to form an LLC is to have a complete separation between myself and the business.
Hey Christopher, I'm not very familiar with personal bankruptcy details, but I do know that forming an LLC in a state which has charging order protection may be slightly better from an asset protection standpoint. Then again, it all needs to be taken with a grain of salt. For example, if you form an LLC out-of-state (for these protections), but are doing business in your home state, you'll need to register as a Foreign LLC there. Further, if you're tried in court, the judge gets to choose which states' laws apply. I'd recommend chatting with a few asset protection lawyers in your state for clarity. That should iron out some of the details. Check out Avvo: www.avvo.com/
Mechanicalhobby he doesn’t know a lot, only knows how to make videos, you right
Mechanicalhobby you are too smart :) be careful;)
Yes, this is correct. Those child LLCs are registered to do business but are owned by a parent LLC instead of being owned by you personally. We'll have videos on this set up soon. We just try not to overwhelm too many people as the majority of our viewers are just getting started. Thanks for your understanding.
smart bro, It is logic to form LLC in home state.
I absolutely love how you struggle to stifle your laughter concerning common sense mixups of Sole-Proprietorship/LLC/Corporate formality
Thanks Chayne lol! All these confusing sounding terms ;)
Your website has been such a huge support to me trying to learn and make best choices. Thank you so much.
So awesome to hear! You're very welcome Julie :)
Bad advice. You didn't mention or education your viewer on the privacy and asset protection benefits of forming companies in those states. Again... bad advice.
Hey Steve, sorry to let you down. You're right. The video could address many more points. We will certainly talk about your suggestions when we produce the updated version of this video. Thanks for taking the time to leave your thoughts.
Thank you so much for this video! I was about to setup mine in Delaware but then decided to do some research before jumping in with both feet.
Awesome! You're welcome Seven :)
Omg your just answered all my question. Thanks
You're very welcome!
First of all, thank you so much not only for this video but for all the information in your website! It’s been really helpful!!
I have a question I hope you can answer: I’m a US citizen but not a resident and I never lived as an adult in the US. I plan to form an LLC to run an e-commerce business and maybe also some income from affiliate marketing. My guess is that I can form the LLC in any state, is that right? Now what about if I’m thinking to move to the US in 1 or 2 years from now. Should I form it right now in the state I might live in? Thanks again! 🤜🤛
Hi Jorge, you're very welcome! Thank you for the kind words :) Yes, that is the most common route to go.... form the LLC in the state where you will soon be moving to. For most, that is the best long-term setup. Hope that helps.
Found this video while looking for clarity on whether I should form my online business in Indiana or..... Delaware, etc.
My mentor just did what you said NOT TO DO. And he gave me advice... For some reason it just did not sit well.
I'm already a skeptic and I always have to do my own research. The stars are in my favor because I reside in a business friendly state: Indiana.
I chose to be an online business because I love to be mobile and I have the travel bug pretty bad lol.
Thanks for the information. I am grateful for you!
Oh... And I SUBSCRIBED 😁😁😁
Hey Brittany, awesome comment! Glad to hear :) So cool how things work out like that, isn't it! And yea, online businesses have a ton of flexibility!
What if im a foreigner and want to form an llc in delaware and live outside the us ??
Then you can pick any state, including Delaware. You don't have to live in the US to form an LLC in the US. Apologies for the confusion. We're going to update the video title to provide more clarity to non-US citizens and non-US residents.
Thank you for this information. If I am running an online business and I’m a student attending college outside of my home state where would you suggest forming the LLC? I do plan on operating during the school year (in NC) and during breaks at home in FL.
In this case, I'd set up my LLC in Florida. Hope that helps :)
Hey can you create a parent llc in your home state.. But create a child llc or a completely different llc i guess with a different ein number... at another where you'll make your money with that entity at that state? Please answer if you can as either both or only one of the scenarios.. And why or why not.. Please
That is quite a complex question to unpack and there's a lot of nuance and details that would go into that. It would be better address to an attorney and/or a tax attorney. Just too much to type out here in a comment. Thanks for your understanding. Short answer is yes. Pros and cons... to complicated to get into.
this is super super helpful i find no information regarding this matter nowhere else really. all the agents either donno about what they are talking about or trying to get you to work with them and pay them.
Hey Ting, I hear you. It's a sad truth sometimes :( But I'm very happy to hear this video was helpful!
Many thanks for this video, cleared up a lot. Question: Forming an LLC in cali, which will be a subsidiary of a corporation in japan. Do you suggest having the corporation being one of the LLC members? and if so why? What are the advantages and disadvantages? thanks in advance.
You're very welcome. If the CA LLC will be a subsidiary of the Japan Corporation, then the Corporation would need to be an LLC Member. That's how the Corporation would own the LLC. Hope that helps.
@@llcuniversity makes sense. thank you
Hey. I am going to have an online business so would I still have to pay two fees? I would like to use Delaware or Wyoming or Kentucky and I live I Ohio (one of the worst stars to get a LLC from) like you said you pay taxes where the money is made and my money would be made across the nation. So two fees or only one?
Hi Bentton, even if you have an internet-based business, you cannot get around your state’s tax obligations simply by forming your LLC out-of-state.
Why do you think Ohio is a bad state to form an LLC?
Thanks a lot man for this video it was really helpful and rich in knowledge. One question though buddy, I am starting an online e-commerce business and I don't live in USA, I live in Pakistan.
If I don't live in the US and form an LLC in Wyoming, will that be uselful? I would've gone with Nevada but since it has fraudulent activity I ain't forming my LLC there, so it is useful to form an LLC in Wyoming if I don't reside in the US?
Thanks man, subscribed. :)
You're very welcome! We recommend to a lot of our non-US resident readers to "work backwards" from the bank account, since that's where people get stuck. We've put together an article about it here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Take a read through and let me know if you have any questions (please leave them in the comments section of the page) and I'll get back to you there. Thanks.
Question, if my husband and I reside in California and are looking into buying residential real estate properties in Texas to use as rental properties, do we need a Texas LLC and a CA LLC? With no way around having to have both?
