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  1. #1

    How to register as an LLC?

    Can anyone give advice on how to register as an LLC in Delaware or Massachusetts?

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    Last edited by anon-e-mouse; 05-30-2005 at 03:09 AM.

  2. #2
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  4. #4
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    Try:
    www.legalzoom.com

    They've got a good reputation and good prices.

  5. #5

    cost

    Does anybody have an idea how much it costs to register an LLC?
    www.rerioa.com

  6. #6
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    Re: cost

    Originally posted by webh0sting
    Does anybody have an idea how much it costs to register an LLC?
    www.rerioa.com
    It depends on the state you're forming the LLC in. If you do a search for LLC on google visit one of the sites and click on the state you'll be forming it in it will give you an idea of the prices.

    Alternatively you can visit the secretary of state's website for your state and do some searching there.
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  7. #7
    Visit your secretary of state's website. Download the forms. Fill them out. Send them in. You just saved several hundred.

    Of course, you could just do it the first time through bizfilings/legalzoom and then know how simple it is to do it yourself next time. Use your lawyer as your registered agent.
    So far I have not needed to make 31 posts thanks to the search function.

  8. #8
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    For those in Pennsylvania, http://www.paopen4business.state.pa....te/default.asp is a great link. It has all the forms you can download/print and mail into the state, or you can actually register your business online.

  9. #9
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    For DE: www.thedelawarecompany.com - Very fast and affordable.
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  10. #10
    I would also note there is no advantage to filing in another state.
    So far I have not needed to make 31 posts thanks to the search function.

  11. #11
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    No advantage???


    Over 50% of all companies on the NY Stock Exchange are Delaware corporations. Delaware has a long heritage as a business-friendly state and may be a good choice if you intend to take your company public and offer publicly traded stock. Delaware has many other advantages, including low incorporation fees, low annual franchise taxes, and no state corporate income tax for corporations that operate outside of Delaware. Furthermore, Delaware maintains a separate court system for business, called the "Court of Chancery." This Court is known for its well-established record of decisions and the speed at which it handles disputes. So instead of spending your valuable time in court, you can spend it running your business. Be aware, however, that if you incorporate in Delaware while your business is located outside of Delaware, you may need to qualify to do business in your home jurisdiction. This may require an extra step and an additional fee to your home state.

    Nevada has become increasingly friendly to corporations with its privacy and liability protection status as well as certain tax advantages. Nevada has no state tax on corporate profits, no state annual franchise tax, or no state personal income tax. Stockholders of a Nevada corporation are not public record, allowing complete anonymity. Be aware, however, that if you incorporate in Nevada while your business is located outside of Nevada, you may need to qualify to do business in your home jurisdiction. This may require an extra step and an additional fee to your home state.

    Your Home State
    Advantages

    * Typically the least complicated, if you only plan to operate the business in your home state.
    * Usually costs less to incorporate locally.
    * Avoid paying franchise taxes and filing annual reports in more than one state.

    Disadvantages
    You may miss out on tax advantages of doing business in Delaware or Nevada.


    Delaware
    Advantages

    * Good choice if you plan on taking your company public and offering publicly traded stock.
    * Low incorporation fees.
    * Low annual franchise taxes.
    * No state corporate income tax for businesses operating outside of Delaware.
    * Delaware maintains a separate and speedy court system, the Court of Chancery, for businesses.

    Disadvantages
    May need to qualify to do business in your home jurisdiction.


    Nevada
    Advantages

    * No state tax on corporate profits.
    * No state annual franchise tax.
    * No state personal income tax.
    * Complete anonymity – stockholders in Nevada are not public record.

    Disadvantages
    May need to qualify to do business in your home jurisdiction.

  12. #12
    Um. I'm sorry you typed all that out / pasted it, but there is no monetary advantage. You are wrong.
    Last edited by Muzzleflash; 05-30-2005 at 09:43 PM.
    So far I have not needed to make 31 posts thanks to the search function.

  13. #13
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    For Massachusetts, you can file through mass.gov.
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  14. #14
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    Wow, happy I found this topic. For awhile now, I was thinking about using one of those services to register my LLC-- I had no idea where to begin. I figured it would cost about $300-350 total. After 5 minutes of looking at the Connecticut Website, I printed out two 1 page forms (each with 7 questions, each took 30 seconds to fill out) and am ready to send them out with only $90 filling fee. It's THAT simple. I need an EIN to open a checking account and it looks like it takes no more than a few minutes to fill out the online application for it on the IRS website. (LegalZoom says they will save you the "hassle" of filing out the "tedious" SS-4 for EIN when in reality it looks like something a 6 year old could fill out.

