What's the Best State to Form Your LLC in?

Home » What's the Best State to Form Your LLC in?

Deal alert! Our favorite company, Northwest, is forming LLCs for $39 (60% off!) See details.

Summary: It’s best to form your LLC in your home state because that is where your LLC is transacting business. Even an online business is still transacting in your home state. Forming an LLC in Delaware, Nevada, or Wyoming usually ends up costing a lot more. More headaches, too.

Two exceptions: Non-US residents can choose any state. And real estate investors often form a parent LLC in Wyoming, then the Wyoming LLC owns a child LLC set up in the property state. One quirk: if you live in California, you’ll likely be doing business in California no matter where you form your LLC. So you’ll need to form an LLC in California or register your out-of-state LLC as a foreign LLC.

Best State to Form an LLC? - Form an LLC (4/11)

We see this all over the internet:

“Nevada has no corporate income tax.”
“Wyoming LLCs are the most affordable.”
“Delaware is the best state to form an LLC!”

To be completely honest with you, it’s mostly B.S. and doesn’t apply to the vast majority of people forming an LLC.

The disadvantages of forming an LLC outside of your home state far outweigh the perceived “advantages”.

Let us explain:

Domestic LLC vs. Foreign LLC

If you form an LLC in the state where you reside (aka your “home state”), this is known as a Domestic LLC.

If you form an LLC outside of your home state, you’ll be required to register that out-of-state LLC as a Foreign LLC in your home state.

For example, if you form an LLC in Nevada (but you don’t live there), then you’ll be required to register that Nevada LLC in your home state (as a Foreign LLC) in order to do business in your home state.

This means:

  • you now have 2 LLCs (one in Nevada and one in your home state)
  • you have to pay 2 State filing fees
  • you will be required to pay for a Registered Agent in order to use their address for your Nevada LLC
  • you have to pay 2 Annual Report fees

Note: We used Nevada above as an example, but the same applies to any out-of-state LLC.

In short, this can easily add up to DOUBLE the cost and DOUBLE the headaches since you have to maintain 2 LLCs.

Need to save time? Hire a company to form your LLC:
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)

(check out Northwest vs LegalZoom)

States charge fines and penalties

All state governments enforce their rules that require an LLC to be registered as a foreign LLC if it is transacting business in their state. Enforcement can include fines, penalties, interest, court costs, and having the LLC’s ability to transact business completely put on hold.

Some states have higher fines than others, but all states have statutes which spell out the consequences of an LLC illegally transacting business in their state.

In some states, the fines can be a few hundred dollars per year. In other states, the fines can be thousands of dollars per year.

Take for example the Connecticut Secretary of State. In conjunction with the Attorney General, they collected $1.3 million from companies that were illegally doing business in Connecticut (not registered as foreign entities). Some companies were only fined a few hundred dollars, however most companies were charged a lot more. The average fine was $4,600 and the highest fine was $30,795.

As per Section 34-275a of the Connecticut LLC Act, if your out-of-state LLC is doing business in Connecticut but fails to register as a foreign LLC within 90 days:

  • The state imposes a $300 per month penalty.
  • Your out-of-state LLC owes taxes and fees for all the years (and partial years) it failed to register.
  • Your out-of-state LLC is also charged interest and penalties for not paying the taxes and fees it should have paid.
  • The penalties are levied by the Secretary of State, but if necessary, the Attorney General will sue your out-of-state LLC to recover all the amounts due.
  • The Attorney General can also issue an injunction preventing your out-of-state LLC from doing any more business.
  • While your out-of-state LLC can defend itself in a lawsuit, it cannot sue another party in Connecticut.
  • Your out-of-state LLC won’t be able transact business in Connecticut until all civil penalties are paid (including interest and court costs) and the LLC properly registers as a foreign LLC.

If you want to form your LLC in one state and then register that LLC as a foreign LLC in the state(s) where it’s transacting business, then this whole thing may not be a big deal.

However, a lot of small business owners don’t want to pay for an LLC filing in multiple states since it requires multiple filing fees, multiple annual report fees (and potentially other annual requirements), in addition to maintaining a Registered Agent in multiple states.

Taxes Are Paid Where Money Is Made

Many people are misled into forming LLCs in other States to take advantage of “tax savings”.

This is simply not true.

In this example, if you formed a Nevada LLC and that LLC is doing business in your home state (not in Nevada), you’ll still need to pay taxes in your home state because that is where you are making money.

A helpful saying to remember is:

“Taxes are paid where money is made.”

Again, your Foreign LLC will need to pay taxes in your home state since that is where you are operating and doing business.

Even worse, you may owe additional taxes and fees in Nevada.

So why do so many websites talk about Nevada LLCs?

Great question.


Again, most of the benefits of forming an LLC outside your “home state” are a far stretch from the truth.

Both the states themselves and the companies promoting those states stand to gain financially by LLCs being created within THAT state’s borders.

For example, if 40,000 LLCs are formed each year in Nevada, that’s approximately $3 million dollars in annual revenue for the state.

And that is just for the state of Nevada alone.

It doesn’t include the tens of millions of dollars made by the companies promoting Nevada as “the” place to form your LLC.

The funny thing is, compared to how much Nevada is “hyped up”, there really aren’t that many LLCs formed there each year.

There are far more LLCs formed in states that aren’t “hyped-up”.

Furthermore, Nevada companies rank the highest in fraudulent activity.

Look – don’t get us wrong, if you live in Nevada and you’re forming your LLC in Nevada, there is nothing wrong with that.

But if you don’t live in Nevada, again, it is much better to form your LLC in your home state.

So what about a Wyoming LLC?


Although there is far less fraudulent activity in Wyoming compared to Nevada, this state is also hyped up.

Again, the disadvantages of forming an LLC outside of your home state far outweigh the perceived “advantages” and are not worth the extra hassle, time and money.

In fact, it will cost you a lot more in the long run.

Forming your LLC where you reside is your best bet.

Before we discuss forming an LLC in your home state, let’s talk about the first state to ratify the United States Constitution.


Although small in a geographical sense, Delaware is quite large in terms of business activity.

In fact, according to Wikipedia, over 50% of U.S. publicly traded corporations and 60% of the Fortune 500 companies are incorporated in Delaware.

But, did you see the two words we underlined above?

Corporations” and “incorporated“.

You’ll notice these statistics say nothing about LLCs.

The fact is that Delaware is a good state to form a company in… if you’re a Corporation.

Delaware is best suited for publicly traded companies that sell shares on the stock market (like Microsoft, Apple, IBM, Chase, Coca-Cola), or companies that have multiple investors or need to raise venture capital.

But, most of our customers do not fall into that category.

If you form an LLC in Delaware (but don’t live there), you will still run into the same situation:

  • you’ll need to register your Delaware LLC as a Foreign LLC in your home state
  • pay annually for a Registered Agent, and
  • pay the Annual Reporting fees in both states every year

However, if you do live in Delaware (or your LLC in transacting business in Delaware), then you can form your LLC in Delaware.

Home State vs. “Magical States”

Again, forming your LLC outside of your home state is just not worth the hassle and cost.

This goes for Nevada, Wyoming, Delaware, and any other “magical” state.

Attorneys Alexander J. Davie & Dana Shultz agree: most of these states are just hyped up. Form an LLC in your home state.

Online Business

We get lots of questions like this: “My business is 100% online. Where should I form an LLC?

The answer in this case is still an LLC in your home state. Do you think by just being “online” that you can get around corporate law and tax law? That’s not how it works.

Many people run their online business from their home (or coffee shops and co-working spaces in town). That’s where you’re legally doing business. And that’s where you should form your LLC. It’s not a matter of where your customers are located (if you sell online); it’s a matter of where you are primarily (or repeatedly) running the business from.

Even if you travel often or run a location-independent business, the states don’t really care. You’ll need to pick a state where you have the greatest “connection”. This is most likely your home state, your state of residency, where you have your driver’s license, and where you pay state taxes.

My customers are all over the country/world

A lot of people are confused about the legal definition of “doing business”. They think it’s about where the customers are.

It’s not. It’s about where you are running and operating the business from.

You should form your LLC where you’re running the business and working from.

And just because you have customers or clients located in a few states doesn’t mean you need to register your LLC as a Foreign LLC in that state.

Issues with Seller’s Permits

Many LLC University® readers write to us about the issues they face after forming their LLC in the wrong state. We recently received this comment:

I live in California. I got some bad advice and made the mistake of registering my LLC in Utah back in June. Then I realized that I also needed to register in California as a Foreign LLC since I need a sellers permit for wholesale purchases.

If you need a Seller’s Permit (aka Reseller’s Permit or Resale Certificate), you’re likely going to run into similar issues. What really stinks about this situation is how much time and money has already been invested. In our example above, this reader now has to 1) register his Utah LLC as a Foreign LLC in California, 2) dissolve his Utah LLC and form a California LLC, or 3) Re-domicile (also known as conversion or re-domestication) his Utah LLC to California… which isn’t the easiest process. Then he has to sort out bank accounts, address updates, IRS updates, and all the other registrations that are in place with the Utah LLC.

You’re also likely to run into similar issues if you have to register your LLC with your state’s Department of Revenue (ex: sales tax registration) but your LLC is formed in another state.

LLC in Your Home State

This is the least expensive, easiest to set up, and the best long-term strategy for your LLC.

The reason why is that most people are running their business (regardless of where they form their LLC) from their home state.

Our friends at Northwest Registered Agent say it best:

“We get a lot of people these days coming up with some pretty goofy ideas. We always try to send them in the right direction before they go off and set up their 5-LLC-asset-protection-strategy to protect their new Taco stand idea.”

If you are primarily running your business from home or from locations in your home state, you are most likely transacting business in that state. And that’s the state where you should form your LLC (or register your out-of-state LLC as a foreign LLC).

Now yes, it’s possible to reside in North Carolina, for example, but have a factory and employees located in Virginia. In this situation, your LLC is most certainly transacting business in Virginia. However, it’s likely that your LLC is also transacting business in North Carolina if you are working from home to run your business activities in Virginia.

Another helpful way of determining your home state (if it’s not clear) is to imagine yourself in a state tax audit. Where would the court determine you are throughout most of the year? Where are most of your ties? For most people, this will most likely be the state where your LLC is also transacting business.

How would you answer the following questions:

  • What state are you a resident of?
  • Where do you pay rent?
  • Where do you own homes?
  • Where is your bank account?
  • Where is your driver’s license?
  • Where do you file a state tax return?
  • If you have other licenses/permits, in what state are they held?
  • Where are you registered to vote?
  • What states were you in for more than 183 days?
  • Where is your doctor?
  • Where is your dentist?
  • Where is your health insurance?
  • Where do your kids go to school?
  • Where is your church?
  • Where does your family wait for you while you’re traveling?
  • Where do you most frequently return to after traveling?
  • Where is your main office?
  • Where is your gym?
  • Where is your country club, group, or regular local meetings?
  • Where are your cars registered?
  • In what state is your car insurance?
  • Where are your pets?
  • Where is your veterinarian?
  • Where is your safe deposit box?
  • Where do you receive most of your mail?
  • Where are financial statements and bills sent?
  • From where do your social media posts’ originate?
  • Where are most of your toll records?
  • Where do the calls/text on your cell phone originate? (records have been subpoenaed)

Now not all the things above mean an LLC is transacting business in that state… it’s more so for people who think they are just doing business online… or doing business from “anywhere”. If you were in a state tax audit, the state where the court determines that you’re a resident is most likely the same state where your LLC is transacting business.

We hope this information is helpful to you.

We hope it cleared up a lot of the hype and misinformation about which state is best to form your LLC.

Now, there are some exceptions.

Non-U.S. Citizens and non-U.S. Residents

Note: There are no citizenship or residency requirements to forming an LLC in any US state. Non-US residents can form LLCs in the USA.

If you are a non-US citizen or a non-US resident, it comes down to how the business is run.

If you’re going to have an office, employees, or physical presence in the USA, then you should form your LLC in that state. This is the state where the LLC will be transacting business.

If your business will have no physical presence in the USA, then you can choose any state.

The type of US taxes and state taxes you pay will depend on how your business makes money. There isn’t a simple answer for what the “best state” is for the lowest taxes for non-us residents/citizens. It all comes down to the type of business you have. And this isn’t something we can answer for you. You’ll need to speak with an accountant familiar with non-resident alien taxation and the 60+ US tax treaties.

Having said that, while you can pick any state to form your LLC in (if there is no physical presence), how you obtain an EIN and open a bank account are different. And foreign-owned Single-Member LLCs have an additional filing requirement with the IRS. Related to all that, you’ll find these articles helpful:

Real Estate LLCs

As we mentioned earlier, when operating a business, it’s best to form your LLC in your home state (since that is where most LLCs are transacting business).

This is not the case for real estate LLCs.

Of course, if you are investing in real estate in the state where you live, then yes, it makes sense to form your LLC in your home state.

But if you are investing in real estate located in another state, it is best to form your LLC there.

Your LLC is doing business in that state if you’re generating rental income, buying and selling, wholesaling, or basically any method where you’re making money from your real estate investments.

If you were to purchase property out of state with an LLC that was formed in your home state, you would run into the same issue that we mentioned earlier.

You will be required to register the Domestic LLC in your home state as a Foreign LLC in the state where you are purchasing the property.

Which means that you now have to pay filing fees in both states, pay for a Registered Agent in the foreign state, pay annual fees in both states, and deal with the headaches of unnecessarily managing 2 LLCs.

In summary, it is best to form your LLC in the state where you are buying property since that is the state where your LLC is transacting business.

Matt Horwitz

Matt Horwitz
Founder & Educator, LLC University®
Matt Horwitz has been the leading expert on LLC education for the past decade. He founded LLC University in 2010 after realizing people needed simple and actionable instructions to start an LLC that other companies weren't offering. He's cited by Entrepreneur Magazine, Yahoo Finance, and the US Chamber of Commerce, and was featured by CNBC and InventRight.
Matt holds a Bachelor's Degree in business from Drexel University with a concentration in business law. He performs extensive research and analysis to convert state laws into simple instructions anyone can follow to form their LLC - all for free! Read more about Matt Horwitz and LLC University.

525 comments on “Best State to Form an LLC”

Disclaimer: Nothing on this page shall be interpreted as legal or tax advice. Rules and regulations vary by location. They also change over time and are specific to your situation. Furthermore, this comment section is provided so people can share their thoughts and experience. Please consult a licensed professional if you have legal or tax questions.

  1. Hello, I want to start a LLC in the US just for investment in the Financial Markets. I live overseas and I don’t have a US address. I thought in starting it in a low cost State (NM, OH or SC).

    My question is: Do I have to get a virtual address in that state or not? If so, any suggestion on a low cost alternative? Thanks and Kind Regards.

    • Hey Antonio, non-US citizens and non-US residents have a lot of options when it comes to what state they choose. And apologies for any confusion, since the video and webpage don’t pertain to you. I recommend checking with a tax professional who understands international taxes, as you may (or may not) need to file/pay US taxes, as well as taxes in your own country. I recommending making a few tax phone calls and then selecting the US state with the most favorable tax treatment for how your income is derived. International tax law is quite gray, so I’d talk with at least 5 people to get clarity. In general, non-resident aliens who have capital gains, and have their money held in a USD denomination, in a US brokerage account, will not pay capital gains tax in US. But you likely need to pay capital gains tax in your country. Also, dividends are taxed differently. You likely need to pay a 30% tax on dividends that are paid by US companies. That is just “in general” though. There are many exceptions (ex: dividends paid by non-US companies) to your situation though, so again, best to consult a number of tax professionals knowledgable and experienced in US/international tax law. Hope that helps a bit :)

    • And as far as an address goes, yes, you’ll need a physical/street address on your LLC forms. This is called the Registered Agent in most states. I would avoid the virtual office services, as those are more expensive. I recommend just hiring a Commercial Registered Agent. The company we recommend is Northwest Registered Agent. Any mail that is sent to your LLC will be scanned by them and uploaded to your online account. Hope that helps!

      • Hey Matt, nice video! I will invest in real estate in the near future, and I’m wondering where to form an LLC. I currently live in NH and do not plan to stay for long. My first investment will be in GA, but I plan on doing business in various states. Is Delaware or any of the hyped up states a good option?
        Thank you.