Hi Cinthia, you'll be "transacting business" in both states. The most common setups are an LLC formed in California (and registered as a foreign LLC in Texas), an LLC formed in Texas (and registered as a foreign LLC in California), & a California LLC that owns a Texas LLC. California is very strict when it comes to the definition of doing business. You can find more details here: www.llcuniversity.com/california-llc/doing-business-in-california/. Here is info on foreign LLC registrations: www.llcuniversity.com/what-is-a-foreign-llc/. Hope that helps.
I am unsure whether I am required to appoint a registered agent if I am forming an LLC in my own state of residence, Rhode Island.
Could you please clarify whether it is mandatory to appoint a registered agent when forming an LLC in Rhode Island, even if I reside in the state? I would greatly appreciate any insight or guidance you can provide on this matter.
Thank you for your time and expertise. I look forward to hearing from you.
Yes, a Registered Agent is required for a Rhode Island LLC. However, the Registered Agent doesn't have to be a company (aka a Commercial Registered Agent). It can be yourself or someone you know. We have more details here: www.llcuniversity.com/can-i-be-my-own-registered-agent-in-rhode-island/
You are overlooking the fact that you form a Wyoming LLC to be a holding LLC and form a local LLC in your home state. You do not register the Wyoming LLC in your home state, that would destroy your protection. The Wyoming LLC will own the local LLC, you register BOTH LLCs as disregarded entities. This gives you total protection on BOTH LLCs while the tax responsibility flows through to you as if the LLCs didn't exist.
Excellent comment. We originally made this video as an intro for beginners. Many of which don't want to deal with extra fees. Apologies we didn't make that clear. Using an LLC as a holding company to own other LLCs is a solid strategy.
Thank you for the video. It is very informative. I do have a question though. I live in Colorado and looking to buy rental properties in Texas. The money will be made in Texas but some administrative tasks will be performed in Colorado. Would the same advice apply? I should forming the llc in Colorado instead of Texas? Thanks
Hi Linh, you're welcome. It's a bit flipped around with real estate investing... since the LLC will be doing business where it's collecting rents; in this case, Texas, so you can form an LLC(s) in Texas.
@@llcuniversity do I still need to file a foreign entity in Colorado about the llc in Texas?
@@LinhNguyen-ev8wq Hi Linh, you shouldn't need to foreign qualify the Texas LLC in Colorado.
Dear Matt Horwitz,
I hope this message finds you well. I have been researching the process of forming an LLC and came across your recommendation to form it in my own home state. However, I wanted to discuss a specific concern I have regarding LLC formation in Rhode Island.
In Rhode Island, the annual cost of maintaining an LLC is quite high, as there is a requirement to pay $400 in taxes regardless of whether the company is actively conducting business or generating profits. This can be a significant financial burden, especially for smaller businesses or startups.
Considering this, I have been contemplating the possibility of forming an LLC in a different state where the costs might be more affordable. While I understand that there are benefits to forming an LLC in my home state, such as familiarity with local laws and resources, the financial implications are making me reconsider.
I would greatly appreciate your expert opinion on this matter. Given the expensive nature of LLC formation in Rhode Island, do you still believe it is necessary or advisable for me to form an LLC in my own state? Considering the cost-effectiveness of forming an LLC in a foreign state where I do not reside, would it be a viable option for me?
Thank you for your time and insight. I look forward to hearing your professional advice on this matter.
Best regards
If you form an LLC out of state you're supposed to then register it as a "foreign LLC" where you're transacting business. In that case, you'd pay even more. However, these rules are not strictly enforced, so many can get away with forming an LLC out of state and not registering it in their home state. If you were to explore that route, check out Ohio LLCs. Very affordable and easy to setup.
Hello, So I am wanting to start an LLC for a new online only business, although I am planning on moving from Idaho to Florida either this winter or start of next year. In this Scenario what would you recommend?
Hi JetSetter, we typically recommend forming the LLC in the state you are moving to. Hope that helps.
What happens if you're from another country? Then it's okay to pick whichever state you want right?
Hi Gabo, if you have physical presence, like employees or office where people are working for your business, then you'll want to form the LLC in that state, since that's where you're transacting business. If not, as a non-US resident, you can choose any state you'd like. The LLC formation process will be regular (like everyone else) and you can follow instructions on our site: www.llcuniversity.com/50-state-llc-guides/. However, how to get an EIN and a bank account are different. Here's how to get an EIN (after the LLC is approved): www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/. Here's how to open a bank account: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. And if your LLC has 1 owner, you need to file Form 5472 each year: www.llcuniversity.com/irs/form-5472-foreign-owned-llc/. Hope that helps.
Babyboy not capping
How about the article publication fees? I live in New York and I just formed an LLC here. But I just found out it requires to publish article from three news papers and the fee is very high... Could you give some advices about that? Should I close it and form another foreign LLC or form a DBA instead?
Hi Karen, please watch this entire video to fully understand. In short, I don't think it's best. If you form out-of-state, you'll still be required to register your out-of-state LLC as a Foreign LLC in NY. Now you'll have 2 LLCs, additional costs, and you'll still need to meet the publication requirements. I recommend following our guide here (www.llcuniversity.com/new-york-llc/publication-requirements-part-2/) and publishing your ads in the county where your LLC is located. It's an unfortunate cost of doing business in NY. Also, take a look in the sidebar after clicking that link. You'll find instructions for your Operating Agreement and your Federal Tax ID Number (EIN). Hope that helps. Let me know if you need anything else.
Why would you need to register in your home state, if you do business online? How would your state ever know when the registered agent is the actual place of business location as registered with the llc in the states you're saying not to?
Hi Tawan, unfortunately, states don't care about the internet. If you're running the business from home, then you are doing business in the state where your home is located. These are known as "doing business" or "transacting business" laws. The location of the Registered Agent has zero impact on where an entity is doing business. Hope that helps.
i understand what you are saying, but even with the high payment of 800$ in california? is it still a waste of time setting up out of state?