    Very happy I found this topic-- All I needed was an application for reservation of name and articles of organization.

    Thanks!

    Steve

  15. #15
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    Originally posted by Muzzleflash
    Um. I'm sorry you typed all that out / pasted it, but there is no monetary advantage. You are wrong.
    First you said, "no advantage". Then, you changed it to, "no monetary advantage."

    It all depends on where your home state is and what you're hoping to achieve as to why you'd file out of your home state.

    You aparently didn't even bother to read what I provided or have ever bothered to talk to a competent tax/business/legal advisor on the issue.

    http://www.taxfoundation.org/taxdata/show/230.html

    There are most certaintly potential tax (ie monetary) advantages to filing outside your home state.

  16. #16
    You aparently didn't even bother to read what I provided or have ever bothered to talk to a competent tax/business/legal advisor on the issue.
    Clearly, neither have you.

    If you form in a state other than your own, you still need to file to do business in the state that you have a presence in, so it will ultimately end up costing you more money.

    The only reason someone thinks that you save money incorporating in, for example, Delaware is for tax reasons, but if you make money in your state, they are going to want a piece of it too. So I repeat - you do not save money by forming a company in a state other than your own despite what you may have read.

    The reason that people file in Delaware is because of the precedence that is set in the courts for being business friendly. This is the main reason. Specifically, the only reason to file incorporation [S, C or LLC] in a state other than where you will have a presence is the way the state's laws and courts treat business. Even more specifically, the strategy of incorporating or forming an LLC in Delaware/Nevada/another state is really only for businesses that have a high probability of being sued. Usually, business entities are formed in these states as part of a double incorporation strategy. The goal of this strategy is essentially to isolate the assets of the business from any potential risks. One entity is the “at-risk” entity and deals with the public. The second entity holds key assets [equipment, valuable domain names, trademarks, etc.]. These assets are then leased back to the "at-risk" business entity. Medical professionals frequently use this strategy.

    If you intend to form a single entity, you should probably do it in your state. The “favorable law” arguments for using Nevada and Delaware are not as strong as advertised. If you get sued in a particular state, the laws of that state will almost always be applied to your business. For instance, a California court couldn't care less if you are a Nevada LLC. The court will apply California law.

    I read your link on income tax. However, if the income is earned in your home state [and it is because that is where you have a presence], most states [I will say "most" because I don't know tax law for all states] will make you fill out your income tax based on where the income was earned, not where the business was formed. The state you work in will want their cut and since you do no work in Delaware, their tax law is moot.

    From the tax perspective, you have to consider where you are actually conducting business. If you are working out of your house or an office in, for example, IL, you are conducting business in IL. The IL tax authorities are going to expect you to pay state taxes. If you don’t, you could face major fines, back taxes, interest, penalties and potential jail time.

    As I also understand it, in order to preserve your treatment as say a Delaware corporation, you would need to maintain some type of presence in that state. This would likely be "the home office" which in reality is a mailbox or a file drawer in say an attorney's office. Either of which would have a cost attached and I doubt that would stand up to scrutiny in court if push ever came to shove.
    So far I have not needed to make 31 posts thanks to the search function.

  17. #17
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    Originally posted by Lightwave
    First you said, "no advantage". Then, you changed it to, "no monetary advantage."

    http://www.taxfoundation.org/taxdata/show/230.html
    I realize you are not an accountant or an attorney (neither am I), so it's not your fault that you don't know that the table you've referenced above is corporate income tax rates. The reason most people create an LLC is that it can be taxed as either a corporation or as a partnership, and it has all the liability protection benefits of a corporation.

    If you are paying the tax rates above, your entity is taxed as a corporation. I believe you can elect to tax your S-corporation as a partnership as well. If you pay corporate income tax on profits, then distribute dividends to yourself, then pay taxes again, you are paying what accountants call "double tax," and you should definately speak with your accountant about your options to correct it. Sometimes being taxed as a corporation is an advantage, but you have to keep a lot of good documentation in place to take advantage of that without risking IRS penalties.