        • Hi Dieggo, thank you! You’ll want to form each LLC in the state where the property it will own is located. The reason for this is because the state where the property is located is the state where the LLC will legally be doing business. Depending on the value of your real estate and whether or not the state where you’re forming the LLC has charging order protection, some investors do form a parent LLC (Wyoming being the most popular), and then that Wyoming LLC will own the LLC formed in the state where the property is located.

          • Hi Matt,
            Much like Dieggo in this chat forum, I am planning to purchase rental real estate, first in Indiana, then in other states (Georgia, Texas, etc.). I understand the benefit of LLCs and the need to form real estate LLCs in the state where the property is located. What I would appreciate clarification on is the reason/benefit of forming a Wyoming LLC, as you mention a few times, which would own the “child” LLCs in the states where property is located as compared to simply forming an LLC within those states without the “parent” LLC in Wyoming. Thank you.

            • Hi Alex, great question. To add some clarification, the Wyoming LLC holding company isn’t our “go to recommendation”. We were just sharing an approach that some people take. This “what’s the best state” subject matter can get a bit complex and there’s no “one size fits all” (unfortunately). The main reason the holding company LLC is popular is for charging order protection (if you’re sued personally, having a holding company LLC may offer asset protection for the assets owned by the child LLCs). However, a caveat here is that charging order protection is not always straightforward. Meaning, there are details, quirks, and exceptions to the rules. If you have – or are going to have – lots of assets spread across multiple states, there really is a myriad of ways to take take title and structure your entities. We recommend speaking with at least one (if not a few) real estate and/or asset protection attorneys. Hope that helps.

      • Matt, i found your post to be the most useful. i am reading through a lot of comments, but I would like to be sure. so if I live in CA, but I want to invest real estate in OH, and I am thinking of opening an LLC in WY since it offers extra protection. i don’t plan to register a foreign LLC in CA, but I will file taxes in WY, and OH? am I on the right track?
        does it mean that I need to have a LLC in WY and a LLC in OH?
        do you see that potentially complex my tax situation?
        any advice?

        • Hi Nicole, what protection are you referring to regarding Wyoming? Those “protections” usually don’t apply unless you reside in Wyoming. Please also see When is an LLC doing business in California. As a California resident, if you form an LLC out of state, it would need to be registered as a foreign LLC in California, generally speaking. You could also go the other way around: form an LLC in California and register it as a foreign LLC in Ohio. Or another setup could be to form a California LLC and have that California LLC own an LLC in Ohio.

    • As a foreigner your tax is automattically witheld when you invest in US stocks. The tax rate is 30%. You dont even need to file a tax return as a foreigner as tax is automattically with held by the broker and paid to the IRS.

  2. Hey Matt:

    Thank you for your information! I live in New York and I just formed an LLC here. But I just found out that the article publication fee is so high and I can’t afford it, since my company doesn’t make money in this moment. What will be my other options? And will I still pay lots of taxes even if there is no revenue?

    Thanks a lot! Karen

    • Hi Karen! You’re very welcome. You will have to file taxes, but you will likely not owe anything with no revenue. You’ll need to pay for someone to do your taxes, so there might be some small fees there, but it shouldn’t be too bad. There aren’t really any other options, since if you closed this LLC ($60) and formed in another state, that wouldn’t help – it would actually be more expensive. If you form an out-of-state LLC, 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, 2 annual fees, AND you’ll still need to meet the publication requirements in New York. There’s a small catch, which I think will help though… you can fulfill the newspaper publication requirement at a later date (as in, after the deadline). Your LLC will still be valid, but you cannot sue in the NY court system until meeting this requirement, as per state law. In essence, your LLC is “not in good standing” but it will not prevent you from doing business and protecting your personal liability. We haven’t published an article on this yet, but please check out these resources: Ignoring the publication requirement and What if I don’t publish in NY (last section on page).

  3. Hi Matt, thanks for the info.
    How do you form a ” Series LLC ” ?
    Been reading about asset protection -real state- not sure how to go about it. Please advise

    • Hi Cici! We generally don’t recommend Series LLCs, as there is not a lot of case law supporting them, and taxes are quite “gray”. They can be overly complex, especially for businesses with less than $1M in assets, and for small business entrepreneurs. We currently don’t offer information/guides on Series LLCs, but recommend speaking with an attorney for more information. Thanks.

  4. Hello Matt. Thank you for all the information you provide. I and a partner are looking at purchasing a small existing company in our home state of CA. We are looking to establish an LLC during due diligence to protect us with the intent to later dissolve it since the business is already a corporation in CA. CA fees are high. If no income is made by the made by the LLC does creating in your home state matter at this point? Looking to not pay high state fees while we do research

    • Hey John, you’re very welcome! Regarding your situation, this is not something I’ve come across, so let me ask, is there a liability risk in the due diligence process? Or do you just need a company name on an LOI or similar document? All LLCs in CA, regardless of activity or income are subject to the FTB’s annual franchise tax ($800 per year).

  5. Hi Matt,

    We are thinking of starting an LLC, we r 3 or 4 partners, one from Canada and 3 of us reside in NJ, PA, and CA. We r using this for investment purposes only, would it still be better to open in one of our home states or in one of the other ones – ie. Nevada, Delaware. The investments are in CA.

    • Hey Ami, great question. I’m assuming you mean real estate? If that’s the case you’re “doing business” in the state where the property is located, so you’ll want to form your LLC in California. If you were to create the LLC out-of-state, you’d be be required to register as a Foreign LLC in California. Hope that helps! Let me know if you need anything else.

  6. Hi Matt,

    Thanks for the article. Currently, we have a Delaware registered entity operation out of Arizona. We did this because we are going through a multistage divestment and were advised that Delaware is the most flexible. I am currently forming a related entity that will be responsible for the trading aspects of our business. This entity will not go through divestment. Would it be better to incorporate this in Arizona or Delaware? It consists of four members with equal control.

    • Hi Samuel, apologies for the slow reply. It’s best to form the LLC in the state where you are transaction business, but this could be a bit gray in your setup (as in: what legally defines transaction business in AZ). I recommend getting in touch with a business lawyer to run this question by them. Hope that helps.

  7. What if I wanted more specific asset protection? Say for example, I wanted charging order protection for a single member LLC. Is it true that only some states provide this? Would it be beneficial to start a single member LLC out of state if my home state did not provide this protection?

    • Hi George, yes, you are correct. A common setup for charging order protection is setting up an LLC in a state that offers charging order protection (you own that LLC), and that having that LLC own your LLC in your home state.

  8. IF you form an LLC for R/E investing purposes (ie: take title in the LLC name), and then buy property in ‘4’ different states, WHICH state would be best for the ‘owners LLC’…? doesn’t make much sense IF you have to pay ‘4’ other states a ‘foreign LLC’ fee each year… let me know

    • Hey Goi, you’d either form an LLC in each state where you own property, or form 1 LLC in your home state, then do a Foreign LLC registration in each of the other states. Another setup is to form a holding company (say in Wyoming), then have that Wyoming LLC own each of the 4 other LLCs, each of which are formed in their respective property states.

      • Great info, how do you have the Holding company own the 4 separate LLCs? Is there something we need to put in the filing or some sort?

        • Hey Ray, it depends on the state where the child LLCs are located. Some states’ Articles of Organization (or similar document) ask for Member information, but many do not. In that case, you would just list the holding company as the Member in the LLC Operating Agreement. Or you’d enter the holding company as Member if the Articles of Organization (or similar document) asks for it. Make sure to form the holding LLC first. Hope that helps.

          • Very helpful Matt, cant appreciate your comments and expertise enough. I formed a parent Holding company in Wyoming, and an LLC in Detroit where i plan on investing property.

            When i register for my EIN would the business be considered in Detroit or CA? Sorry for the questions but your site has been helpful. I used Northwest registered agents which was easy as well. Cant TY enough.

            • Hey Ray, thank you for acknowledging! I aim to be as helpful as possible. During the EIN application, you’ll want to use your WY address as the LLC’s location address, but check off the box about having a different mailing address, and use your Detroit Michigan address there. Hope that helps!

              • Thanks Matt, just to be clear when applying for the EIN the physical address i should put the LLC WY address?

                Shouldnt the physical address be my home where i live in CA? And put the LLC address for the location of the WY LLC? Sorry just want to be clear.

                Also, when you say Detroit address you mean the LLC Detroit address? I would think you would use my investment property address.

                Thanks again.

                  • Hi Ray, which LLC are you getting the EIN for? The Wyoming LLC or the Michigan LLC?

                    • Im getting it for the Wyoming LLC as that is the Holding company which will oversee the LLC investment properties in Detroit. I live in CA fyi..

                    • Hi Ray, in step #3 (“Addresses / “Where is the LLC physically located”), I recommend using your Wyoming LLC address here, and then checking off “Yes” underneath for the “Do you have an address different from the above where you want your mail to be sent?” question (and listing your California mailing address). This way, all correspondence from the IRS will be sent to your California address. Then later in Step #4 (“Details / “Tell us about the LLC”), I recommend listing the county in Wyoming where your LLC is located, and selecting Wyoming for the following two drop downs (“State/Territory where LLC is located” and “State/Territory where articles of organization are filed”). Hope that helps clarify things.

      • Hi Matt,

        Thank you for providing this website. If you form a parent/holding LLC located in (DE, WY) that owns an operating LLC for LOI & P&S contract located in (NM, WY) that buys existing companies globally, would I have to foreign file either of these in my home state MA?

        • Hi Dee, if I understand correctly, you have not yet formed or filed any LLCs, but you’re thinking of a Parent/Child LLC setup, say for example, a Wyoming LLC is formed first and then that Wyoming LLC owns an LLC that is formed in New Mexico. Unless you have a “usual place of business” in Massachusetts, as per Section 15.01, it doesn’t sound like you’re doing business in Massachusetts and therefore wouldn’t need to register any LLC (Parent or Child) as a Foreign LLC. However, that’s a general overview and you may want to run this by an attorney or two in more detail. Hope that helps!

  9. Hi Matt,

    Appreciate the articles – very informative. We have a group with 4-5 partners (located in 3 different states but with equal control), and are looking for the best place to file for a domestic LLC. We will be primarily offering online courses via a membership-based platform and occasionally have live, in-person seminars, though they will never occur with any frequency in a specific state or locale. It seems as though we “could” be classified as doing business in multiple states and needing a few foreign LLC registrations, which could be cost-prohibitive to our startup. Is there a better way to approach this? Or, is an LLC not the best structure for our needs? Thank you!

    • Hey Andrew, thank you! In a cross-state multi-member setup it’s common to the form the LLC in the more affordable state, then if Foreign qualifications are needed, worry about that as you expand and your business grows.

  10. Hello Matt,
    I have owned 3 different LLCs in 3 different states. We have moved every 5 years, and I have stopped the LLCs in the old states and registered in the new states. I am now without an LLC and want to register a new one. My last state was Arizona and it had no annual filing requirements of fees. I’m now in Maryland and the annual filing is $300. #1) Income will be solely from Android apps from google play store or pay per click ads from google in California either way. Not sure what state the business is transacted in. Do I have to file foreign LLC in all states? #2) I will be moving to Florida or California in 5 years. No employees… just me. Which state do I form LLC in? I realize I have to pay income tax in Maryland, but why should I have to register a foreign LLC in Maryland if I choose to register it in another state?

    • Hey Lang, thanks for question. Your situation certainly doesn’t apply to our simplified article/video lol ;) Since you’ll be working out of MD, as it sounds from your message, you’ll want to form the LLC their. Later, when you move to CA or FL, you can either open a new LLC (and close the old), file a Foreign LLC qualification, or domesticate/re-domicile (if allowed). I know MD is a paid with their $300/year fee, but it’s cheaper than getting caught illegally operating in the state. Although your business is digital, you operate within state borders, therefore, transacting business in Maryland. Hope that helps. Let me know if you need anything else.

      • I have to say I really disagree. This article makes it sound like it’s always a good idea to be in your home state, but Lang is a perfect example of why that’s not true. No employees & no sales in the state.

        I agree taxes are not a good reason, but state fee’s and ease of filing and maintaining the company vary widely and can make a big difference in ongoing costs. Also registering in a state is not the same as a whole new incorporation.

        If working under a foreign llc applies to your business, and that is the real question as it doesn’t to all businesses as you noted, then this article misinforms people. Maybe the best of intentions, but it doesn’t make clear who this applies to.

        I have had foreign incorporations and lived worked out of NY and NC, in both cased I didn’t need to ‘create a duplicate’ of my incorporation to be compliant with the state.

        • Hey Kurt, I appreciate your comment and insight. You’re right, this article does need to be expanded to cover more scenarios. However, in Lang’s situation, just because he does not have employees and does not need to collect sales tax, does not be mean he isn’t doing business in his home state. And you’re correct, a Foreign LLC registration does not “duplicate” the LLC, it simply gives it authority to transact in a certain state.

          But you mentioned your concern being about fees and annual fees. In that case, registering out of state, and then later needing to register as a Foreign LLC only increases your fees (filing fees, annual fees, and most likely Commercial Registered Agent fees for the out-of-state LLC). Let me know if I misunderstood, or missed something. I’d also advise digging into the “doing business” statutes of your home state to really get a good overview. I hope this reply has been helpful. Thank again for your comment.

  11. When we were researching the possibility of investing in Tax Liens & Deeds, we were advised to form two LLCs in Wyoming or Nevada even though our home state is Texas. The first LLC will run the business. We were also advised to establish a Qualified Retirement Plan (QRP) & roll our IRA’s & 401k into the QRP. (QRP is similar to a self-directed IRA but we are the plan administrator). Our QRP should be the member/owner of the 2nd LLC. Texas (& possibly AZ) properties and tax liens/deeds will be purchased with the QRP funds by the 2nd LLC & these funds must be returned to QRP upon sale.
    Do you have any advice concerning this plan? Do you still recommend forming both LLCs in our home state?

    • Hi Deana, in this case, if you want the extra asset protection (WY has the advantage over NV), you can form 2 LLCs in WY and then have them own an LLC in Texas. Or form them in WY and Foreign Qualify in Texas. Regarding the setup of the QRP as owner, I’d recommend getting professional help on that one. Seems like there are a lot of nuanced maneuvers that require experience. In short, you’re supposed to either form a domestic LLC in TX (again, can be owned by a WY LLC), or Foreign quality a WY LLC to do business in Texas. Hope that helps.

  12. Hi Matt, Thank you for your prompt reply. So are you suggesting WY for extra asset protection due to the fact that we may invest in tax liens/deeds? If we are only investing in real estate (not tax liens/deeds) in TX do you recommend forming it in our home state of TX instead of WY?

    • Hey Deana, it’s really hard to say and we can’t advise in “black and white”. In short, whichever you are more comfortable with. If you’re investing in TX, you can either form a Texas LLC (owned by you) or you can form a Wyoming LLC (also owned by you), which then in turn owns your Texas LLC. Hope that helps! If you want to speak with an attorney, check out Avvo.

  13. Hi Matt,

    My partners and I are buying real estate in TN for investment purposes. We want to form a LLC; is your recommendation that we should form the LLC in TN, because that’s where we will be “doing business”? Or, because it’s passive income, can we form the LLC in another state with lower annual fees (such as Wyoming), and not have to worry about registering as a foreign LLC?

    • Hi Robert, in this setup, you’re doing business in Tennessee, so that’s the state where you should be forming the LLC. With Real Estate LLCs, forming an LLC in the state where the property is located is the route to go. The income being passive does not matter in this case. You’re still doing business in TN. Hope that helps.

  14. Hi Matt,

    Recently, I have been exploring the possibility of starting a business and veered towards establishing that business as an LLC. The information that you have provided has helped out a lot, thank you so much for getting the information out there, but there are a few other matters that I am unsure about.

    Backstory: I have a YouTube channel that I would like to monetize but won’t do so until I have established a business in connection to the channel. I would like to link affiliate websites that correspond to the topics that I plan to cover in my videos.

    Question 1: If my LLC receives commissions paid from the Corporation that I would be affiliated with is located in another state in the U.S.A., would my LLC owe taxes to that state?

    Question 2: Could my domestic LLC do business with a company located in another state in the U.S.A.?

    Question 3: If I decided to establish my business as a domestic, single-member LLC, how would I find insurance to provide an extra veil of protection for my assets?