Hi Chris, if you are doing business in CA, you'll have to register your out-of-state LLC in CA anyway (and pay the $800 franchise tax), so it's actually more expensive since you'd need to maintain 2 LLC filings... and you'll still have to meet all of CA compliance requirements. Hope that helps.
Hello I have an online business and my home is in California but I travel full time. I wanted to form my Llc in Wyoming with a virtual office service and registered agent in Wyoming. Do I still have to form my Llc in California?
Hey Bells, California is very strict when it comes to doing business. Strict in terms of both corporate law and tax law. We recommend forming the LLC in California if that's your state of residence. We have some helpful data points about "doing business" in California here: www.llcuniversity.com/california-llc/doing-business-in-california/. Hope that helps!
Hi Matt, it is great knowledge that you pointed out. I have two questions. First, I just registered a video production LLC in Wisconsin. Do I need to pay tax in other states if I am going there to recorder the video? I will do the post production at my home state. Do I need to register foreign LLCs in those state I need to do recording? Second question, if I have projects work with other companies in another state doing post production. It could be working either at home state or the other state. Are they going to make differences in file tax? Thank you very much for your time.
Likely no, you will not need to file taxes or take care of foreign LLC registrations because of shooting and post-production activities in other states. You should be fine with just a domestic Wisconsin LLC and filing with the Wisconsin Department of Revenue. Having said that, if you are earning "substantial" income or are partaking in "substantial" business activities in these others states, you may need to file an informational tax return in these states, but apportion your income to Wisconsin. Meaning, you tell these states that you're paying taxes on this income in Wisconsin. But again, you'll need to discuss this with an accountant or two to go over the nuances. Try using our "knights of the roundtable" strategy for this one: www.llcuniversity.com/how-to-find-an-accountant-for-your-llc/
Thank you very much for your information. Really helpful.
You're very welcome! Best wishes.
what about dual residence? should the LLC be where you stay the most? it's an online business so anywhere theirs internet we can work.?
It's really about the state laws of "transacting business". Your LLC needs to be formed and/or registered in the state(s) where it is transacting business. Even though the business is online, the state's don't care. You are operating and running that business from somewhere. The state where most of those activities takes place is most likely where your LLC is transacting business. If your LLC is transacting business in multiple states, it'll be originally formed in one state and then it should be registered as a Foreign LLC in the other states where it's also transacting business.
In the case of Non resident person what would be the best state to setup the business LLC ? is it ideal to incorporate in Delaware ? And if do the goods imports from other country can I import any part(port) of the USA please clarify
Hi Shanmuga, we're not familiar with import/export rules, so not sure. If you form your LLC in one state but are doing a lot of import in another state, their is a chance you may need to register your LLC as a Foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in the other state. Will you have an office or employees in the U.S.? Will you be importing goods a lot into a particular state? Will you be doing business in a particular state?
so if I am resident in Nevada but has rental property in California. where should I registered? NV has no state income tax so I am not facing double tax right? thanks!
Hey CC, where an LLC should be formed (and if necessary, registered as a foreign LLC), comes down to where the LLC is doing business. You'll be doing business in CA and possibly NV, too. Or maybe just CA... we cannot address these issues, as there are laws for each state and there are details to them. You may just be okay with forming an LLC in CA. You may need to form an LLC in NV and register it as a foreign LLC in CA. Or you could form an LLC in CA and register it as a foreign LLC in NV. I do that you'll need to pay the $800 annual franchise tax and file Form 568 in CA. We have more info on doing business in CA here: www.llcuniversity.com/california-llc/doing-business-in-california/. Here is info on what a foreign LLC is: www.llcuniversity.com/what-is-a-foreign-llc/
Hey love the video very in sighting, and helpful. I have a question for you tho: does LLC's work for just investments in the US only? Also I'm thinking about creating an LLC to be used for a couple investment propertied in the Caribbean will the LLC work for those type of overseas investments?Can I use my credit score an finances to invest in the LLC? will this put me at a dis advantage where people can now sue me personally because the investment came from my personal assets?Thanks Again
You're very welcome :) If you contribute money to the LLC, that does not eliminate your personal liability protection. You'll need to check with the jurisdictions in the Caribbean and elsewhere re: your specific situation, but the short answer is yes, there are typically to restrictions like that. Hope that helps!
Thanks for the replay appreciate it.
You're welcome!
My business is virtual and this gives me the freedom to move around. I often live in a state for a year or two and then move. What is the best way to form an llc in my situation?
I hear you. So many businesses are these days. But you still have state laws (laws about transacting business) and taxes. It may be a good idea to speak with a tax attorney to determine where your LLC will primarily be transacting business and set your LLC up there.
Thanks so much for this, quick question ( I hope) what if I'm a commissioned insurance agent and don't sell in the state where I reside? Meaning my sales come from TX, CT and PA and the commissions come from companies located in different states than that? Thanks in advance.
It's more so where you are working OUT OF, now where you're customers/clients are located. Many business have clients in multiple states. Does that help?
this is such gr8 info presently so clearly! you have a teachers heart; thanks for sharing the knowledge!!
Thanks so much! You're very welcome :)
Hello, please advise what address I should use when creating a new LLC in NY. We don't have yet a physical space. We are planning first to create the LLC and then find a place.
We have all the NY address information spelled out more easily on our website. Check out the NY LLC Course and just follow the "detailed lessons" in order: www.llcuniversity.com/new-york-llc/. Hope that helps :)
what if my business is in VA or MD and I do business in DC? DC is not a state. Which state VA or MD is better to form an LLC in? Or are they the same?
Hi Norinn, you can form an LLC in Washington D.C. by registering with the Department of Consumer and Regulatory Affairs.
1. Search your desired LLC name:
corp.dcra.dc.gov/Account.aspx/LogOn?ReturnUrl=%2f
(you'll have to create a free account)
2. Select a Registered Agent. See here for your options: www.llcuniversity.com/llc-Registered-Agent/
3. File the Articles of Organization and pay the $220 filing fee. This can be filed online or by mail. The link from #1 will take you to the online filing.