    Now, there are a few advantages to registering your LLC in Nevada, but they'll only really protect you if you have an office there. Attorneys will tell you to basically register in your home state and save yourself some filing fees (because if you do business in, say, Tennessee but are a Delaware entity, you must register yourself as a foreign corporation doing business in Tennessee) or to maintain your headquarters in Nevada, because that is a determining factor for most of the legal protections afforded Nevada LLCs (and their members.)

    In short, though, seek the advice of both an accountant and an attorney before you decide how to structure and tax your entity. If you want to be a business person, be prepared to spend some money to have things done right. My attorney only charged me around $700 to setup my LLC and my accountant's fees were even less.
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  18. #18
    Pwned. X2.
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  19. #19
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    Look at Wyoming too - there is no personal income tax and the corp taxes on real and intangible property are very reasonable.

    Some states require you to have an "agent" or legitimate address for sending legal work to in their state as mentioned above. The online sites that offer registration services often will have this designated agent service available for a reasonable cost.

    With the advent of the internet your actual place of business is not as dependant on a physical address as it once was. Net business entities often have more than one person involved and those people are often in more than one state making the physical location of an internet business a lightly different animal than a brick and mortar outlet.

    One of the reasons many corps go Delaware and Nevada is the privacy laws in those states. They don't release your corp info easily to outsiders, or even the government. Offshore corp registrations are also gaining popularity for that reason. You still have to pay taxes but it is difficult for anyone to find out who is behind the company.
    Last edited by BethSG; 06-02-2005 at 01:05 PM.
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  20. #20
    As Charley Brown put it, 'Auuuugh!'.

    Maybe I should start charging people to give them proper LLC and Corp advice.

    *sigh*

    Most people who have done anything with you to the point of wanting to look you up to sue you or whatnot would probably already know where your LLC is located because of the previous business relationship. If not, they would conduct a public records search or hire a private investigator to find you. It isn't a very difficult process.

    A registered agent is only a designated contact point in that state. The RA will receive correspondence from the state and accept service of process of any legal documents. Accepting service doesn't equate to protecting you.
    So far I have not needed to make 31 posts thanks to the search function.

  21. #21
    Ok, all these arguing posts. Here's what I did, it worked for me, maybe not you. Sure I could've gone to Legalzoom.com and did my incorporation there, but very important legal issues, like incorporation, I just don't feel comfortable doing those things online. I was moving to Florida and wanted to start my own business. I looked into Incorporating in Nevada, Delaware, and my home state of Florida, I called dozens of different places to find out what would be best for me.

    In Nevada, if you want to be a corporation, you technically must have an office there, if you don't have an office, you must hire someone as a registered agent, that can accept legal documents and be your "business entity" in Nevada. Most of the places I looked at wanted to charge upwards of $1,000 to get started and another $500 - $1000 a year after that. While Nevada does have some advantages, like taxes, they also have state laws that protect corporations as well. Technically in Nevada you can also put a fictitious owner name on your corporate records or leave it blank, because the State of Nevada keeps all corporate information private and will not share it with anyone, including the Federal government. I decided Nevada was not the place for me, mainly because of the cost.

    Delaware on the is a pretty good place to incorporate, it has the no state tax benefits and there are plenty of places that will be your registered agent (they have thousand of office parks full of registered agents). However still they want about $300 - $500/year to be a registered agent.

    I ended up calling a local lawyer in Florida to handle setting up my LLC because 1) it's my home state, 2) it has the no state tax benefit, 3) I didn't have to pay for a registered agent, and 4) I'd rather have a lawyer take care of legal issues, instead of me being responsible for them.

  22. #22
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    I wonder how you guys will all look sitting in a dinner table having dinner and discussing these issues. Perhaps WHT should invite everyone on a specific thread, such as this one, to dinner talk! :-) It will definately get popularity!

  23. #23
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    I've heard that Delaware has more tax breaks - we kicked around the idea too, jokingly really. It's basically like the thousands of U.S. companies that claim to be based out of the Cayman Islands; each with a mailbox there. Lots of people get away with it, but I'm pretty certain it's illegal.

    You'll need to call up the IRS and get an EIN number if you haven't yet. Then fill out a form with your secretary of state. If you've never phoned the IRS before, well, have fun The whole process is pretty easy really, just tedious.
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