    Question 4: If my LLC is established by April 15th 2017, would my LLC be required to file the annual required on May 1st 2017, or would that roll over to May 1st 2018?

    I hope that I didn’t overstep and ask too many questions.

    Kind regards,

    • Hey WT, thanks for the kind words. I’m glad to hear our information has been helpful.

      1) Most likely no, but please check with your accountant. If you need help finding one, take a look at this article. 2) Yes. 3) You’ll need to shop around and make calls to insurance agents. The search term is “general liability business insurance”. 4) Which state is this for? Having asked that, the answer is most likely no. In most states, the first Annual Report is due in the year following the year of formation. Hope that helps! Let me know if you need anything else.

  15. I want to set up an LLC or LLP with my daughter and her two friends. They are a performing group and I manage them. I live in Ohio and they live in California. Can I set up the LLC in Ohio if there will be a K-1 issued to all four of us individually?

    • Hey Denise, it sounds like you’re doing business in both states actually. In that case, if most of the business is being done from Ohio, you can form an LLC in Ohio, and if later, you need to register in California, you can then register your Ohio LLC as a Foreign LLC in California. We recommend working with an accountant after the LLC is formed (helpful article on that here), but yes, your accountant should issue K-1s to the members, file your Partnership Return (Form 1065), and also help each member file personally for federal, state, and local taxes. Hope that helps!

  16. Matt — some good advice here, but I’ve got a unique situation not yet completely covered in this blog. I’m looking to open an onshore IRA LLC (probably in WY at this point). Ultimately, that IRA LLC will invest in an offshore IRA LLC (as well as some USA-based passive investments). I currently live and am a non-citizen resident of Peru (SA, not Indiana). When I leave Peru in a couple of years I’ll probably live in the Caribbean somewhere from where I’ll manage the passive investments. Since I’m required by law to declare a state of residency for income tax purposes I chose California since it was where I lived before moving to Peru. But, like others, I have no desire to cough-up $800/yr in franchise fee. I’m probably stuck with being a CA resident until I establish residency in another state even though I don’t own RE or live there. Any thoughts?

    • Hey Roger, although you are not really operating in a particular state, because you have California as your state of residence, one could argue that you are “doing business” there. I recommend running this question by a few California attorneys though as interpreting the CA statutes regarding “doing business” can be gray. I recommend using Avvo: https://www.avvo.com/business-lawyer/ca.html. Additionally, I recommend speaking with your accountant (or a few accountants) regarding changing your residency to a more tax-friendly state. Apologies I could not be more specific here. There is no black and white answer to this one. Feel free to keep me posted. I’d love to hear what you come up with. Hope that helps a bit.

      • Thanks, Matt. I’m a retired tax accountant and financial consultant but, this is indeed a “gray” area. Changing residencies is not a slam-dunk and generally requires one to actively live in the new state. Many states (particularly CA) take a very dim view of retirees (or any citizen for that matter) just changing addresses to avoid taxes or for other business reasons. I have children that live out-of-state so maybe I should just surrender my CA driver’s license and “move in with them.” I’ll will keep you posted on what the attorneys say.

        • Hey Roger, I completely understand. I think moving in with the kids is a good route to consider. Thanks for the followup!

          • As recommended, I did talk with a few attorneys. Some were more concerned with my unnecessarily complex proposed structure that might bring unwanted attention from the IRS (Form 5498). As you correctly pointed out in other blogs, filing requirements and the definition of “doing business” does vary from state-to-state and is akin to trying to grab a greased pig. Therefore, it would be very wise to consult with a business formation attorney and particularly one that has experience in e-commerce for internet-based businesses. This is NOT something that you want to do on your own unless you have this background. For CA, they have safe-harbor provision in their business code which provides some, but not complete guidance. A lot seems to be predicated on the extent of “entering into repeated and successive transactions within the state” and/or other “activities common to businesses” to determine whether registration is required. If in doubt, get a legal opinion letter or contact the Secretary of State’s office.

            • Hey Roger, thanks for the update. A lot of tax code is intentionally ambiguous and open-ended (open to interpretation). This helps the state collect more tax revenue. The “greased pig” analogy had be cracking up lol! So true.

  17. I am planning on investing in RE in Texas and wanted to set up a LLC there since that is where the money will be made. My CPA has recommended that i register that LLC in my home state of CA as well as Foreign LLC.

    Do i really have to register it in CA?

    • Hey Meg, if you’re buying real estate in Texas, then yes, a Texas LLC is the way to go. Whether or not you really need to register your Texas LLC as a Foreign LLC in California is a bit gray. Your accountant is implying that you are doing business in California, and therefore should also register there. I’d also run this question by a few California attorneys because the statutes around “doing business” in California are open to interpretation. Apologies I can’t be more specific, but this one isn’t very black and white. If you make any progress or get any new information, please keep me updated. I’d love to hear what you come up with. Hope that helps. You can find CA attorneys here: https://www.avvo.com/business-lawyer/ca.html

  18. Hi Matt, Thanks for the information. I own several rental properties in Colorado but I reside in Nebraska. I plan to start an LLC in Colorado as you’re video suggests. However, to one property from liability on another property, should I start an LLC for each property. or, Is there a rule of thumb for number of properties or equity value an LLC should be before starting a second LLC ? Also, do you know if I need to register the LLC in Nebraska as a Foreign LLC?

    • Hi George, you’re correct, Colorado is where the LLCs should be formed. You do not need to register your Colorado LLCs as Foreign LLCs in Nebraska, since you working from home on real estate matters is considered “telecommuting”. I just spoke to the Nebraska Secretary of State’s office to confirm this. How many properties per LLC is an interesting question. I’d say in Colorado, since the filing and annual fees are so low, you tend to see 1 or 2 properties per LLC. Of course you can also put 5 properties in one LLC, but then all of your eggs are in one basket, and this isn’t the best setup from an asset protection standpoint. Having said that, you’ll also need to consider internal logistics and organization. Meaning, managing 12 banks accounts for 12 rental properties can be a little tedious. But then again, it’s often done. In summary, the answer is gray re: how many properties per LLC. I recommend going with whatever makes you feel most comfortable when balancing asset protection and internal organization.

  19. Matt – thanks for the very informative article.
    I’m looking to set up an LLC to hold title to an agricultural development in Panama. Currently residence is Illinois, but anticipate move to Florida. Establishing a FL LLC seems more appealing, but you suggest I’d have to set up a foreign LLC in IL.

    Since LLC will not be doing business in US, let alone IL, is an Illinois LLC required?

    • Hi Mike, you’re welcome! In this case, you would not be doing business in Illinois, so you won’t need to register as a Foreign LLC there. I also recommend speaking with a few accountants and attorneys (both state-side and in Panama) as you may want to look at the pros and cons of a US LLC vs. a Panamanian LLC. Hope that helps.

    • Awesome. Thanks much.
      Have been looking at Panama LLC, but complications of doing business there and potentially expensive local registered agents seem a roadblock. Our IL attorney seems to prefer setting up in IL, no surprise. Guess due diligence takes some diligence – Mike H

      • Hey Mike, thanks for the update. I hear you re: the Panamanian complications. I also recommend speaking with a few attorneys in Florida as well. And yes, due diligence takes some time and some digging. Keep me posted.

  20. Hi Matt,

    Thanks for the great article. I have a question pertaining to my situation. I am a pilot, and I will be moving from Arizona to Florida to work as a contract pilot (will be getting a 1099 from my employer). Many contract pilots form LLCs, and I’m looking to do that as well. What state would you recommend I form it in? While Florida may be my “home state” for the next couple of years, as a contract pilot I am likely to be moving around. Is it possible to still maintain a Florida LLC (for example) even if I take a contract pilot position in say Texas? I am currently an Arizona resident – would it be a viable option to form the LLC in Arizona, and maintain residency here despite having contract work in Florida?

    • Hey Kris, this is a bit gray, but since you’re moving to Florida and will move residency there most likely, I’d lean towards a Florida LLC. You can still take contracts in any state, regardless of where the LLC is formed. I’d also recommend chatting with a few attorneys in both Florida and Arizona to get a few different opinions on your situation. Apologies I could not be more specific.

  21. Hi Matt-I am NY resident looking to invest in out of state properties in PA, so the above states that “But if you are investing in real estate located in another state, it is best to form your LLC there”, thus would mean PA would be the logical choice to set up the LLC. To confirm, I would not pay any double fees in NY my home state in this situation, only PA? And wouldn’t i need a physical address in PA? Thanks in advance for your assistance.

    • Hi Rich, you are correct. Since you are investing in real estate in Pennsylvania, then you are doing business in PA, and you should form a Pennsylvania LLC (or multiple ones as your portfolio grows). You would not need to register the LLC in New York, so no worries about double fees. Yes, in PA you need a Registered Office Address. This needs to be a street address. No PO Boxes. You can use an address you have or hire a Commercial Registered Agent. Note: in PA, the official name for a Commercial Registered Agents is a Commercial Registered Office Provider. They are the same thing though. Hope that helps!

  22. i always work for a company that took care of deducting my income tax and social security now a days i found a job that pays me by invoice and i will have to take care of paying my own taxes social security & state tax. some one suggested i create an LLC my question i am 3 years away from retirement and don’t know if i will be working like this for the next 3 years i does it make sense to create an LLC or make the quarterly estimated payments to the IRS & the state.

    thank you

    • Hi Judith, this is more of a tax-based question, where the answer varies. I recommend speaking with a few accountants. Here’s our recommendation. Apologies I couldn’t be more specific.

  23. Are there any advantages to forming a llc in another state in order to protect intellectual property from creditors.

    • Hi Paul, there may be, but we don’t get into this level of detail. You may want to run this by a few attorneys to see their thoughts. Apologies I could not be more specific here.

  24. I found your article and comments very helpful. I currently have a manuscript that is yet to be formally copyrighted. I Plan to sell the book online only, since it is most beneficial as an ebook. I plan to create a multi members LLC (MMLLC). I currently have personal debt and I will like to make it next near to impossible for a creditor to lay claim to the intellectual property.

    What is your thoughts in regards to creating a MMLLC for holding intellectual property in one of the following: Mexico, Missouri, or Arizona (but not operate or generate revenue). Then have a licensing agreement for a MMLLC in my home state of KY to use the intellectual property. The MMLLC in KY will perform the operating and generate the revenue.

    • I have decided Arizona the best for asset protection, and I do not have to file annual report.

    • Hi Paul, this sounds like a good asset protection plan, but we can’t comment specifically. There are certainly pros and cons to each situation and I’d advise hiring someone (namely an attorney) to help advise you on this.

  25. Hi Matt,

    Want to set up a LLC for an e-commerce business, 2 members both equally invested. We live would work out of different states. What is the best way to determine what state to set it up in. And it being online only, would the other member have to still apply for a foreign entity in their own state?

    • Hi Elaine, if there is more “activity” taking place in one state over the other, then we’d recommend forming there. If not, you can pretty much pick either state you want. Additionally, for questions like this (which fall into somewhat of a “gray area”), we recommend speaking with a few accountants and attorneys as there are likely additional pros and cons, from a legal and tax standpoint, from one state to the other. Either way, whichever state you form in should be the only state filing to worry about. You won’t need to register a Foreign LLC in the “non-filing” state.

  26. Hi Matt,
    Just wanted to thank you for posting this information publicly. I live in Indiana and I had a real estate business a couple of years ago doing some house flipping. I formed my LLC in Delaware based on information I got from a “trainer”. Even then I later realized that I should have filed here in Indy because that is where I was doing business. I have created a new company just doing home repairs and was curious if it would still make sense for tax reasons to file my LLC elsewhere, and you have answered that question. Thanks again! So glad I found this information from you before I essentially created 2 LLC’s when I am just doing business here at home.
    Best wishes,

    • Hi Chris, thank you very much for the lovely comment! I’m very happy to hear you found our information before being led too far down the incorrect path. Best wishes in life and in business!

  27. Hi Matt,

    Thanks so much for clearing up all the hype about “cheap” states. It’s great to know that I should still do out-of-state if my purpose is protecting real estate. However, I want to form the LLC *before* I buy any property. Do ANY states at all allow a P.O. box as the agent address? Or will I absolutely need to hire an agent in that case?

    The pupose of the LLC is privacy, which is why I want the LLC to do the purchase.

    And yes, I realize my name is on the documents, but someone would have to be LOOKING for it, so it private info wouldn’t be easily available to the public in general.

    • You’re very welcome. Glad it has been helpful :) Off the top of my head, the only state that has a PO Box Registered Agent “quirk” is Ohio. But forming an LLC in Ohio and then purchasing property in another state will create the need for Foreign LLC registration. If you want privacy, considering forming a parent company (say, in Wyoming) and then creating Child LLCs (owned by the Wyoming LLC) in each state where you are buying real estate.

  28. Matt,
    I am planning to create an independent mfg’s. rep company with territorial agreements covering New York, New Jersey, Delaware, West VA., Pennsylvania, Ohio, and Arkansas. I live in Wisconsin and would operate the company in WI. I would travel to each of the aforementioned states for business. Must I register as an LLC in each state or register in WI only? Would it be better to create a parent company in WI and setting up child LLC’s in each state? I expect to generate revenue in each of the states mentioned. I do not anticipate employees outside of WI but I do expect to have 1099 contractor relationships.
    Thank you in advance for any clarity you may offer.

    • Hey Stan, great question. In your case, it sounds like there is a chance that you may cross the gray line for the legal definition of “doing business” in some states. However, statutes for this legal definition can vary by state, and you’ll need to speak an attorney (in each state) or two to get their thoughts. Apologies we can’t be more specific here. Having said that, I’d form the LLC in WI, start operations, and then if things get quite active in a particular state, then see if you need a Foreign LLC registration. I’d say a Foreign LLC registration is far easier and less complex than a parent/child company setup in your case. Just having clients in a particular state does not constitute doing business… however, constantly going there and operating out of that state gets more into the territory of doing business. Again, this stuff is gray and I wish we had a more black and white answer for you.

  29. Hi,

    I am looking to setup a new business with my brother. I live in NJ but my brother lives in CA. We are flexible as to who could be the owner of the LLC, as in we are ok with it being just me, just him or both. Of course, being an infant company with no guarantee to sustainable success, our goal for first few years is to save as much $$$ in LLC and taxes as possible. Most actual work for the business would take place in CA but i would be managing operations from NJ behind the scenes.

    Given the above, and provided that CA LLC fee is a massive $800, where should we register our LLC? In california or in NJ?

    Options that we are considering are setting up in NJ but having my brother as an employee or setting in CA and having him as the owner for taxation etc.

    What’s your advice?

    • Hey Ali, this is a tricky question to answer and I’m afraid I can’t be too specific here. There is far too much information to sort out here and there a lot of legal and tax questions… both of which we cannot answer. Based on what you said though, this does sounds like a multi-member LLC that should be setup in California since that is where business activities are legally taking place. We have more details here on what is doing business in California. Regarding the ownership/employee stuff, what you shared sounds complicated. If you both actually own the business, then maybe you should both just own the business. Beyond this, any followups would need to be addressed to an accountant and attorney. Apologies I can’t be more specific, but hopefully that helps a bit.

  30. Just wanted to reassure.

    I’m beginning to start an ecommerce business. I reside in CA but i’m hearing alternatives to ‘save’ on annual fees since CA is so high; others suggested to file in WY.

    Base on your explanation if I were to file an LLC in WY while still living in CA then I would be paying both WY and CA annual fees, tax, etc. due to LLC in WY and foreign LLC in CA. So this is still applicable to ecommerce business I presume?

    If yes, then I would actually be saving money by filing in CA correct?

    Your response is greatly appreciated,

    • Hey John, some people roll the dice and try to get around CA’s taxes and fees, but I don’t recommend it. In short, yes, you are correct on all fronts. It’s cheaper and less risky to just form the LLC in California.

  31. Hi Matt,
    My husband & I are US citizens living and working abroad. We’ve formed the local equivalent of an LLC in Europe and now are considering opening an LLC in the States, primarily at this point so we can keep some US investments that now, due to new regulations or regulations previously loosely enforced, are no longer open to us (such as mutual funds). The fund manager has said we need a US address and says we could move the fund to an LLC. This would not only allow us to keep this investment intended for retirement but also would shield it from “wealth tax” (tax on worldwide assets) in the country where we live.