4. Complete your LLC's Operating Agreement:
www.llcuniversity.com/operating-agreement
5. Get your EIN from the IRS:
www.llcuniversity.com/federal-tax-id-number-ein
We don't have our step-by-step guide on D.C. live yet (but we will soon). In the meantime, if you have any questions, contact the Washington D.C. Corporations Division at 202-442-4400.
Hope that helps!
-Matt Horwitz
I live in NY right now and my LLC will invest in a company in NY. But I'm planning to move to Texas in a few months. Where should I form my LLC?
If you are going to be changing residency to Texas, you can form your LLC there if that's where you'll be working and operating the business from.
I currently reside in California, want to start an online business selling on amazon. “Where the money is made” is potentiallly all over the US. Would I have to apply for a foreign LLC to all the states from which my customers buy my products?
Hi Attack, no you won't have to register in all the states where you make sales. Just California to start, since you are doing business there. Please see here: www.llcuniversity.com/california-llc/doing-business-in-california/
Thanks for the information. I wish I had seen this video before I set up my original LLC in Nevada. I have two, the other being in my home state of Washington but I do want to keep my two businesses seperate as I sell Hemp based products from one and do regular eCOM and other gig consulting, ride share etc etc from the other. The question is does it make sense to eat the set up fees for the Nevada LLC and pay for a second LLC in Washington or now that I have set them up should I just focus on making $$$ and worry about taxes later?
Hey Ron, interesting question, and I'm not able to tell you specifically, however, if I were in that position, I'd focus on the sales and revenue, and then clean things up in a bit as needed :)
Thanks, that was my initial thought as well. I need to make money for taxes to be an issue right?
I'd follow that thinking :)
hey awesome videos!
What if im a freelance designer that has a home base (parents house) in one state but travel around to other states since I work from my laptop. Do I have to pay taxes for those states too since i was doing work while i was there? Also, when it comes to deductions, I read that you can claim part of your home/appt as your office for deductions. Since im not always working from my office does this still count?
thanks!
Hey Conrad, thanks man! Tax questions have a ton of variation and nuance to them, so things are not black and white. Having said that, you most likely will not need to pay income taxes in the states you travel to as your accountant will most likely feel you don't have nexus there. And yes, for deductions, you can claim a part of your home/rental expense. Again, this is gray, but most people just make it look they are working from one location. Who needs to know you travel around all the time? Hope that helps a bit. I'd phone a few accountants. They'll each spend 5-10 minutes with you at no charge. Some recommendations here: www.llcuniversity.com/how-to-find-an-accountant-for-your-llc/
You’re the best! THANKS! 😊
You're welcome Vivian!
Dude Wyoming LLC is one of the only states that has Charging Order Protection. Which means it's the flip side. What if you get sued personally? Then they can take your LLC from you, but not in Wyoming. Protection goes both ways. I think you should speak to an attorney before giving advise about certain things.
Hi Ant, thanks for your comments. Many states have charging order protection, but you're right, Wyoming is strong. We'll have guides on setting up WY parent LLC owning LLC in state where doing business soon. This video was also a part of our intro series. Thanks for your feedback.
So if I want to open my company Vintacex LLC in Wyoming but in reside in Houston, I would be paying more money in the long run? what if I purchase a office space in Wyoming but I still live in Houston and I constantly report the money is being made from my office space . would that be a win for me or still a hassle in the long run?
Hi Jah', what is your goal? Just saying the money is being made in one location, but it's not actually being made there may be breaking multiple laws. If your LLC is actually "transacting business" in Texas, a Wyoming LLC would need to be registered as a foreign LLC in Texas. There may be some other ways to structure things though.
thank you for the content my friend but what about foreign and non resident what is the best state for them?!!
You're welcome. We don't have a specific video on this yet, but it may be a good idea to "work backwards" regarding the bank account. We have info on foreigners opening US LLC bank accounts here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Once you choose the state, you can also get an EIN for your LLC without an EIN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/). And you'll also want to read about the Form 5472 + 1120 requirements for Single-Member LLCs owned by foreigners: www.llcuniversity.com/irs/form-5472-foreign-owned-llc/. Hope that helps!
So if my real estate investment property is in TX and I live in CA then will I still be required to register that out-of-state (TX) LLC as a Foreign LLC in my home state (CA)?
Hi Julie, you should be okay with just registering your LLC where the property is located in Texas. Hope that helps.
You're the BOMB for answering my question! Hours of reading from the SOS website confirms this - I think. Thanks!!
Haha, you got it! ;) Now, having said all that, CA is a bit "strict" when it comes to tax collection and there have been instances of people getting letters stating that they need to file a Foreign LLC registration in CA. But I wouldn't let that hinder you from getting those real estate investments in Texas properly secured in a TX LLC.
There are specific types of businesses that doesn't have to file a foreign llc... Trucking is one of those in Texas.
Hi Ebony, you are correct. That is because of interstate commerce (vs. intrastate commerce). We'll make sure to make mention of that in updated videos and on our website. Thank you for your comment.
Hello @LLC University,
I have rental property in the state of Florida but I reside in a different state. I am in the process of creating an LLC. My question is, once I create the Florida LLC, am I required by law to also create one LLC in the state in which I reside? Or is that not necessary?
Hey SidSid, typically no, unless you reside in California, which has very strict rules regarding "doing business". Hope that helps.
@LLC University,
No, my residing state is not California. Thank you!
You're welcome :)
What if your operating your business anywhere? Example: ECOMMERCE / Internet Businesses
State law doesn't really care about the internet... to put it bluntly. And technically, you are still operating/managing the business from somewhere. For most business owners in the US, that'll be the state where they reside and run the business from. Hope that helps.
@@llcuniversity my goal is to live anywhere in the world and run my internet business. SoOOOo I'm guessing for simplicity just put it in the city I'm original from/resident to?
What happens if you employee people living in different states? Do you need to set up a LLC in those states too even if its 1 person?