    We intend to return to the States in 3 to 4 years when I reach Medicare age, but to continue working on a part time basis, so would want an LLC at that point in any case. We have no property in the US at the moment, and are not subject to state income tax (though we of course file Federal returns and Fbar, etc and file returns and pay income tax in the country where we reside). So in our case, where do we base our LLC? And is it difficult/expensive to move it from one state (for instance, Delaware or Wyoming) to the state we will eventually reside in when that time comes? We have not settled on a location.

    Thanks much for any help/advice you can give us!

    • Hi Tammy, this is certainly an outlier and an interesting one, as there are many US citizens in similar situations. Let me start backwards: “Is it difficult/expensive to move an LLC?” There are typically 3 ways to move an LLC: 1) Dissolve current LLC and form in new state, 2) re-domesticate if the incoming state allows, and 3) file a Foreign LLC registration. There isn’t enough room to go into the details and all the pros and cons here, but there are a few (things like cancelling vs. keeping existing bank account + EIN)… having said that, we’re working on an article regarding moving an LLC very soon. Overall though, it’s a bit of a headache and has a number of logistics. It’s not entirely expensive, but it can take some time and the paperwork can be a little tedious.

      Now back to the top: In your case, you can pretty much pick any state you’d like, however, it might be a good idea to pick a state you may likely return to and setup some sort of logistics (difficult to pick, I understand). Yes, there is a chance that you’ll need to move the LLC at a future date, but there is also a chance that you may not need to move it (which would be more guaranteed then say, setting up in Wyoming). There are a lot of ways to cut and chop this one, but as a final tip (and since you’ll need a Registered Agent listed anyway), I recommend hiring Northwest Registered Agent after you pick the state. You can list their name and address as your Registered Agent, but they’ll also let you use their address for other places on the filing too (for example, principal business address, mailing address, and the Organizer’s address)… which can help if you don’t have a reliable long-term address to use in the states.

  32. Hi Matt,

    At present my permanent address is in New York State. I do have property in Delaware which I plan to move into after selling my NY property. This move should take place within the next 6 months or so.

    My question is, should I form my LLC in Delaware and pay NYS the foreign LLC fee for that time or register my LLC in NY and then change to Delaware after I move?


    • Hey Rich, this one is a little gray, so you may want to double-check my answer with an attorney. I would form the LLC in Delaware, since you’ll soon enough be residing there. I wouldn’t worry about the NY registrations as unwinding activity up there will be a pain. Also, “moving an LLC” is quite complicated, so if you can avoid that, I would. Hope that helps.

  33. Hi Matt

    Thank you so much for this information! I was looking at the 2 LLC option as well, being subjected the $800 yearly tax as a CA resident. You made the scenario very clear and understandable. Until your articles, I didn’t realize how much more we are taxed (whole other conversation!).

    So that said I am more inclined to avoid the SMLLC, I’m just one person, as I don’t feel it really protects more than a Sole Proprietorship? In addition, the Schedule R, 586, LLC1, LLC12, 1120S, Excise confirmation, etc, etc. seems like overkill for an apparel drop shipping company.

    I know this is state specific and was wondering if you have insight on “the piercing the veil” I was reading about for CA if you are only one person SMLLC? Not sure an operating agreement makes a difference…

    • Hey Eli, thanks for the nice comment. Regarding Sole Proprietorship vs. LLC, I feel the liability protection is not the same (most others would agree), but you should run this question by a few CA lawyers to get more information. I’d just hire an accountant for all your tax concerns. Just keep your bookkeeping solid. Just make more sales ;) That’s the solution. You mentioned “insight” on piercing the veil, but didn’t ask a specific question, so I’m not sure what you’re looking for. In short, run your entity as a separate entity. Operating Agreement helps. Solid bookkeeping, documentation, and keep business and personal funds separate. Hope that helps.

  34. Hey Matt,

    Excellent video! I know in the video you said you should start your LLC out of the state you live in, but what if I’m moving around every 6 months or so? My girlfriend and I have been running a Cooking Blog for about a year now and we’re looking to start an LLC. We plan on traveling to different states and possibly different countries about every 6 months or so. Would this be a case where starting an LLC in a state like Wyoming would be beneficial or would we want to register as an LLC in each state we move to? I appreciate your insight!

    Thank you,

    • Hey Tony, no, it’s a major pain to “move” your LLC or dissolve and register a new LLC for each state you are in. You are currently a resident of some state. That’s probably the best state to use. Where are you or your girlfriend originally from, where do you work from when in the states (or where will you work from when you return), and where do you pay state taxes? Although Wyoming can work, the state where you are/were residing and pay taxes might be the best.

  35. Great information! I am a full time resident of Colorado. I have an opportunity to do some consulting work in Wyoming. If it goes well I may have another opportunity in Arizona with a possible employee. I will be doing zero work in Colorado. Because of that, I initially thought I would form a Wyoming LLC with later forming a foreign entity in Arizona.

    Am I still correct in my thinking to do it this way or would Colorado ever think I am “doing business” here?

    • Hi John, if you are mostly working from home/CO when not meeting clients, then yes, you’re likely doing business in Colorado. Your situation falls into the gray category regarding what qualifies as “materially doing business” in WY and AZ. Apologies I can’t be more specific here, but I recommend speaking with a few attorneys to get their take on the situation.

  36. Appreciate the video and insight! I am opening an LLC, sole owner and no employees, which therefore means I will be taxed personally, as opposed to the LLC being taxed directly. Therefore, doesn’t it make sense to file my LLC in Nevada, where personal income tax is 0%, as opposed to my home state which is roughly 3.8% – 5.99% depending on the bracket? Even including the foreign LLC fee for my home state, it still appears I will come out on top by filing outside of my home state.

    • You’re welcome Jared. You’ll pay taxes where the money is made. Forming an LLC in Nevada will still require you to file taxes in your home/operating state, so there are essentially zero tax advantages. You can use our “knights of the roundtable” strategy and run this by a few accountants to double-check.

  37. Hi Matt. Can you help me decide where I should open a LLC.
    I’m Canadian and live in Ontario so there are several states I can drive to when setting up my bank account. The reason for the LLC is to open up a trading account in the US. That is the only business I will be doing. I will claim my income with Revenue Canada and will be taxed by them. Are there states that will not tax my capital gains on stock investments?
    I have friends and Family in Michigan, Vermont, Pennsylvania, Ohio, Kentucky, Florida, Arizona and South Carolina.
    Can you help me?

    • Hey Cameron, good call on keeping in close for opening the bank account. Regarding capital gains tax in your situation, I’m not familiar as this is currently outside of my wheelhouse. Apologies I couldn’t be more helpful. Feel free to followup if you gain any insight on the topic :)

  38. Hello Matt,

    First, I’d like to thank you for the insight you provided in this video. I have a small developer business that I opened a single-member LLC for in my home state of Pennsylvania a couple of years back. However, I myself had heard all of the grandiose press and musings about all of the corporations that had set themselves up in DE and how it was supposed to be so amazing and great from a tax and legal perspective. I was actually in the process of setting up calls with people to see about how to move my LLC there so I could feel more like a “Big Fish” LOL. Your emphasis on DE being great for “CORPORATIONS” pretty much convinced me that I’d do myself a favor by not rocking that boat.

    I do have one question thought: Given the nature of my business – largely software and website development – I really don’t have to be physically in any one place. I’m planning to leave home soon and just travel about the states for a bit while continuing to do that work. Is there anything else I’d really have to do or consider as far as my LLC filing or taxes given that I really don’t plan to be anywhere specific for too long for a while?

    • Hi Yardell, thank you for the thoughtful comment! Glad the video was helpful. Although your business is digital, state laws and tax codes haven’t caught up to this growing trend (and they won’t for a while). The short version of the story is that you still need to claim a state of residency and operate your business from somewhere. The easiest way to think of it, is make the business look “stable and stationary” and you go where you please. Since you’re likely residing in PA, file state taxes in PA, and have a home office in PA, that is where you have “substantial presence”, so it’s easiest in your case to keep doing business in PA, even if you have to take a trip or two. The state and the IRS don’t need to know about all your excursions and travels. Just keep doing business in PA if you catch my drift. We don’t get into depth regarding taxes. #1, it’s not our expertise yet; and #2, the sheer amount of variance and nuances across businesses is overwhelming. Your setup sounds fine to me, but make sure you’re working with competent accountant and are staying compliant with federal, state, and local taxes.

  39. I’m sure this has been answered, but here goes. I live in Arizona. I am a member of a crypto currency trading company that operates internationally.
    I am planning to receive payment through my llc. Is there any benefit to creating my llc in Nevada?

    • Hey Rick, great question. This one is tough to answer in a black and white format. I don’t think you need to, however there are more details one could get into. Arizona lawyer Richard Keyt has expanded upon this better than we have. Hope that helps.

  40. I am buying a rental property in NY, but live an Florida. I would like to an llc to be owned by My S corp company i own in FL.What is the best way to structure this?

    • Hi Fernando, I recommend speaking to an accountant to double-check that this is the best setup. Since the new LLC will be a pass-through entity, income/losses/credits/deductions will flow through to your S-Corp before flowing through to your personal tax return, so there may be pros and cons to this setup. Either way, you’ll want to form the LLC in NY since that is where the property is located and that is where you are legally doing business.

  41. I am active duty military. My resident state is WA for tax purposes. I live in NC for duty station. I plan to retire and work as a consultant or gov contractor. My work will likely take place in VA, CO or possibly overseas. I would like to move to CO when I retire so I will be required to become a resident there. I would like to incorporate before I retire. Where should I form my LLC? should I form an Scorp for any reason?

  42. I plan to retire in less than two years. I read the S-Corp article. I think I will have to wait to see how much I’ll make and then decide if I want to set my current LLC as an S-Corp.

    But original question is where should I incorporate?

    • Good call on waiting on the S-Corp. You can always make that election later. Since you’ll be retiring in CO in 2 years or less, I’d form the LLC there.

  43. I am planning to invest on real estate in other states outside my home state, California. Is it appropriate to create an LLC in Nevada, Delaware, or Wyoming and not report to my home state since the money is being made elsewhere like Indiana or Florida?

    • Hey David, since you’ll be doing business in the states where the property is located, you’ll need to register your LLC their. There are a few ways to do that. 1) Form an LLC (likely in your home state) and then register as a Foreign LLC in each state you buy property (this is all technically 1 LLC though). 2) Form an LLC for each state and for each property. 3) Form a holding company (say a Wyoming LLC), then form an LLC in each state you operate. Each LLC will then be owned by the holding company (and not you personally… for better asset protection). Depending on the state, you’ll like need to file a return with the Department of Revenue (or similar body) and apportion the revenue to your home state. But that’s not set in stone and there are a few ways to file. I recommend giving our “knights of the roundtable” strategy a try for your tax question. Hope that helps.

  44. Hello, I moved to Florida and have a construction business operating in Illinois that will remain there. I will not be doing any business in Florida and I will not live in Illinois any part of the year. The manager of the construction business lives in Illinois and handles all the day to day. I would like to have the shares of the construction business LLC owned by my living trust.
    I also have a property currently in a land trust in Illinois which the beneficiary is to be an LLC and I plan to acquire additional real estate in Illinois in the future.
    What would you suggest here? thank you!

    • Hi Steph, can you ask a more specific question? I’m not sure what you need help with. Thanks.

      • Hi Matt, yes of course. What I am wondering which of the following is the best option based on my situation:

        1) Open an LLC in Florida for my business that is operating in Illinois and open an LLC in Illinois for my real estate holdings in IL
        2) Open an LLC in Florida for both my business that is operating in Illinois and for my real estate holdings in IL
        3) Open an LLC in Illinois for both my business that is operating in Illinois and for my real estate holdings in IL
        4) A different option that I am not aware of

        I am a bit confused as where to incorporate due to the fact I live in Florida while having real estate and a construction business in IL

        Does this help at all? I hope I am not complicating things with the way I am asking my question

        Thank you

        • Hey Steph, because the construction business and the investment property constitute doing business in Illinois, you’ll want your LLC to be formed or registered (as a Foreign LLC) in Illinois. Most people tend to live in the state where they do business, but in your situation, that’s not the case, so you really don’t need to form/register any LLCs in Florida. That would make #3 the winner. I’d form 2 Illinois LLCs. One for the real estate and a separate LLC for your construction business. Hope that helps.

  45. Sir- I read your article and was not impressed. It misses so much information about why one would choose one state over another when considering opening an LLC. Your entire article focuses on the “cost” issue ONLY. That is just part of doing business for what you’re really paying for when you choose a certain state to register your LLC…..It is about ASSET PROTECTION!!! You never discussed that area and I have to assume that you may not have sufficient experience in this subject.
    For example, opening an LLC for real estate investing in California is suicidal! It’s know as a state that offers the WEAKEST ASSET PROTECTION in America!
    Please do your research before giving these kind folks insufficient advice. There are many books by attorneys in Asset Protection that you can reference. Pay attention to the ruling in Florida on Single Owner LLCs and “Charging Order” and compare it to the reaction by Nevada, Wyoming and Delaware, for example. That’s the primary reason for those states, especially the first two, being so attractive for LLCs.
    It would be a great service to your readers if you leave out your biasness. Thank you.

    • Lennox, you’re right. This article needs to address more points. At the time I recorded this video and wrote the article I was trying to keep it simple and help the majority of our readers, which are beginners. Getting into parent/child LLCs, foreign LLC registration, and charging order protection can overwhelm people and lead to inaction (and not everyone needs that kind of setup, at least the majority of our readers). But you’re 100% correct, I did fail to mention information. We’ll soon be revamping this entire video + guide due to all the helpful feedback from people like you, so thank you for input and taking the time to leave your thoughts. It’s been challenging to create guides that help every single person for every single use-case. We’re making improvements though and getting better, so thanks again for sharing.

  46. Dude, I searched for some common sense info on how to start a business/best state to LLC and found so much noise until I watched your video; it was clutch. Thanks for turning what could have been a 100 hour wild goose chase into a 7.5 minute video. Rock on!

    • Dude, I love your comment!! Thanks for the kind words and I’m glad we could help you avoid the wild goose chase ;)

  47. Hi Matt,
    Your videos are very easy to understand and follow.
    I plan to start an LLC in Ohio, educational consulting, however, I have a home in Ohio and Florida, and would like to work with schools in both Florida and Ohio.
    What will I need to do to make that happen?

    • Hi Ruth, where do you primarily reside and operate the business from? Based on your comment, I’m guessing it’s Ohio. If that’s the case, I’d form a Domestic LLC in Ohio and operate the business that way (even while working with schools in Florida). Later, if you need to register to do business in Florida, you can register your Ohio LLC as a Foreign LLC in Florida.

  48. Hey Matt, Thanks for all of the great info.

    I run an online/telecoaching business. I have a primary address for an LLC in SD, but all of my work is done via phone or web. Does the physical location that I do the work matter? Like if I am traveling to another state, or even have a secondary residence in another state, does it matter as long as the business is managed and taxes paid in the primary business location state?

    At what point exactly does it become “doing business” in another location that one needs to register another LLC, instead of simply being able to do business procedures there and file through the primary location?

    • Hi Jeann, thanks for the nice comment :) We’ll soon be updating this “best state for LLC” page with more context as we get this question a lot. Rather than thinking about where your customers/clients are, think about what state you primarily run/operate/manage the business FROM. In your case, and especially if you reside there, it sounds like this would be South Dakota. When does it become “doing business”… great question! Unfortunately, most states leave their statues “wide open” and don’t state what doing business is… but rather, what isn’t doing business. This gives them more latitude to enforce rules in their favor, if needed. Let me know if you’re curious about a particular state and I’ll see if I can dig up the statute link for you ;) Hope that helps.

  49. Mark, well i found your website a little to late. I formed an LLC in Wyoming, but will work an internet base business in Colorado. From what i’m reading i’ll have to file a foreign entity in Colorado. Can i form an LLC in Colorado as well?

    thank you,


    • Hi David, there’s a few things you could do. First, you could keep things as-is and wait until the state notifies you of the requirement to file as a Foreign LLC. Although, they do have the right to impose fees/fines for illegally operating. Not likely, but possible. Once you get notice, you could register as a Foreign LLC or dissolve your Wyoming LLC and then file a Domestic LLC in Colorado. Alternatively, you can form a Colorado LLC now and then dissolve the Wyoming LLC. On a positive note, you’ll save some money on the Annual Report. Colorado is cheaper than Wyoming. Hope that helps.

    • Hi David, it’s okay. It happens often lol. Thanks for your comment though!

  50. Question?
    Hi Matt,
    I lived in Texas and ready to launch an online business in Texas. I like to know; Can LLC be converted to C Corp down the load?

    Reason for asking: I have to registered business logo with company name & EIN number.



    • Hey Paul, I’m not sure how the logo + EIN number have to do with converting an LLC to a Corporation. Can you provide more details? Did you obtain an EIN and state your LLC was a Corporation (or something similar)? To answer your question though, yes, a Texas LLC can file a conversion to a Corporation.

  51. Hi Matt,

    Thanks for going through such detail here! I appreciate the video and how active you’ve been throughout the discussions that followed.

    I’ve received conflicting advice from various sources so I wanted to ask for your two cents on the matter.

    I’m currently in CA and am starting to freelance (working from home doing digital marketing consulting for people in other states and other parts of the world). I am moving to CO in the next 6 months and will continue to freelance. If I form the LLC in CA now, when I move to CO, should I a.) open a new LLC (and close the old) or b.) file a Foreign LLC qualification or c.) re-domicile? What are the pros/cons for each of these options?

    Or would it be more beneficial to form the LLC in CO now and register as a Foreign LLC here in CA for the next 6 months that I am here?

    Or is there a secret option 3 that I haven’t been informed of?

    Thank you in advance!

    • Thank you for your thoughtful comment! First, will you be changing residency from CA to CO? In that case, you could likely just form the LLC in Colorado and not worry about the Foreign LLC filing in California. But to do everything Kosher/proper, it’s recommended to form in Colorado, then Foreign register in California. This will be cleaner to “unhinge” from California later.

  52. Hi Matt, thanks for this enlighting article! I’m a Canadian citizen and I live in Canada. I’m planning to start a e-business that will only offer online learning courses. In order to save on taxes, I’m thinking of forming a company in US. In this case, which business structure is more ideal? a LLC or a C-Corp? and in which state to incorporate? Nevada or Wyoming? I’d really appreciate your response. Thank you!

    • Hi JC, I don’t know all the ramifications for Canadians forming US LLCs, but I do know this. When you declare the income in Canada, the Canada Revenue Agency (CRA) will treat your LLC as a Corporation, which will lead to you paying taxes twice (double taxation). You may want to consider another US entity besides an LLC. I recommend speaking with a few Canadian tax lawyers who work on both sides of the border. You also don’t have to limit your options to just Nevada or Wyoming (I’d choose Wyoming over Nevada though)… I’d also consider a state close to where you live in case you want to drive over a few hours and open your US business bank account. Hope that helps! I’d love to hear what you find out and come up with. Feel free to keep me posted.

  53. Wouldn’t it be much less expensive to pay NO state corp income tax than to file 2 registration fees? So if I have an LLC that makes $2MM next year, and pay a 5.5% corp income tax on that, that is $110K.
    I would rather deal with small hassles than write a check for $110K, or am I missing something?
    Thank you,

    • Hi Richard, in your situation, which two states are you deciding between? And where will the LLC be doing business?

  54. I live in california but i am buying a business in nevada. in which state i have to make llc? In future if i buy business in diffrent state then i have to make there too?

    • Hi Gurmit, will you be buying into an existing LLC with other members? Or do you want to form an LLC and then have your LLC buy the new business? Is the new business already setup as an LLC?

  55. Hi Mat! Everything is very helpful here. I want to start a business as an investor. Initially I will be funding my business. I live in CA but the cost is crazy high. I am open to the idea of FL (origin) and AZ for cost/tax purposes. I am open to investing in almost anything/everywhere except real estate (for now). What are your thoughts of if I should pick any state that is not so costly or just start in CA. I don’t plan on living here in about 3-5 year ( I am a nomad)! Thanks in advance!

    • Hey Ja, it would still be best to form the LLC in the state where you reside and operate the LLC from… which in this case is California, but I do hear you on the upcoming move. It’s hard to say in this case as there aren’t “LLC police” monitoring things, but the CA Franchise Tax Board has been known to be strict around this. You could form the LLC in AZ and then if CA sends you letter requesting to register your AZ LLC as a Foreign LLC in CA, you can do that later. They do have the power to impose fines though if they find you illegally transacting business. It’s really tough to say. There’s not a clear black and white answer on this. Apologies I couldn’t be more specific.

  56. I am planning on being a full time rv’er and traveler which means I will not have a “home” state. I will be running a travel business from the road as I travel throughout the US and the world. What are my options? Can I simply buy a plot of land, say that is my business location, and register accordingly?
    Thanks for the help!

    • To add to Glenn’s question, we are in a similar situation. We are U.S. citizens, live overseas, and do not have an address in the states. Our business is internet based and serves clients all over the U.S. My husband does still have a valid Florida drivers license, but that’s just so he can drive when he visits the states. Do we have a “home” state regarding where we should file our LLC?

      • Hi Leah, apologies for the slow reply. Great question. This certainly falls into somewhat of a gray area and I wish I had a clear black and white answer. Although our lives can be flexible with regards to travel and location-independent business models, tax laws haven’t caught up. Who wouldn’t guesses lol. It’s probably best to form the LLC in Florida, but I’d say in your case, you could get away with selecting any state. Hope that helps.

    • Hey Glenn, apologies for the slow reply. I don’t think you’ll need to purchase any land ;) Where do you currently file state taxes? What state is your driver’s license in? Do you reside in any state for the majority of the year?

  57. Hi Matt. I have a residency in GA, but I am a traveling healthcare worker who does most of my work in WA, OR, and AZ. Would you still recommend forming an LLC in my home state of GA?

    • Hi Alex, yes, I’d still recommend forming in your home state. Hope that helps.

  58. Hi Matt,

    My wife and I live in California and we will purchase a rental property in Michigan. It sounds like I set up the domestic LLC in CA, then register a foreign LLC in Michigan (or is it vice versa)? Is that the best way? What about a real estate holding company?

    Thank you for your time.

    • Hi Aaron, you’ll be okay with just forming a domestic LLC in Michigan, since that’s where you’ll be doing business. If you wanted to setup a holding company, Wyoming as the parent LLC is pretty popular among investors. If you get any hassle from CA, you can then register the Michigan LLC as a Foreign LLC there later. Hope that helps.

  59. Thank you for the great article and educational website.

    My question is…I have filed taxes in California my whole life (when I worked). The past 2 years I left my job and backpacked around the world and didn’t file taxes because I had zero income. However, all of my mail is still being sent to my parent’s residence. When filling out applications, I use my parent’s California residence.

    I am starting an online business with manufacturing in China and selling online (Amazon, website). I have contracted a company in Alabama to handle logistics. I will be staying in Asia to manage the business. I do not foresee a permanent residence in the next few years. I will live out of a backpack.

    Do I need a California LLC? Do I need an Alabama LLC? Is there an advantage in setting up an LLC in Wyoming, new Mexico, or Delaware?

    Thanks in Advance!

    • Hi Michael, this falls into the gray zone (as do a lot of “best state” questions), and I really don’t have a clear black and white answer for you. I’ll look more into things and make a few calls if I have time, then follow back up. In the meantime, I’d recommend calling a few attorneys to see what they think is best.

  60. I reside in CT but will be purchasing RE in FL for rental purposes. If I create the FL LLC will CT require Foreign LLC registration? I am looking to do the easiest solution over the cheapest as far as when taxes and revenue is generated. In the long run would FL still be better than CT for an LLC?

    • Hi John, while we can’t say for sure, it is unlikely that CT will ask for a Foreign LLC registration. Because the property is in Florida, that’s where the business will be operating, and therefore, a Florida LLC will be the best route. Hope that helps.

  61. Thanks for the response. I’m looking forward to your findings. In the meantime, I’ll check with an attorney.

    • Thanks Michael, sounds good. Let’s keep each other posted.

  62. I started an online business teaching ESL and American Accent training in Texas as an LLC. I make my own curriculum and teach it online. I moved to California and do not want to move my LLC here as they charge you $900 in taxes if you make money or not! Well I work full-time and this business is very small and so I do not need to make an LLC in California as I work online with anyone who can pay with PayPal. So if there is no “physical business” but rather an online service, Can I just keep my Texas LLC and a physical address there?

    • Hi Sammy, since you’re operating the business from California now, you are supposed to register there. You could either move the LLC, file a Foreign LLC registration, or dissolve the LLC in Texas and then form an LLC in California. Having said all that, since it sounds like you don’t want to do any of that, you can just leave things as they are and continue to operate as is. There is a chance you’ll get a letter from the state requiring you to register in California, but I can’t tell you for sure that will or will not happen. Hope that helps. Apologies for the “gray” answer on this one.

  63. Hey Matt,

    A friend and I are creating a iPhone game. In order to do all the necessary steps for advertising etc. we need a bank account but we don’t want to use our personal accounts. We thought it would be smart to simply form an LLC and open a bank account for the entity. We are not expecting to make much but want to protect ourselves just in case. He is in OH and I am on TN so my question is does it matter which state we set it up in, are there advantages to one or the other since we will not be opening a physical location in either?


    • Hi Ed, will one person be running the business more than the other? If so, chose the state where the majority of the business activity takes place. I know you’ll both be working from home, but that is still “doing business” in the state. If not, then you can pick either state. Hope that helps.

  64. Hi Matt,
    my name is Stavroula. I am a not US resident and am living in Greece, Europe. I have an Amazon FBA business. I want to form a Single-Member LLC this year.
    Is it better to form a LLC in a state with no sales taxes?
    What about income tax sales?
    Thank you in advance.

    • Hi Stavroula, in your case, being a foreigner, you’ll want to speak with a few accountants in order to find the best state for your tax situation. Check out our “knights of the roundtable” strategy as listed in our how to find an accountant guide. Hope that helps.

    • Hi Stavroula.

      Kindly share your research that which state is the best to make LLC for amazon fba while business owner is not a US resident . I am also searching same as living in Australia and looking to setup USA Amazon FBA.

  65. My business is online. I buy wholesale from distributors and manufacturers and sell it on Amazon.
    It was suggested to do an LLC with a state that doesn’t collect sales tax (ie Oregan, Delaware etc)
    Do you see a benefit to this – what are your thoughts?

    • Hi Brian, our team hasn’t fully dove into the research regarding the best state for LLCs which collect (or may need to collect) sales tax and what strategy to follow, so I can’t provide a clear answer at this time. Although you’re business is online, the state where you run and operate from will be the state where you’re legally doing business.

  66. I live in Georgia but I’m from Virginia. I have been doing online selling from my home in Georgia. I plan on opening a store back home in Virginia and I’m confused to what state i should do my LLC in and whether i need a registered agent. I do have family in Virginia so i do have a address to send to. What do you think the best options for me?

    • Hi Shannon, if you’re opening a store in Virginia, then that’s legally where the entity will be doing business, so you should form an LLC in Virginia. And to clarify, all LLCs in Virginia require a Registered Agent. I think you may be referring to a Commercial Registered Agent. A Registered Agent is a person or company who agrees to accept Service of Process (legal/court mail) on behalf of your LLC if it is “served”. You can certainly have a family member be your LLC’s Registered Agent in VA though. Hope that helps.

  67. Hi Matt,

    Thank for your great article.
    I have some question. Hope you will help me with it.

    I am a Vietnam Citizen but now I live in US and I’m a US permanent resident, live in Arizona. I still keep my VietNam Citizen status while I live in US.

    Now I doing E commerce Business. All my business are online base. I don’t have warehouse, don’t have store…
    Can I form an LLC in Nevada by my Viet Nam information ( Passport). After that can I open an US Bank for my LLC also? If yes do I need to provide any information beside that.

    When I do business in Nevada under my LLC do I need to pay for Nevada State Tax and Federal Tax. When I transfer money from my LLC to my supplier over sea do I have to pay Tax or provide any information for US?

    Thank in advance,
    I’m looking forward to hearing from you soon
    Rin Phan

    • Hi Rin, we can’t provide information on taxes, since it varies so much among people and different businesses. We have a guide on how to find an accountant though. You may want to also consider forming the LLC in Arizona instead. If you want to open a bank account for a Nevada LLC, you’ll need to either visit Nevada or call a bank located in both Nevada and Arizona and see if they’ll allow a “cross-branch opening”. They’ll likely want you to visit in-person though, especially not being a citizen yet. Hope that helps.

  68. Good Day Matt,
    I’ve found the information you have provided here and elsewhere very informative, but it doesn’t address our situation specifically.
    My wife and I are US citizens and residents of Virginia. We are at the beginning of a process to acquire improved property in a British Overseas Territory in the Caribbean. For the short term we intend to use this property for vacation (4-5 weeks/year) and rental for the remainder of the weeks each year when we aren’t vacationing there. When we “retire” in a few years, we would plan to live there 9/10 months/year and operate the property as a B&B.
    For a variety of reasons, not the least of which is liability protection, we prefer to form a LLC and have the LLC purchase the property and operate the business use. We’ve checked with an on-island attorney and have found that while a US-based LLC can own property there (provided it is registered there as a foreign company), local law prohibits locally-formed LLCs from owning real property (so that option if off the table).
    Since we will not be operating the business in Virginia, is there any advantage (other than perhaps convenience) to form a VA LLC? If not, should our primary criteria for formation, given our situation, be startup/annual cost, asset protection, or some other factor or combination of factors (and what state or states should we be looking at)?
    Thanks in advance for your response.

    • Hey John, congrats on the upcoming purchase. You’re correct in that Virginia will be an easy setup since you reside there, however, I can’t accurately address your question regarding startup/annual cost vs. asset protection vs. other factors. Your situation is not as straight-forward as most, and you’re dealing with multiple jurisdictions, one being outside of the US. I would recommend running this question by a few real estate attorneys and pooling everyone’s ideas together to find the best approach. Apologies I couldn’t be more specific.

  69. Hi Matt,
    I wish to put real estate properties in three different LLCs (in the three states the properties are located) and have a parent LLC (say in Wyoming or Nevada) hold the 3 child LLCs. How do I do that? I.e. I form the parent LLC. Then I form the 3 child LLC. 1. How do I put the 3 “children” under the parent LLC?
    2. Do you suggest any other state for the parent LLC? (For the purpose of asset protection and privacy)
    3. Any benefit or disadvantage in having the parent LLC in one of the children’s state?

    Thank you for shedding light on this.

    • Hi Annete, for the strongest asset protection in the parent-child LLC relationship for real estate investing, we lean towards Wyoming as the parent. If you go this route, you’ll form the parent WY LLC first and wait for it to be approved. After that, form each of the child LLCs and list the Member as the Wyoming LLC. This will be done a few different ways. If the state’s Articles of Organization has a place for LLC Members, then list the WY LLC. If the Articles of Organization (or similar document) does not ask for LLC Members, then you’ll sign the Articles of Organization as an LLC Organizer (which you’d be doing anyway… a lot of people think an LLC Organizer is automatically an LLC Member… but they are not.) Then sign Statement of LLC Organizer and appoint the WY LLC as Member. Also list the WY LLC as the Member in the Operating Agreement. When you sign the Operating Agreement (and anything else for that matter) for the WY LLC, make sure below your signature it says “My WY Company Name LLC, by Annete LAST NAME, Member”). Also, even if your Articles of Organization does provide room for the LLC Member, it’s still a great and organized paper trail to also sign a Statement of Organizer in addition to the Operating Agreement. Hope that helps.

      • Thank you Matt. This is very helpful. Per your suggestion I formed the parent LLC in WY. Then I formed the child LLC in the other state and included myself and the WY LLC as the two members. This should protect my child LLC? I have another LLC in a 3rd state which was formed before the WY LLC. How do I protect that asset? Also, I don’t have much personal asset. The LLCs are my assets. Hope they’re protected by the parent child LLC formations? Or do I have to do something further?