@@MrVuittonDon - That is what most people do. The state where there is likely to be the most activity from and nexus/"connection" is likely where the LLC will primarily doing business. Having employees is deemed doing business, so a foreign LLC qualification will be needed for each state where you have employees. Hope that helps.
What if a corporate resolution is formed between two LLC's one conducting business in the home state and the other acted as owner of the first. The second not conducting any type of business. Can you then take the unused LLC to a another state where the state taxes are low? Am I required to report that second llc that's not being used for banking purposes to the irs?
You wouldn't "take the LLC" to another state, but rather, it would be formed there to begin with. There also wouldn't be a resolution. The Parent LLC would simply be a member of the Child LLC. Your question is a bit complicated (and worded a little funny), so we'll have to pass the buck on this one and ask that you speak with a local accountant and/or CPA in order to cross your t's and dot your i's. Apologies I could not be more specific.
I'm about to start a real estate company, working in multiple states, some of the work may be in my home state. Since i will be doing business in multiple states, should I still open an llc in my home state of Louisiana?
Yes, in this case, I'd form the LLC in the home state. If a state then requires a foreign registration, you can worry about that later as it arises. You should be fine with just a domestic LA LLC though. Hope that helps.
But what if your home state is California? I didn't imagine that anything here tax wise could far outweigh anything anywhere else.
If your home state is California, then I'd form the LLC there. Let me know if that answers your question, as I did not fully understand your comment. Thanks.
LLC University thank you for your reply. My question was because California state taxes are so high, would starting the LLC here truly be most beneficial? from your video I do understand that I would be paying double if I were to be forming an LLC outside of my home state however I assume that with such high fees and taxes here, Nevada wouldn't be such a bad idea.
I see what you mean, however, towards the end of the video, I mention "taxes are paid where the money is made". Meaning, if you form an LLC in Nevada, not only will you be required to register your Nevada LLC as a Foreign LLC in California (therefore still having to pay the $800 Annual Franchise Tax), you'll also be paying California taxes (income taxes, sales tax, etc.), since that is where you are deriving your income... regardless of where your LLC was formed. Hope that helps!
Thanks so much. Glad I found your channel.
You're very welcome. We're glad too! ;-)
Hello, love the video. What about if you are a foreigner (non resident) looking to start an LLC for investing in US stocks where does it make most sence to form an LLC? In the same state as the broker or in a state with more benefits, I'd love if you could suggest a state.
Hey Igor, thanks for the kind words! Apologies for the confusion, as this video was made with US citizens/residents in mind. I need to make a Part 2 ;) For foreigners, you really have all the options available. Here's what common... if you're actually doing business in one of the US states, you can form the LLC there. If you're not doing business in a state, Wyoming and Delaware are common choices for foreigners. Hope that helps!
Thanks for answering it certainly helps me ;) maybe 2 part not such a bad idea :)I just have another question: is trading stocks and bonds for LLC considered doing business in New York state if my broker is located there or it doesn't matter for trading securities since there is a capital gain tax anyway?
Hi Igor, yes, part 2 is on the list :) Apologies that I cannot be specific here, but we don't provide answers as to what it means to be "doing business" in various states. Reason being is every state is different and the truth is buried in the statutes, and can often be ambiguous. I recommend speaking with a few attorneys to get their take on that. Same thing regarding taxes, we recommend you speak with a few accountants, as this also varies widely. Apologies again I couldn't be more helpful on your followup question. Having said that, here is some info on New York's definition: www.dos.ny.gov/cnsl/do_bus.html
You helped me a lot thank you! Your other videos were also very helpful thank you again and keep up the good work ;)
Hey man, thank you for the kind words!! We certainly will!! :-)
I'm starting a few business. I plan on having Legal name and everything else as DBA. Most of the businesses will be. Web based for the most part ie products, social media consulting, digital software, affiliates sales, vacation/travel. are the first five companies. I only need to be concerned with the legal name as far as filing and does the state matter in this case. I am a partner in a physical business that is unrelated to any of the new businesses I am starting
Hi Araje, I don't fully understand your last question/statement, but whether or not you want just 1 LLC, 1 LLC and multiple DBAs, or multiple LLCs is up to you. You can do business (with all of those activities) under "one roof", aka 1 LLC. You certainly can, but it's not that fun, filing 5+ DBAs. It can be a little tedious. Again though, you can mix things up any way you'd like.
I formed an LLC through an agent in Utah but I reside in NJ. I haven't used this for anything since.. Can I cancel and form another in my home state?
Yes, you certainly can. You can file an Articles of Dissolution is Utah. It's free. Here's the form: corporations.utah.gov/wp-content/uploads/2021/09/llcdiss.pdf
I may have missed it somewhere in your videos, but what if I create a LLC in California, but then move to a different state? Can I switch the LLC over so I don't have to pay Californians ridiculous fees, and just pay the new states?
-thanks
Hi Colby, there's generally 3 ways to "move" an LLC. Dissolve LLC 1 and form LLC 2. Register LLC 1 as a Foreign LLC in the new state. Or "redomesticate (if allowed) from state 1 to state 2. If you're permanently looking to move out of California and will setup residency in another state, dissolving the LLC in California and setting up a new LLC in your new state (or redomesticating) will be better. If you filed a Foreign LLC registration, you'd still owe CA annual franchise tax.
Hello For subsidiary/ child company formation is it usually required that the parent company name and members / owners name both be listed to create llc ?
No, on the subsidiary LLC filing (which is just a regular LLC filing), if the Members or Managers are required to be listed, you can just list the name of the parent LLC (not the Members of the parent LLC).
@@llcuniversity okay, though wouldn't there be a of an actual person's name to bind contracts for the business?
That doesn't need to be on the state filing. That would be in your Operating Agreement and depend on how the LLC is managed.
Meaning, you can have your subsidiary LLC owned by your holding company LLC, but you can make the subsidiary LLC Manager-managed, and you can be the Manager. In this context, you'd sign and bind the subsidiary LLC.
If the subsidiary LLC is Member-managed, it will be managed by the holding company, which is managed by you. So it would be you signing, but on behalf of the holding company.
Let's look at signature blocks. That'll make it easier. And let's pretend the holding company is called ABC Holdings LLC and its subsidiary is called XYZ Investments LLC.
Signature block for the subsidiary company if it's Manager-managed, and Davion is Manager:
_______________________________ (signature)
XYZ Investments LLC
By: Davion Savant, its Manager
Signature block for the subsidiary company if it's Member-managed by holding company:
_______________________________ (signature)
XYZ Investments LLC
By: ABC Holdings, LLC, it's Managing Member
By: Davion Savant, its Member
I have a transient food concession business and work outdoor events, so I work half the year in NJ and half the year in Fla.( I already have transient food vendor licences in both states) so if I wanted to form an LLC I would need to do so in both states? I am considered a resident of Fla (because of drivers licence, auto registration and bank account), but still file a NJ tax return for the six months I do events there. Everyone tells me I should form an LLC because I own real estate in both states and the liability potential of the food business but what you are saying sounds like a real pain.
+RoccosPlace1 - Hey Rocco, you'll want to form an LLC in Florida (since that is your home state) and then register your FL LLC in NJ as a "foreign LLC", allowing your FL LLC to do business in Jersey.
FL LLC is $125 to form, then $140 annual fee.
NJ foreign LLC is $125 to form, then $50 annual fee.
Curious, what part about what I said is a pain?
what if you form an llc in your home state but you live on state borders where you end up working in both states often, what should be done then? would i have to make an llc in that other state as well as your home state?
If you're LLC is doing business in multiple states, it's supposed to be registered as a foreign LLC in the state where it wasn't originally formed. Please see here: www.llcuniversity.com/what-is-a-foreign-llc/
How do they prove whether or not you are a foreign LLC? How is it proven that you are not operating in your home state?
It's them that has to prove it, but you, if the state catches wind.
You keep saying your "home state" aka "where you reside" but what if my residency is another state than where I do business? I think it's more beneficial for me to register in the states I do business, NOT where I am a resident...
You're right. Apologies about the confusion. It would have been much clear had we said this: an LLC should be formed in the state where it is doing business. We didn't realize it at the time (the potential confusion) since most people do business in the state where they reside... however, that's not the case 100% of the time. Hope that helps.
@@llcuniversity very much so! Your one quote really helped--about paying taxes whenever the business is conducted and then knowing it's easier to register in the state where the business is conducted :) thank you!
You're very welcome Kelly :)
What if I live in NYC but I want to purchase a house in nevada which I WONT use for investment purposes, making it easier to use an address in nevada, and my business is completely digital and not attached to one geographic region (dropshipping or youtube perhaps).
Would that be a potential situation to set up a foreign state llc, and would this work ONLY if I convince the government that that house in nevada is my primary residence and the nyc house is only secondary (even if I spend like 85% of the time in nyc)?
Hi Andrew are you thinking of forming a Nevada LLC or a New York LLC for the house in Nevada? Will this LLC also be used for dropshipping or youtube business? "Doing business" laws come into effect by where you are running things from. The states don't loosen their grip just because of the internet.
@@llcuniversity hi! I was thinking of doing a nevada llc, mainly for dropshipping (but considering other future digital income sources too)
Thanks sm for the reply, if I'm honest, I was under the impression that internet run businesses *kinda* meant you had autonomy with where the business is based in
If it were only that easy ;) New York, and every state, has laws regarding "doing business". So if you form an LLC in Nevada, you'll need to register your Nevada LLC as a foreign LLC (www.llcuniversity.com/what-is-a-foreign-llc/) in New York. You'll have to maintain two LLC filings. And you'll pay taxes in New York no matter where you form the LLC. To get the benefits of Nevada, you'd need to actually reside in Nevada. Hope that helps :)
What if you live between two states and choose to operate in the more affordable one?
It's a bit of a gray area. Where are you located?
I am thinking to open my company as LLC because i want to sell in U.S but i do not live there. What would you recommend in this case?
If you have a physical presence like employees, real estate, shop, store, etc., then you should form an LLC in that state. If not, then you can pick any state you'd like. Common states for foreigners are Delaware and Wyoming, but you can pick any state. It's also a good to speak to an accountant ahead of time regarding any tax consequences. Keep in mind that you'll also likely need to fly to the US to open an LLC bank account after your LLC is approved.
What if your primary concern isn't saving $1,000 in filing fees but having your business registered in the state that has charging order protection. Can you please speak to that
Hey, great question. Charging order protection is a complex matter. Meaning, really difficult to speak to in a comment, let alone a video. If you form an LLC in DE, then register it is a foreign LLC in your home state, if you're involved in a case in your home state, the court could completely disregard DE law and try the case under the laws of the state where the claim is made. Or not. It depends. You could form a DE company that owns the company in your home state. You could also dig into the creditors rights (foreclosure, assignees, remedies, etc.) in your state and/or speak with a lawyer. It's not so cut and dry as some youtube videos (and "promoters") may lead you to believe. Not saying it's incorrect. Not at all. It's just really complex. And to cover it from a straight educational standpoint (like no product to sell you afterward) would require complex legal research in all 50 states in addition to use-case scenarios for a handful of different situations. In summary, you gotta really dig into it. Maybe get some legal advice. We want to cover something like this, but it's a beast of an undertaking. Hope that helps and thanks for your understanding :)
What about truck drivers? I can use one of my grandfathers suite numbers he uses for his business in texas, for my business. Then form an llc and register the business etc. But I live in Tennessee. But as a truck driver can't I use that address in texas?
I'm not 100% sure about the logistics business. Do you have a license to operate which was granted in TN? If not, then you should be okay with a Texas LLC. Hope that helps.
Great video!!! I Appreciate it!!!
Thanks Jason! You're very welcome :-)
Hello. I am in Pakistan. I don't have any physical location there. What do you suggest?
Hey Raja, you pick any state you'd like. Biggest things to think of are opening a bank account for your LLC and using a good Registered Agent. I'd start here: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. Hope that helps!