        • Hi Annette, it’s not usually common to list a parent LLC and yourself as Members of the child LLC. It’s usually just the child LLC, owned by the parent LLC, and the parent LLC is owned by you. Regarding your 3rd LLC (which is already owned by you), you can sell/transfer the LLC to another LLC, but that’s not something we can show you how to do. You’ll need to speak with an attorney. If the 3rd LLC doesn’t have any assets or activity, you could also consider dissolving it and setting up a new “3rd” LLC (if you really want it to be owned by your Wyoming LLC). But then again, if you don’t have any assets or much liability, all of this could be overkill. I’m just painting a few different scenarios for you, but I’d say it’s best to speak with a few attorneys to find the best course of action. Hope that helps.

  70. As of DEC 20th 2017 The State of IL lowered both the upfront cost to open up the LLC – but also lowered the Annual Report Charge from $250 to $75
    My assistant sent the check off for $250 – What recourse do I have to get the $ back – the difference? LLC formed in 2013
    Please advise

    • Hi Chris, I’d call the Secretary of State’s office and ask for a refund. Hope that helps.

  71. I have two synergistic business models: One with an existing LLC and the other that needs to be set up – can the one that needs to be set up use a DBA (assumed name) to get started? ($25 vs $250 online in IL) -or should I pursue a new LLC altogether? First Business Model is a Fiduciary based Investment / Insurance Platform to create, protect and distribute wealth and the 2nd is a Fiduciary Medical and Nutritional (Health and Fitness) Vitality Concierge service for both existing clients of the first business and new ones. Set up new LLC or to save a few $ -open DBA under existing LLC?

    • Hey Chris, if you’re talking about a DBA owned by you, that’d be a Sole Proprietorship, which does not offer liability protection in the event of a lawsuit. And your service sounds like it could have some liability risk. If you’re talking about a DBA owned by your existing LLC, yea, this is a route you could take, but honestly, I feel like it’s such a pain in the neck to reorganize everything when you do get around to forming the LLC, that the headache is not worth the “savings”. If it were me, I’d just form the 2nd LLC and keep things separated. Hope that helps.

  72. Hi Matt…awesome video! Thanks for providing this.

    I live in NC and want to start an LLC just to build an official track record for a stock trading business that I may grow one day. I will have no official employees but may subcontract out work to a couple of friends in other states that will get a 1099 if they receive payment.
    Since I will have no products or sales other than brokerage account investments does it make sense to set up the LLC in NC? Wouldn’t it make more sense to set it up in a NO corporate tax state or no Capital gains tax state? I read that NV doesn’t charge cap gains tax as well.
    Thanks in advance!

    • Hi Pete, this is a good question, and the honest answer is I’m not sure. This enters the gray area. Although it’s all digital, you running the operations from your home in NC could easily be considered “doing business”.

      • Thx Matt! Appreciate the response. Think I’ll take the easy choice and set it up in NC to avoid potential future problems.

  73. Hello!

    I’ve just watched a few of your videos and have a question regarding with state I should register my LLC in or if I should transfer my LLC to a different state because I travel often. My primary source of income requires me to bounce between states every 3-4 years. So, I was wondering if I should transfer my LLC to my gaining state (unknown at this time), register it in my current state (NV), or register it in my state of residency (FL) even though I am not physically there. My business will be operated online and be assessable to all 50 states once I complete all of the legal logistic. Cheers!

    • Hey Edward, I think forming an LLC in the state where you reside (FL) will be the most stable. Then filing a Foreign LLC registration in the states where you move will be the easiest. Hope that helps.

      • Thanks for your response Matt! Another quick question. Would it save me money if were to bounce my LLC between the states where I reside or would this be too much of a headache? I don’t know if I’ll move back to FL after I retire.

        • There isn’t really an easy way to “bounce” an LLC around. The closest to what you’re talking about (that’s the easiest) is Foreign LLC registrations. You’re looking for a “stable base” (the state where to form the Domestic LLC). I hear you that you won’t move back to FL after you retire. You could form the base (the Domestic LLC) in FL, do the Foreign LLC registrations as needed, then after retirement, “move” the Florida LLC to a new state. You can that by shutting down the FL LLC (and it’s correlating Foreign LLC registrations) and then forming a Domestic LLC in the new state or you could re-domesticate, if the incoming state allows it. Hope that helps.

  74. Hi Matt – great stuff. I’m thinking of creating an LLC solely for the purpose of being able to pool together money from several other people in order to invest in a real estate private equity fund that has a minimum investment and the pool will allow us to reach that minimum. All the people that will be part of the LLC live in New York and the real estate private equity fund is primarily based out of New York but also has offices in other states. The fund will invest in real estate properties in several different states. The only “business” my LLC will be doing is being a passive investor in another fund that itself does business in several states. Does it still make sense to create the LLC in New York or should I do any cheap state?

    • Hmmm… interesting question Will. This is walking the gray line of what it means to “do business” in New York. Good old New York is quite strict, so there could be issues (if you end up in court) by forming outside of NY. At the end of the day though, this is a question for an attorney (or a few). The answer is not black and white. Curious to see what you come up with though, so feel free to send an update once you gain more clarity. Thanks for your understanding.

  75. Matt,
    Great articles and references. I want to form an LLC in my home state MI. I will be selling construction equipment as an example. The opportunity will allow me to sell product among a few states of protected territory.
    Will I need to form an LLC in each state I intend to do business?

    • Hi Jeff, thanks for the kind words. “Doing business” is loosely defined in most states, so it’s hard to say for sure whether you’ll be doing business in other states (just based on your initial comment). I’m not sure if you just have customers there or you have a more “substantial presence” in the other state(s). Do you have employees in the other state(s)? An office/storefront? What percentage of your business is done outside of MI and to what context? If you can provide some more details about what you do outside of MI, that would be helpful. Hope my initial reply is helpful.

  76. Hey Matt – Thanks for all the insightful commentary here. I have an event planning business that I started years ago while living in California. I originally formed it as a California LLC. I recently moved to Arizona, but the majority of the events that I plan are still located in California. I do all of the advance planning from my home in Arizona, and then travel to California only for the day of the event. The clients that hire me for California events are sometimes located in California, but sometimes they are located in other states. I don’t have any employees and no physical business address (other than my AZ home). I would prefer to move my LLC state from California to Arizona for the better fee structure, but I’m not sure if California would still consider me to be “doing business in California”, and therefore still force me to pay the $800 annual tax. Any advice on which state CA/AZ to base my LLC in?

    • Hi Matt, you’re very welcome. I’m glad it’s been helpful. I hear you on the desire to move things to Arizona, however, you’re likely still doing business in California. With the bulk of your events in California, the majority of your clients there, and you making repeated transactions in the state, I’d say this is doing business in California. If you shut down the California LLC and formed one in Arizona, there is a chance you could fly under the radar, but it’s quite risky (and not recommended). You’ll likely need to register your Arizona LLC in California as a Foreign LLC (which defeats your initial purpose), and worse, the state as the right to impose fines and penalties, not only against your LLC, but also against you personally. I recommend reading what is doing business in California, where we’ve linked to the relevant state statues. For example, in the California Corporations Code, Section 2259, it states, “Any person who transacts intrastate business on behalf of a foreign corporation which is not authorized to transact such business in this state, knowing that it is not so authorized, is guilty of a misdemeanor punishable by fine of not less than fifty dollars ($50) nor more than six hundred dollars ($600).” Also check out Section 2203: “Any foreign corporation which transacts intrastate business and which does not hold a valid certificate from the Secretary of State may be subject to a penalty of twenty dollars ($20) for each day that unauthorized intrastate business is transacted.” As you see, things can quickly get dicey and expensive. And the above examples are not all-inclusive. I also recommend calling a few attorneys and see what their thoughts are. I hope that helps you get a little closer to clarity.

      • Thanks, that’s helpful. So if I keep the LLC based in California, should I register as a foreign LLC in Arizona?

        • You’re welcome Matt. It’s likely the best setup to form the LLC in California and then register as a Foreign LLC in Arizona since you’re doing business in both states. Hope that helps :)

  77. Hi Matt,
    I have an inquiry. I live in NY but I formed a LLC in NC for a rental property I own in NC. I’m trying to get a EIN# but not sure what address to put as the LLC principal address. Would this be my address in NY? or the registered agent address I put in my LLC application? Also, what county should I select, the NY county where I live or the county my rental property is located? Please advise. Thanks for your help!

    • Hi Maria, in the IRS’s EIN application, #3 Addresses (“Where is the LLC physically located?”), I would use the North Carolina address. At the bottom of this page it will say “Do you have an address different from the above where you want your mail sent?” Select “Yes” then select “Continue”. On the next page (“What is the Mailing Address of the LLC?”) enter your New York address. Then in #4 Details (“Tell us about the LLC”), you’ll enter North Carolina twice (once for “state/territory where LLC is located” and again for “state/territory where articles of organization are, or will be, filed”). The “County where LLC is located” will also be a county located in North Carolina. Hope that helps!

  78. Hi,
    I am not a US citizen and would like to register a service firm ( We provide Industerial Automation Services) in US. Which would be the best state to go with this step. Our client locations are in different states like CA, AL, SC, NC etc.
    We are not dealing with any material trading or any manufacturing activities.
    Please suggest the options from legal point of view.
    Thank you!

    • Hi Harry, sounds like a greet business. We cannot and do not provide opinions from a legal point of view. You may want to speak with an attorney to properly evaluate your situation. I would personally avoid CA and AL if you’re able. If I were in your situation, I’d consider either NC or SC. Hope that helps.

  79. Hi – like so many others before me who have commented, really terrific information Matt. Thank you for all of it and for your diligent replies.

    I am considering using IRA assets to invest as a limited partner in a hedge fund that I am forming. I have been told to move the IRA to a custodian that allows such investment and to also form an LLC which will be funded by and control the IRA assets. The LLC will then invest in and become the LP of the fund.

    I have bounced this off a tax attorney and he advised forming the LLC in Missouri which struck me as odd as I reside in NY and the fund’s physical address is in CT. He suggested Missouri apparently because they have same day formation, the annual filing fee is minimal and there is no annual reporting requirement. On the other hand, he said, NY has a very high formation fee and an onerous publication requirement.

    Your thoughts?

    Thank you!

    • Hi Kash, my gut reaction after reading your message is “this guy’s an amateur” (referring to the tax attorney you spoke to). Recommending Missouri because they have same-day filing is just an absurd point given your situation. He’s also not considering the fact that you may be legally doing business in both Connecticut as well as New York. I don’t feel your setup is a “knock it out quick” kind of filing. You’ll want to speak to a handful of legal and tax experts before making any moves. Hope that helps a bit and best wishes!

  80. Hello,

    I am figuring all this out for the first time and am overwhelmed with information. I believe because I am a contractor, generating business with homeowners for repairs on there homes — paid for most of the time by homeowners insurance companies, working under a licensed home improvement company I could benefit from having a LLC with an election of S corp in another state. From what I’m reading on other sites I may not have to do the foreign qualification since I’m not selling products technically. I think I could benefit from doing this because I would not have to pay any franchise taxes or any other corporate taxes. I may be wrong but, paying another state to file might be worth it in my case because of my companies potential income.

    If my company is making over a certain amount of money per year is there a value in doing the LLC with S corp election in another state with no corporate tax of any kind? The State I live in has no income tax as well so I feel this could really be beneficial.

    • Hey Houston, we can’t comment on your tax situation. You’ll need to speak to an accountant about that. However, it sounds like you’re doing business in your state, so I would not form an LLC (with or without an S-Corp election) in another state since you’re legally doing business in your home state. The comment about “because I’m not selling products” is not the only factor to consider. Your state’s legal definition of “doing business” is far more detailed than just than. Hope that helps and thanks for your understanding.

  81. I would like to form an LLC with the two words in the name where ’’association’’ is the second word. New York City does not allow to register ‘’association’’ in the name unless you are NGO. I’m a resident of New Jersey, but the business will operate in New York. Is making sense to open a company in Delaware or Jersey? Can I operate under that name in NYC?

    • Hey Miki, nope. If you form an LLC in another state and are doing business in New York, you’ll need to register that entity as a Foreign LLC in New York. And when you file that Foreign LLC registration, it’ll be rejected for the same reason.

  82. if I live in New Jersey and open a company in NYC where do I pay taxes?

    • Hey Miki, we can’t comment on your unique tax situation. We recommend speaking with an accountant. Your accountant may likely file in both states, but apportion your income as necessary. Hope that helps and thanks for your understanding.

  83. Hi Matt,
    Thank you for the great insight. I would like to form an LLC with 2 other partners. Two of us are in OR and one is in HI. Does this mean we should form the LLC in OR and a foreign LLC in Hawaii? or does it matter?
    Thank you for your advice,

    • Hey Christian, apologies for the slower reply. It comes down to where there is more substantial business being done. I’d say with the majority of the LLC Members being in Oregon, you should be okay with forming a Domestic LLC in Oregon. If there is a lot of business activity taking place in Hawaii, then it would also be advisable to register your Oregon LLC as a Foreign LLC in Hawaii. You may also want to run this by a few attorneys and get their take on it; some in Oregon, and some in Hawaii. Hope that helps!

  84. Hi Matt,

    Very informative.

    I registered a LLC at NV, and bought a rental there. I live in CA. Do I need to register a foreign LLC in CA?

    Thank you.


    • Hi Lisa, glad to hear! Yes, you should register your Nevada LLC as a Foreign LLC in California (the form is Application to Register a Foreign Limited Liability Company, Form LLC-5). The reason is that California has some of the most strict laws regarding “doing business”. Simply by you taking care of your rental in Nevada from your home in California constitutes doing business in California.

      California has these strict regulations in place, not just in the corporate law, but also in the Revenue and Taxation law. Meaning that, not only can the California Secretary of State require a Foreign LLC registration in California (and has the power to impose fines), but the California Franchise Tax Board can assess fines and penalties for illegally transacting business in the state and not paying the $800 annual franchise tax as well as filing other state-level tax returns.

      On top of that, the CA FTB can require back payment for all years which you did not pay the annual franchise tax (whether or not your Nevada LLC was registered in California). And yes, a California LLC is expensive, but that is the cost of doing business in (rather, living in) California. Hope that helps.

      • Thank you for the reply, and very helpful.

        I forgot to mention that I have an agent who takes care of the property in NV. Does this make any difference?

        Thank you.


  85. Hello! I reside in Virginia, but plan to have my business located in TN. Is it better to set the LLC up in one or the other? I’m assuming that dual filing will be required regardless?


    • Hi Kelly, you could form a Domestic LLC in Virginia and then register as a Foreign LLC in Tennessee, however if you’re going to do business and run the business from Tennessee, you could just form a Domestic LLC in Tennessee. Hope that helps.

  86. Hi Matt,

    Thanks for the informative article.

    My question is what if I’m starting a new business and only rent a home and do not have an office in the state I live? In this scenario I cannot register my LLC in my home state (AZ) as they require a registered address unless I use the home I’m renting.

    I would prefer to not list the house I rent as my official business address as it may not be long term and they do not allow me to set up a PO Box for this purpose. Additionally, I refuse to spend money on an office while I’m starting out, especially to form the LLC in my home state.

    Is this a unique situation where it might make sense to file in say Delaware but then file a Foreign LLC in AZ?

    Thank you again and in advance for any assistance Matt.

    • Hey Travis, you can hire a Commercial Registered Agent, called a Commercial Statutory Agent in Arizona. Not all Registered Agent companies allow this, but the ones we recommend do (Arizona Statutory Agent) – In your LLC’s Articles of Organization, you’ll use their address for your Statutory Agent for Service of Process… and you can also use their address as your LLC’s Principal Address. Any mail they receive for your LLC will be scanned and then uploaded to your online dashboard (and you’ll get an email notification). Hope that helps.

  87. Hi Matt: Amazing site with lots of relevant info and advice.

    My situation is as follows and I need some direction even though I understand your mantra of filing in one’s home state to prevent doubling of effort and fees.

    I am taking over a business that is located and owned by an individual in Arkansas. The member/manager has defaulted on the franchise payments and there are no other members of this Domestic LLC.

    In preparation to take over I acted too quickly and filed Articles of Organization for a Foreign LLC in my home state of New Jersey. I did this knowing that my office in NJ would operate as headquarters whereas the nexus of physical sales currently occur in Arkansas. And from a marketing perspective it reinforced the brand’s namesake to remain a Domestic LLC within the State that the consumer associated with it. But take away all that and you have a BBQ seasoning that is manufactured in Alabama and distributed wherever it is sold which could be Arkansas, New Jersey or any place in the USA.