Hello!! I don't live in US but want do online business in US. What you recommend?
Hey Ramiz, if you are going to transact business physically in the US, you'd want to pick that state. If not, you can pick any state you'd like. We have info for non-US residents on EIN (www.llcuniversity.com/irs/how-to-apply-for-ein-without-ssn/) and banking (www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/). The banking part may influence your state choice. Hope that helps.
What are the benefits of doing a out of state LLC if their are any? And wouldnt you say some benefit from it? Like if they had a property in many states they can declare the other state at those states despite they live abroad most of the year or online?
What other things about LLC are their that most do not know about?
Also how do the rich benefit from a LLC when doing business in a no income taxes country?
Maybe the LLC is a false advertising in how you present it which is improper in what the states does.
Hi Trench, one benefit of an out of state LLC could be to use that LLC as a holding company. Meaning, it owns other LLCs. I wouldn't say the rich benefit from using an LLC when doing business in a no income country. That doesn't apply to US citizens and residents, which are taxed under a worldwide income regime.
@@llcuniversity regime LOL
Any thoughts on Puero Rico?
And having a LLC from another country which some companies advise a person to register their property in a europe country to save on capital gains?
Also does LLC have to indicate who the owner is or can it indicate a president with only with 1% of shares?
When looking on LLC to search owners many are like a spiderweb of LLC owning another and have a office address with 100 other llc in the same room with owner name being an llc again and sometimes out of state. It seems fishy to me when trying to find the owner as f they know something when doing these mazes of llc.
@@trench01 - Yea lol, "regime", what a word! I'm not up on all the rules re: PR. As far as public records go, there's like 15-20 states where Members are not listed publicly. So it's not required in many states. In terms of taxes and out-of-country entities, that's a vastly complex subject matter best saved for conversations with accountants. Hope that helps and thanks for your understanding.
How about if you don't live in Delaware but file as a corporation in your home state?
Hello, can you rephrase your questions so it's more specific? I'm not sure what you're asking. Thanks.
Excellent and informative video. Thank you!
You're welcome!
We are planning on becoming full times RVers and start a business that does mobile RV repair, which the work will be done in whatever state we happen to be in at the time. We have a home state to “winter” in and that would be our place that we would set up our LLC. I don’t know if it’s ok or whatever about being a mobile business traveling state to state.
Hi Gregory, you should be fine with just forming the LLC in the winter-state, and not needing to register as a foreign LLC in the traveling-states.
LLC University Thank you!
You're welcome Gregory.
I'm from the UK and will be selling on Amazon USA. Is there a particular state that would offer me the best perks for my situation?
Hi Karandeep, it can depend on a multitude of factors. However, something like this is best discussed with a tax attorney. You may want to look at how a decision like this could impact sales tax. Hope that helps.
hi, I found this video very informative. I have a question about foreigners. What would be the best strutucture for doing real estate business for offshore companies(real foreign entity)?
Hey there, glad it was helpful. Unfortunately, there isn't one answer that describes the best entity. Foreigners can form US companies owned by foreign companies (or owned individually) or foreigners can operate foreign corporations in the US. Many choose to setup a separate US entity for better asset protection. But again, it varies widely. We recommend speaking with a tax attorney. Hope that helps.
@@llcuniversity Thanks. I appreciate your honest answer!
@@estagio99 You're welcome :)
those this information still apply in 2018? I'm asking because I'm a 25 yo who just starting my business.
Hey Tito, yes, it does :)
What if you create an Address in that state?
Hi Mike, if actual business activities are being carried out at that physical location, then the LLC will be transacting business there. How were you going to go about "creating" the address? And what is your overall vision/strategy? What type of business will this be?
What about an LLC for an online business that sources all of its income outside of the US? Both in terms of who pays the LLC and where the customers of the clients of the LLC are sourced. (It's an advertisement company.) What would be your suggestion for an optimal LLC structure in terms of taxes and asset protection?
Something like this needs to be discussed with a tax professional who works with foreigners and understands tax treaties (if applicable). If the LLC is foreign-owned (by foreign individual or foreign corporation) and single-member, you'll still need to report to the IRS via Form 5472 and an 1120. You likely won't have ECI or FDAP, but again, you'll need to speak with an accountant. Thanks for your understanding.
Thank you for your swift reply.
You're welcome!
My band wants to form an LLC and makes money across multiple states. Does this complicate things for us?
Nope :) Just form the LLC in the home state where you or most of the members reside. Hope that helps.
What about the non-US resident people who wants to run online business?
You can pick any state that you'd like. Hope that helps.
The land and timber assets I want to set up an LLC to manage is not in the state I live in. What is the best course for which state to form my LLC?
Hey Derrick, I'd form the LLC where the assets are located or where you're running the business from. If you can provide some more details, that would also be helpful. Thanks!
i Am from India and would like to start LLC in USA which state is best my business is Staffing .and how much time it takes
Which state can depend on many factors. If you're actually "doing business" in a particular state (office, employees, etc), you may want to look at that state. If you're not going to be doing business anywhere, you could pick any state... however, if you want to open a US bank account, that could influence your decision. Please see here regarding banking: www.llcuniversity.com/foreigners/open-us-bank-account-llc-non-resident/. How long it takes for an LLC to be approved, depends on the state in which you form an LLC. It can be as fast as 1-2 days... or it can take a few weeks. Hope that helps.
if I form my business using llc will the company have its own name or will llc be attached to it.
am opening a restaurant
Yes, the LLC will have it's own name. For example, it could be "John's Restaurant LLC" or "Tasty Delicious LLC"... meaning it doesn't have to have your name in it, but it can if you want. Check our our Learning Center (www.llcuniversity.com/learning-center/) and click on "1. LLC Name". I explain it even further there.
a very useful explanation. I learned more details from your movies. thanks to you and for your effort
and I need to help me
I incorporated an LLC in Delaware and license a new institute now in Washington DC I think that I have problems now according to your movies
You're very welcome Amr. Thanks for your comment :)
i am looking to registered llc for the amazon business. can you suggest me the best state where had no income tax or sales tax or any other type of tax and not any yearly charges. some people said texas is the best because no yearly renewal charges and free shipping in the state on the other hand some people said wyoming or nevada is the best. can you help me out.