    I have since discovered that the Franchise Tax Report for Arkansas indicates “incomplete” filings for the last 3 years with another due in May 2018. The status of the LLC is officially listed as “revoked”.

    The listed officer has no intention of paying the delinquent fees prior to my proposed acquisition of the company. I could change the company name, however the real value is conferred in the actual name of the company “Ivan of the Ozarks LLC”. In addition I listed the company name as such when forming the NJ based Foreign LLC.

    I have read that I can file the delinquent annual report/franchise tax and pay past due franchise fees plus penalty and interest to reinstate. I can also edit information to remove the previous member/manager and reflect my involvement. The AR registering agent would remain the same.

    Per Arkansas Secretary of State: “If you do not file your franchise tax report and fees, there is a $25 penalty fee. The secretary of state will charge 10% interest per year on the tax and penalty from the due date until it is paid. The total tax, penalty, and interest for any one year will not be more than twice the tax owed by the corporation.”

    Now I am in a pickle with many questions.

    • Should I ammend my NJ filing from being a Foreign LLC to that of a Domestic LLC using the Ivan of the Ozarks, LLC name as submitted to NJ?

    • Should I file for the dissolution of the Arkansas Domestic LLC filing (and pay associated franchise fees and taxes to do so) and become a fully NJ Domestic LLC?

    • Should I pay related costs to reinstate the company and maintain as an Arkansas Domestic LLC?

    • Should I file for dissolution of NJ Foreign LLC and rectify matters with Arkansas filing to be a Domestic LLC with no NJ filings on record?

    There are so many ways to approach and I want to be make matters better and not worse and do not want to incur any legal ramifications. They all involve cost but it is the long run aspect that I am taking into consideration in conjunction with you advice.

    Thank you in advance!

    • Hey Matt, enjoyed looking through your site. A lot of good info here. I have a question. Looking to set up LLC for start up company with initial target group being Whole Foods, Sprouts, etc. I am currently living in Georgia but plan is to be back in home state of Alabama within a couple years. Should I incorporate business in Georgia and when I move transfer llc to bama or incorporate it as foreign llc? I have family in bama so theoretically I could use their address for business to incorporate initially. Just do not want to cause headaches in future. Am I over thinking this?

      • Hey David, thanks :) No, you’re not overthinking. This is called proper planning. If you know you’ll eventually be doing business in Alabama, then this is an easier setup… since “moving” an LLC is a pain in the rear, it’ll be easier to form a Domestic LLC in Alabama and then register that LLC as a Foreign LLC where you’re also doing business in Georgia. Then after you move, cancel/dissolve your Foreign LLC filing in Georgia. Hope that helps!

    • Hey Mark, you said “I am taking over”, making it sounds like it’s not done yet. So why even buy the Arkansas LLC? Maybe consider just buying the assets the LLC owns. If you’re not working with a competent business lawyer in this transaction there are a HANDFUL of potential pitfalls and liabilities you may be assuming with buying this LLC. If you decide to and are able to just buy the assets of the LLC, then you can cancel your Foreign LLC filing in NJ, form a new LLC, then approach this transaction from a fresh angle and negotiation. As far as your questions, we appreciate you asking us, but there is just far too much going on here for us to even point you in the right direction, besides that of working with a business lawyer. Hope you get to the bottom of things. And thanks for your understanding.

  88. I totally hear you on the complexity of my situation and thank you for providing some basic insights — will sort it out — thanks for replying!

    Great advice!

    • You’re welcome Mark! Thanks again for understanding.

  89. I’m from Europe and non USA resident, want to do only Wholesaling of single-family homes in USA. Being non USA as I understand I can only do it with an LLC.
    So if I open in Wyoming an LLC (because it is cheap), and start wholesaling in Arizona, do I also need to register my Wyoing LLC as a Foreign LLC for Arizona and start paying fees for 2 like you mentioned above? If so then I need to choose only 1 state and focus there. Gota be a good state for wholesalers :D

    • Hey Dala, yes, you’re correct. If you’re doing business in Arizona, then the LLC should either be formed there as a Domestic LLC or formed out of state and then registered there as a Foreign LLC. Hope that helps. Best wishes with the wholesaling biz!

  90. Hi Matt I have real estate properties in florida and have used a family address as the registered agent. The person, whom I nominated as my registered agent no longer lives in the property. It is now a rental. Do I need to change the registered agent. Also does the person who acts as a registered agent have any liabilities.

    • Hi Albert, yes, you’ll need to update/change your LLC’s Registered Agent with the state. The Registered Agent is not liable for actions of the LLC. The Florida Registered Agent requirements are listed in #3 of section 605.0113 of the Florida Statutes. Hope that helps!

  91. Hello,

    First let me say that I love your site, thanks for being a great source for honest advice. I have a unique situation that I was hoping you could help me with. I an going to be setting up an LLC to operate a small marine charter business, 1 vessel, which will do business between two states, Florida in the winter and Washington, DC in the summer. Until January 2018, I was a resident of Maryland where I held property. I currently live aboard my yacht and no longer own property in any state. I am trying to decide which state I should claim as my residency in and as you advise create my LLC in that state. Are there any advantages/disadvantages, from the LLC perspective, of choosing Washington, DC or Florida? Thanks for your assistance.


    • Hey Joe, thanks for the awesome comment! You’re very welcome :) Since we don’t rip apart and compare LLC state statues in great depth (regarding your questions about FL vs DC), I’m not sure. To get that level of granularity, you’ll need to speak with an attorney and/or a tax attorney. However, whichever state you choose as the “base LLC” (the domestic LLC), you’ll need to register that LLC (as a foreign LLC) to do business in the other jurisdiction. And regarding the best choice regarding state residency, that conversation would need to be had with an accountant. Thanks for your understanding and hope that helps!

  92. Hi Matt,

    Great article with lots of information in forming an LLC!

    I was almost ready to set up a WY based LLC to buy a property in NJ, rehab it and resell through this LLC. But after reading your article, I realized, it may not be a wise strategy.

    Therefore, wanted to get your thoughts on why most advice out there is to have out of state LLC, when eventually, its a pass-through entity and taxes would still be hit the individual investor’s filing. Also, that the WY based LLC still needs to register in NJ as Foreign LLC, essentially making work twice. Why NJ RE vehicle LLC is not prefered?

    Appreciate your thoughts in advance.


    • Hey AJ, thank you! There are a lot of companies have a self-interest in promoting certain states. And it’s not that some of these states – like Wyoming – don’t have good laws… I just don’t think a lot of the people who own these sites give a crap about their readers and customers. They don’t property educated them about Foreign LLC registrations and all the details. They seem to always paint a “half picture” (at best). Having said that, Wyoming does have strong asset protection laws in regards to charging order protection, so some investors with more assets may form a Parent LLC in Wyoming and then form an LLC in the property-state, and have the property-state LLC (the Child LLC) owned by the Wyoming LLC. So there is some truth to it. However, you’ll need to weight the benefit of that against the cost and energy in order to rehab and sell one house. And to answer your last question, one of our goals is to inspire the industry to be more transparent. Hopefully we’ll get their with time and patience ;)

      • Thanks Matt for the response! It makes sense and I agree, patience is the key :)

  93. Hello Matt, thanks for all the great information. I am still a little confused on my particular situation and am hoping you can clarify. I am a US citizen, in the process of setting up a career coaching business, so the actual conduct of the business will be accomplished over Skype/Internet to whichever State the individual lives in. I currently live and work overseas and no longer have a state of residence. Recommendations on the best State to set up my LLC? I will be the sole proprietor with no additional employees.

    • Hi Vincent, in this case, where you’re doing business is a bit gray. Doing business is about where you’re working from, not where the clients are. The safest route to take would be to form the LLC in the state you use as your US residency… likely also the state on your driver’s license and the state where you file taxes. Hope that helps.

  94. I am a resident of California and want to create an LLC for international real estate investment purposes.

    Would it be your recommendation to create a CA LLC

    • Hi Wil, I’m not sure where an LLC should be formed for international real estate. That would be a question for a real estate attorney familiar with the country where you’re purchasing. Having said that, if you form an LLC out of country, there is a good chance – due to CA’s strict rules – that that LLC may need to be registered to do business in California. Hope that helps.

  95. Hello Matt, thanks for the page and video great info. I hopen you can help me with something. I am in the Army. I am currently stationed in Germany and when I leave here will be going to where ever the Army says. As you can imagine in the military we move every 3 years. I guess you can say my home of residency or rejection order is Texas since that is where I lived when I joined the military, that is the state I claim my taxes through and have my drivers license in. I do not own any property there and have no relatives living there so I don’t have a physical address there anymore.
    My question is I want to create an LLC for an online ecommerce business and I am not sure what state I should set it up in. I do not know where I am going to live when I retire which won’t be for another 3 to 6 years. Should I set up in Texas or somewhere else given my situation?

    Thanks for you help

    • Hi Jeremy, you’re very welcome. In this case, I would form the LLC in Texas. Make that your “base” LLC. If later, you live in another state for some period of time, you can register your Texas LLC as a Foreign LLC in that state, then withdrawal the Foreign LLC registration when you move. Also, if you don’t have an address in Texas, I recommend hiring Northwest Registered Agent. They’ll serve as your LLC’s Registered Agent and they’ll also let you use their office address throughout the entire Texas LLC registration. Any mail sent to your LLC will be scanned by them and uploaded to your online dashboard. Hope that helps.

    • Matt

      Thank you very much. Yes that helped alot and you are the only one to ever answer me. I have asked atleast 20 to 30 other entities and lawyers and none have ever replied. Thank you..

      • Wow, that’s crazy to hear. However, super happy we were able to help provide some clarity. Best wishes with the business Jeremy!

  96. Hi, I incorporated an LLC in Delaware a few years ago and pay every year some USD550 to dbi for annual tax and filing etc. I’m still overseas and have not made any use of my LLC just paying Delaware tax and agents fees for nothing. I asked dbi to dissolve the LLC and they want about USD1000 all in all. However you say that most states dissolve a company if the tax is not paid. So should I simply stop paying the tax and forget it? Thanks for helping in this.

  97. Hi Matt,

    Thank you for very interesting article and video. I have one thing to be clarified. I’m planning to start single-LLC (CA resident currently) and I’m considering Nevada for it. My business is very small and I have only one customer in the Europe (I’m their subcontractor in the US, working across the US and online). How about that case? My customer is in the Europe and I will invoice them. In that case is not precise where the place of making money is (but financially is Europe). Will it be a good move to setup it in Nevada?

    Thank you.

    • Hi Robert, in this context, the state laws about doing business don’t depend on where your clients are, it depends on where you’re running and operating the business from. Which in your situation, is California so you should form your LLC in California. Further, California has very strict laws (corporate laws + tax laws) about doing business. There are some pretty large penalties involved and if caught, those would be imposed… and in addition, you’d need to register your Nevada LLC as a Foreign LLC in California anyway. Hope that helps.

  98. Hello I do Internet real estate in other states but I live in New York and I do real estate transactions here also I just recently put together a parent holding LLC but I want to do to children LLCs in all the states was New York a bad decision and how do I change that to say like Wyoming or Nevada

    • Hi Stephen, it’s not as black and white as that, however, the holding company being located in Wyoming is more popular (for charging order protection) and then the Wyoming LLC owns the child LLCs, which are formed in the states where the real estate transactions are taking place. In order to change that, it would be easiest to dissolve the NY LLC and then form the new LLCs. Hope that helps.

  99. Hi Matt,

    I thank you for the valuable information you provide in the page. I need your advice. I am non US resident / non US citizen (LIBYAN CITIZEN) willing to form LLC. My questions are:

    Are there any restrictions on certain countries such as Libya to form LLC in US?

    Is it possible to form LLC for two different activities? online business (DROP-SHIPPING, AMAZON, SHOPIFY) & buying goods from US merchants such as online car auctions. OR this basically fits under Online General Trading?

    Am I going to be able to open a bank account without visiting the US, since I can’t travel to the US due The complexity of the visa?

    Your advice highly appreciated.


    • Hi Naeem, you’re very welcome! No, there are no citizenship or residency requirements to forming an LLC in the U.S. Yes, you can group all your business activities under 1 LLC. No, you’ll need to physically be present in order to open an LLC bank account. Hope that helps.

  100. Thank you, Mr. Matt, for the video it is really straight to the point…

  101. Hey Matt,

    Thanks for setting up this site – it’s awesome that you’re providing such a resource for entrepreneurs.

    I’m a US citizen living abroad so I think I may be an outlier in your audience. I saw one other comment in this thread from soon-to-be retirees who want to form an LLC in the US before returning but I’m not sure if it applies to me.

    Right now, I think it may be best to create an LLC in my home state (Illinois) and have a family member as the registered agent. I won’t be doing any business in Illinois – but I figure it’s best to have my bank there since that’s where I’ll be going back to regularly. Would there be any benefit to setting up an LLC in a different state if I still plan to bank in Illinois?

    I consulted another expat entrepreneur and he recommended that I register the LLC in another state (Delaware) and then register in Illinois as a foreign LLC. I think this would be more logistically difficult and I don’t know what benefits would arise from this.

    Any feedback would be greatly appreciated.

    • Hey Nick, thanks for the kind words :) Yea, if you’re going to bank in Illinois, far easier to form an LLC in Illinois then form an LLC in Delaware and then foreign qualify in Illinois. Hope that helps.

  102. Hi Matt,
    Thank you so much for the video. It’s really great.
    I have few rental homes, these homes are in few different states, such as OH, FL, WA, CA. I live in CA.

    Can I just do CA LLC and put all these home in this CA LLC, or do I need to have an LLC for each state where the rental homes are in.


    • Hi Jay, you’re very welcome! We recommend speaking with a business/real estate attorney as well as a tax professional regarding the pros and cons of each setup below. This list is not exhaustive, but here are some ideas:

      1. Form a CA LLC. Then register your CA LLC as a Foreign LLC in FL, OH, and WA. It’s the same entity owning all properties. The Foreign LLC qualification allows the CA LLC to do business in the other states.

      2. Form 4 LLCs, one in each state. Better asset protection than #1.

      3. Form 4 LLCs, however, the FL, OH, and WA LLCs are owned by your CA LLC instead of you. Reason for this is that CA has more strict laws (corporate law and tax law) around “doing business”. Also, properties in FL, OH, and WA could be at risk if CA LLC runs into legal issues.

      4. Form a holding company in a state with stronger asset protection laws (i.e. charging order protection), such as Wyoming. The WY LLC is the Parent LLC. Then form a Child LLC in CA, FL, OH, and WA. All 4 LLCs are owned by the WY LLC. The word Parent/Child aren’t a special type of LLC, it’s just easier to discuss them in this manner. Said another way, the LLC Member (owner) of each of the 4 LLCs is the WY LLC and not you. You are the Member of the WY LLC. This is likely the strongest asset protection option in this list.

      Hope that helps!

  103. Matt,

    Thank you for the information!

    I am wondering if you could answer a question for me. I am starting up a consulting business. I am in a transitional period and living with family in Minnesota, but I also spend quite a bit of time in Florida. Ultimately, I will get a place in Florida and go back and forth between my family’s home in MN and a place in FL, so I will be based in two locations and just work from wherever I happen to be. Do you think it would make sense to set up in both states right away? Or, start with MN and then add FL once I have an address?

    Thank you!


    • Hi Katie, you’re very welcome! I’d say it’s easiest to pick the state where you’ll be most. You can’t just “add” a state to your LLC. For example, if you form an LLC in Minnesota, then want to do business in Florida, you’ll need to file a Foreign LLC registration in Florida which allows the Minnesota LLC to do business there. But you’ll need to maintain 2 LLC filings (note: it’s just 1 LLC though). I would pick the state that you end up making your state of residence. Where you’ll have your driver’s license, car registered, pay state taxes (although FL has not state income tax), etc. To add to that, if you think you’ll eventually make Florida your residence, I’d form there for ease. Hope that helps.

  104. Matt,

    A real estate attorney was recommending that I create an LLC for a condo I purchased that my son is going to be living in (we’ll pretty much only keep it until he’s done with college and then sell it). We don’t really intend to get into the rental business when he’s done with it. Since no money would be coming into the LLC, and any expenses would have to be paid by me personally, is there any reason to do this? It couldn’t function as a true business under these circumstances since no money would be coming in; I was simply trying to give him a place to live without paying rent. Would it be any protection if anything happened at that condo, or should I consider it much as I do my own home? I didn’t form an LLC for my own house to shield myself from any liability that may occur due to someone falling on my stairs, etc., so not sure why I would for this place either.