Hi Muhammad, we can't answer questions like this since there are many factors. We recommend speaking with an accountant regarding sales tax. Income tax will be paid in the state where you reside, regardless of where the LLC is formed.
What if I form my Delaware LLC but live in Florida? Is that good? What if I accept freelance work in different states? What's good and bad about it?
If you're transacting business in Florida, that is where the LLC should be formed/registered. It's more about where you are operating from, not where your customers/clients are location. You can work with people all over the country/world. Hope that helps.
LLC University that helps but it made me think how my type of work, blogging, with potential to get clients everywhere is not such a good idea, considering the tax implications everywhere. And it’s not like blogging is lucrative. It made me think perhaps that’s why companies outsource this type of work outside the country as doing it in the states is not worth it unless you’re offering a much higher fee to pay off taxes.
Taxes aren't paid like that. You file federal income taxes, based off your net income. And your state income tax will be paid in the state where you reside (not in all the state where you have clients/customers). Hope that helps.
What if you live and run your business out of an RV and your physical residence is mobile and traveling around the country while you conduct your business?
Hey Jeff, you'll still need to pick a state to make a "base" for the LLC. Most RV/digital nomad folks setup their LLC in the state where they claim residency, pay taxes, and have their driver's license.
Very helpful Matt. Thanks for responding to my question!
You're welcome Jeff!
what about a offshore holding company that holds my local LLC stock.to protect any assets I have from lawsuit.i would expect business liability insurance to cover lawsuit.
To be honest, I'm not sure. We don't get into entities formed outside of the US. It opens up entirely different territory and variation.
Hello. Please reply to me! Thanks for video ! If I have an ecommerce business and I do it all over the states and even ship products worldwide. So where should I open my LLC and pay taxes? (I temporary reside in New York but I'm not a US citizen)?
Hey Coco, I recommend setting up the LLC in the state where you work FROM. That's where you're doing business, according to the state. Although customers are everywhere, wherever you run/operate/manage the business from is where the LLC should be formed. Hope that helps :)
LLC University thank you so much for the fast reply! Have a good night
You're welcome Coco :)
I’m in California and I am the agent for my husband’s LLC but I want to open my own LLC can I use the same address?
Hello, yes, you can. In theory, if you wanted to be the Registered Agent for 2,000 LLCs, you could. Hope that helps :)
so i could run multiple business assets through one llc or do i need to create more?
Hi Jesus, yes, you can.
Thanks for the video. What if my home state doesn't pay state taxes like Texas? But if I form my llc in foreing state because Texas is banned from the company I want to do business with
Hi Emmanuel, yes, Texas doesn't have personal state income tax. However, I don't fully understand your question. Can you rephrase it please?
@@llcuniversity Thank you. I want to do business with a company that doesnt accept Texas residents. If I create LLC in foreign state, will I have extra yearly expenses when I want to file taxes?
You'll still be a Texas resident though, regardless of where you form the LLC. Won't you still run into the same issue? Also, if you form an LLC out of state, but that LLC is doing business in Texas, you'll need to register the out-of-state LLC as a foreign LLC in Texas (www.llcuniversity.com/what-is-a-foreign-llc/). A foreign LLC registration in Texas is twice as expensive as a regular (Domestic) LLC filing in Texas.
does this count if my business is online only?
Yes, it counts, since states don't care much about "online" businesses. Look at it from another angle... where are you regularly running your online business from? That's the state where your LLC is transacting business.
If you are a small company and make no money this video is for you. If you make bigger money research with people that knows better. I save millions every year using out of state llc and Inc. Do you research.
Hey Tony, thanks for your comment. The majority of our audience is getting started, but we do have more experienced viewers too. We could have also done a better job in this video explaining that. Hindsight is 20/20. If you care to share more about your setup, please do.
Hi can I open LLC in Michigan for an online business which will be operated by overseas employees online to do business in 4 different state of USA
Hi Julie, yes, you can open an LLC in Michigan. If you start transacting business in multiple states, you're supposed to register your Michigan LLC as a "foreign LLC" in those states. We have more info here: www.llcuniversity.com/what-is-a-foreign-llc/. Hope that helps.
I live in India but need to register a company in usa which is the best state to register llc
There isn't a simple answer, as it depends on multiple things. Having said that, if you don't have a physical presence or employees in the US, you can choose any state you'd like.
what if i created an LLC using incfile .com and i formed in nevada. i live in florida and i am going to sell my marketing services locally. so bad i read this late. this friday i have to pay the File Initial List/State Business License.
I dont want to pay double licenses. Could be possible to stop or quit the nevada llc anyhow? so i can restart all the way my llc in florida?
Sorry to hear about that :( In this case, you'll want to shut down your Nevada LLC. This is known as dissolution and the form/filing is officially called "Articles of Dissolution for a Nevada Limited Liability Company". The NV state fee for dissolution is $100. You can form your Florida LLC at any time you'd like. You don't have to wait for the Nevada dissolution to be filed/approved first.
From Tennessee and Moving to Georgia, What is a better state to form a LLC?
When are you moving to Georgia? And what kind of business will you be involved in?
March, and Ecommerce Retail
Hey Tony, I'd just form in Georgia then, since you'll actually be doing business there. If you formed the LLC in Tennessee first, then moved to Georgia, you'd have to register your TN LLC in GA, which is called a Foreign LLC registration/qualification (more info here: www.llcuniversity.com/what-is-a-foreign-llc/). That pretty much leads to twice the cost. Also, on the plus side, GA's annual fee is far cheaper than TN. $50 vs. $300. Hope that helps. Let me know if you need anything else.
Hi Bro, I want to form LLC in georgia . Do you know best CPA in Georgia or someone who can do well with LLC ? THX for your time.