    • Hi Wes, good question. You don’t have to form an LLC and then transfer the property to the LLC, although you certainly could. It seems the premise here is liability protection. You could either form an LLC or keep it your name and get a good insurance policy, as you do with your personal residence. I should also mention that even a home titled in an LLC should also have an insurance policy. Hope that helps.

  105. Matt –

    I reside in Arizona but I want to remain completely anonymous when setting up my LLC. Is this possible in Arizona or do I need to look at states that provide anonymous LLC’s then file a Foreign LLC in Arizona? It will be an online business selling in 46 states. Your insight is appreciated.

    • Hi Charles, instead of a Domestic/Foreign LLC setup, I would also consider a Parent/Child LLC setup. For example, forming a Domestic LLC in Wyoming that owns a Domestic LLC in Arizona. Hire a filing company (we recommend Northwest Registered Agent) since they will sign as Organizer, be the Registered Agent, and let you use their address throughout the Wyoming LLC Articles of Organization. Then form a Domestic LLC in Arizona that is Member-Managed and the Member (owner) is your Wyoming LLC. This is recommended since Arizona wants either the Manager or Members disclosed. Form the Wyoming LLC first, then the Arizona LLC second. You could also hire Northwest to form the Arizona LLC since they’ll let you use their address throughout the filing, serve as the Statutory Agent, and sign as Organizer. Any mail sent to your LLC will be scanned by them and uploaded to your online account. Hope that helps.

  106. Matt, I am sorry this may have been answered before, 2 questions.

    1. So I live in CA but have a rental house in KY. If I choose to put it under a LLC, do I still need to pay the $800 fees in CA? What are your thoughts on it? Pros and Cons.

    2. I do a lot of trading, mostly options (calls and puts) and I think I can qualify to do it under a business, what are your thoughts? Would LLC be best? And I assume it has to be in CA since I live here. What advantages to do it under a business instead individual?

    Thanks in advance, I loved all you videos. Wish you much success.


    • Hi Maurice, thank you for the kind words :) 1.) Yes, you would still pay the annual fees in California, however, since you’re doing business in Kentucky, you’ll also need to register the LLC there. You can either form a California LLC and then form a Kentucky LLC (owned by the California LLC). And then title the property in the Kentucky LLC name. Or you can form an LLC in California and register it as a Foreign LLC in Kentucky. 2.) Yes, you can set up a California LLC for trading. I’m not sure of the pros and cons as trading is not an industry we’re familiar with. You’ll likely end up paying the same amount in taxes since the LLC – in its default tax classification – will be a pass-through tax entity. However, the pro/con questions could be ran by an attorney and/or accountant. Hope that helps.

  107. Hi Matt,

    I’d like to setup an LLC – to be owned by my IRA.
    I live in Illinois

    I currently have a self-directed type of IRA that owns 10 assets which are essentially real-estate notes or contracts. I have purchased the sellers interest in these contract. All of these contracts are secured by real-estate that is located in Iowa. All these contracts are currently in a regular self-directed IRA.
    My intention is to move these assets into an LLC – and then have my IRA invest in the LLC. This will greatly reduce my annual custodian costs and provide increased flexibility in investing

    In the future I anticipate buying investment property in ILLINOIS, thru this same LLC. (ira)

    Question: Should the LLC be established in Illinois or Iowa.

    After reading your website, I prefer to set it up in IL, because its more straightforward, etc… but wondering if I’ll need to also register it in Iowa because these assets are Iowa-based so to speak.

    Thanks for your help.

    • Hi Gerri, although the contracts/notes are secured by real property in Iowa, you’re not doing business in Iowa, so we don’t see a need to file in Iowa. If you reside in Illinois, do business there, and will purchase real estate there, seems Illinois is the state to go with. Hope that helps.

  108. Hi, I have my 2 rental properties in Las Vegas, NV but I live in California, where do I need to file my LLC? Can I include my husband in my LLC?We are both US citizens. Thank you@

    • Hi Amy, yes, you can include your husband in the LLC (also see qualified joint venture LLC). The corporate laws and tax laws about doing business in California are strict so you may need to form an LLC in California and then register it as a Foreign LLC in Nevada or you may want to form a California LLC and then form a Nevada LLC where the Member (owner) is the California LLC. I recommend running it by a few accountants and attorneys as there isn’t a clear black and white answer. Either way, you’ll need to title the property into the LLC that is either formed in Nevada or qualified as a Foreign LLC to do business there. Hope that helps.

  109. Hi Matt,

    I am not a US citizen. I want to start an LLC in Nevada, using https://physicaladdress.com/pricing/ service which gives me address and registered agent service. I will run my company from my laptop, clients will be mainly from US, but can be from all over the world. Profits from access to my app I want to get through business paypal account. I plan to live in NYC on tourist visa for the next 5 months.

    Please kindly let me know if:

    1. Starting an LLC in Nevada is a good idea in my case ( main reason for picking Nevada is the $400 cost/year and no taxes)

    2. Is living in US on tourist visa, while i run a business is not a problem. I understand I can’t be on a payroll on tourist visa, but as an owner I wouldn’t be.

    3. Is the fact that the LLC is registered in Nevada and I will be residing in NYC is not a problem. On many forums, this included I read that it is best to open LLC where u reside, but I am not creating and selling goods nor hiring employees. My business doesn’t require me to do anything tother that making sure servers are up and responding to emails if costumers have any questions or concerns.

    Thank You for any advice you could provide.

    • Hey Joanna, #3: Since you’re a non-US resident and you’re just here temporarily (and you don’t have an office or employees), you don’t have to form the LLC where you are temporarily visiting. That rule applies to US citizens/residents who are “doing business” where they reside. So you don’t have to form the LLC in New York. However, you may want to consider opening an LLC where you will be since it’ll make opening a bank account a heck of a lot easier. If you form an LLC in Nevada, you’ll need to fly there to open a bank account or register your Nevada LLC as a Foreign LLC in New York. Please check out our bank article for foreigners (opening an LLC bank account in the U.S.) and make a few phone calls to banks before deciding on the state where you form your LLC.

      #2: We’re not sure since we don’t get into the details regarding visas and immigration. We recommend doing more research and/or calling an immigration attorney to check.

      #1: The Nevada state taxes won’t apply. Nevada Corporate taxes only apply to a Corporation (or an LLC taxed as a Corporation). And $350 per year ($150 Nevada LLC Annual List + $200 State Business License renewal) is more expensive when compared to other states’ LLC annual fees. However, I think more importantly (and as mentioned in #3), the ease of opening the LLC bank business account will be more important than comparing annual fees of different states.

      Hope that helps! And let me know if you have any new findings or follow-up questions.

  110. hi , i live in pakistan and want to establish a LLC in US for leather business and crowd funding for new products .please tell me which state would be the best for the complete online virtual business operations in US from my home country Pakistan

  111. Hi Matt, I provide IT services and my home state and the place I am doing most of my business is Ohio, but I also have a few clients and 2 employees in North Carolina. Should I also file for LLC in NC or can I get away (for cheaper) with Just having an LLC in Ohio?

    • Hi Nathan, in this case, you’re doing business in both states. For that reason, it’s best to form an LLC in Ohio and then register your Ohio LLC as a Foreign LLC in North Carolina. Hope that helps!

      • Yes, that’s what I was debating between so this helps a lot! Thanks you so much for your help, and thanks for putting together such a great, in depth, and straightforward website!

        • You’re very welcome :) Thank you for your awesome comment, Nathan!

  112. I have a registered LLC in Pennsylvania. I’m moving to South Carolina, how do I transfer my LLC to my new place of residency?

    • Hi Dennis, there are usually 3 ways to move an LLC:

      1. Dissolve the old LLC and form a new LLC. This is usually the cleanest (record-wise), however, you’ll need a new EIN and new bank account opened in the new state.

      2. File a Foreign LLC qualification (allows existing LLC to do business in the new state). You can use the same EIN and bank account, however, this can be expensive since you’re maintaining 2 LLC filings (note: it’s still one LLC though). You have the cost of the Foreign LLC Registration/Qualification, Registered Agent fees in both states (if applicable), and Annual Reports in both states (if applicable). Note: you may not have these fees in PA though since you may still have an address you can use as the Registered Office and PA LLC don’t have Annual Reports.

      3. Redomesticate (sometimes called “conversion” or merger”) old LLC from current jurisdiction (old state) to new jurisdiction (new state). You can keep the EIN and the bank account, but the filing may be more complicated.

      However, South Carolina doesn’t allow for redomestication of LLCs (only Corporations), so you’ll need to choose option #1 or #2 above.

      HOWEVERSenate Bill 189 (see “Section 33-43-1013”) is working its way into law and if passed, this will amend the South Carolina LLC Act and allow domestication of out-of-state LLCs. So if you are not in a rush, you may be able to exercise option #3 at some point in the near future.

  113. Hi Matt, my husband and I wish to create an LLC in either Oregon or Washington state (we maintain two houses and travel frequently between these two states). Besides annual fees/initial filing where WA probably edges out a little, we would like to know the tax advantage comparison between these two states. WA has the notorious B&O tax with sales tax, and OR has state income tax though no sales tax. Business is mainly online business. Can we get some advice from you? Also, will forming an S-corp or C-corp help with benefiting tax purpose?

    • Hi Linda, we don’t get as deep into taxes as LLC formation, so this is a conversation that you’ll need to have with an accountant regarding Oregon LLC vs Washington LLC. It’s likely that an LLC taxed as a C-Corp won’t offer tax advantages, but an LLC taxed as an S-Corp will offer tax savings on self-employment tax, but that’ll really only be worth it once the LLC’s net income can justify the added expenses (like accounting + payroll). Also, if the LLC is formed in Washington, check out our article on the qualified joint venture LLC (for husband + wife LLCs in community property states) where the LLC can elect taxation as a Sole Proprietorship instead of a Partnership. Hope that helps!

  114. Hi Matt,
    Thanks for the great info. We are looking for anonymity and registering in a state that does not fully disclose the ownership structure. In this case, is Wyoming a better option to form a LLC, given this primary motivation?

    • Hi Lisa, Wyoming will work for this, as well as a handful of other states. You just need to review the Articles of Organization (or equivalent document) and Annual Report filings to see if Members need to be disclosed. However, you’ll need to take it a step further and consider a Parent/Child LLC setup. For example, forming an LLC in Wyoming and then that LLC owns an LLC formed in the state where you reside or are doing business. This offers privacy, stronger liability protection, and takes care of having the LLC registered where you’re doing business. You’ll also need to consider – for privacy reasons – which addresses need to be listed in both the Parent LLC and the Child LLC (Registered Agent address, main/principal address, mailing address, etc.) as well as how the Articles of Organization (or equivalent document) is signed by the LLC Organizer. If you want to use a filing company and a registered agent for privacy, we recommend using Northwest Registered Agent ($39 + state fee). Their packages are built for privacy: they’ll sign as the Organizer, serve as the Registered Agent, and they’ll allow you to use their office address throughout your LLC filing. Any mail that is sent to your LLC will be scanned by them and uploaded to your online account. Hope that helps! Let me know if you have any follow-up questions.

      • Our primary concern is also privacy – Florida appears to make quite a bit of information public record where it appears Wyoming may not… The businesses money will be made in FL but we have considered WY and other states for privacy reasons…

        Sounds like we are on the right track with registering domestically in WY and as a foreign entity in FL. We would use a registered agent in WY because we don’t reside there as well as a registered agent in FL on behalf of the WY LLC.

        After reading through comments, I wonder, is it possible to register domestically in FL using a registered agent and still maintain anonymity?

        Thanks in advance and for this resource.

        • Hi Josh, you could form a Domestic LLC in Wyoming and then register as a Foreign LLC in Florida. You could also form a Wyoming LLC and then form a Florida LLC that is owned by the Wyoming LLC (Parent/Child LLC). Another thing to note, the Cover Letter (for both Domestic and Foreign LLC filings in Florida) is not required. Double-check this, but you can likely get the anonymity you’re looking for in Florida with just a Domestic LLC filing. Hire a filing company (so they sign as Organizer). Hire a Commercial Registered Agent. List the Manager as one of your other LLCs (or another business entity). Make sure to hire someone to file your Annual Report each year too, since those are made publicly available on the Sunbiz entity search. Northwest Registered Agent can take care of all the above. Regardless of who you hire to form your LLC, make sure you get a Resolution or Statement of Organizer. This shows the Organizer stepping down and appointing the Members (or Managers). That along with your Operating Agreement will prove ownership. Hope that helps!

  115. Hi Matt,

    (great website!)

    Question: Can I obtain an EIN without having an SSN?

    I am a non-US citizen and a non-US resident, and planning to form an LLC for my US business. As I don’t need a physical presence in the US for my operations there I understand that I can select any state for the LLC. But to open a bank account and I do need an EIN. But is it correct that I require an SSN for that (which I have not) ?

    Thanks, Johan

    • Hey Johan, correct, as a non-US resident you can pick any state you’d like. However, if you’re visiting the U.S. to open an LLC bank account, you’ll want to consider a state that is easy for you to travel to. Please see our article on opening a bank account: non-US resident opening a U.S. bank account for LLC.

      As for a social security number (SSN), you don’t need one in order to get an EIN for your LLC. We have instructions here: how to get EIN without SSN. Make sure to only apply for an EIN after your LLC is approved.

      As for not needing any physical presence in the U.S., that is partially correct. You don’t need to be physically present, however, you will still need a Registered Agent address and a main/principal office address as well as a mailing address sometimes (note: they can all be the same U.S. address). The Registered Agent will usually serve as your LLC’s main point of contact with the Secretary of State. If you need to hire a Registered Agent, we recommend Northwest Registered Agent ($125 per year). They’ll serve as your LLC’s Registered Agent and they allow you to use their office address throughout your LLC filing. Any mail that is sent to your LLC will be scanned by them and uploaded to your online account. Hope that helps!

  116. Currently, I live in MD but in December I will move to PA and live there permanently. I conduct online business there not selling or collecting taxes there. I want to register LLC in PA but don’t want to file for out-of-state LLC in MD and pay double fees. What are my best options? Thank you.

    • Hi John, instead of forming an LLC in Maryland and then later filing as a Foreign LLC in Pennsylvania or filing a conversion/domestication (converting a Maryland LLC to a Pennsylvania LLC), you should be fine just forming the LLC in Pennsylvania now since you’ll be moving there soon. Hope that helps. Let me know if you have any follow-up questions.

  117. i read the article and i totally understand that i have to form a LLC in the state i live in . before reading the article i was thinking to register in NM because the names of the owners and officers are not public . how do i for an Nevada LLC and hide the names of LLC officers/managers ? because they are public in Nevada . can i form a NM LLC to be the officer of the NV LLC? . would that be a problem when obtaining EIN or opening a bank account . if not what is the best set up to hide the officers/ managers name in Nevada ? thank you

    • Hey Khaled, if you reside or do business in Nevada, then yes, a setup where your New Mexico LLC is the LLC Manager for your Nevada LLC will work well. Check out my reply to Lisa (it’s a few up from this) – it goes over things to consider when privacy is your aim. You shouldn’t have issues opening an LLC bank account since your Nevada LLC’s Operating Agreement will show the New Mexico LLC as the Manager, but you as the Member (I just emailed you a manager-managed Operating Agreement template). And if the bank is curious as to who owns the New Mexico LLC, just bring your New Mexico LLC’s Operating Agreement. You could also have your New Mexico LLC own your Nevada LLC (instead of just being the Manager). Either way, since both entities are separate legal entities, they should each have their own bank account and EIN Number. Hope that helps!

  118. Hi Matt,

    I live in AZ but am forming an LLC with a business partner that lives in CO. Does it matter which state we form the LLC in? Also, if I form in AZ and move out of the state, will I have to re-file in my new home state down the road?


    • Hi Lindsay, will you guys have an office or employees located in one of those states? If so, that’ll be the state to go with since that’s where you’re doing business. If not, either state could work. Depending on the outgoing and incoming states, there are usually 3 ways to “move” an LLC:

      1. Dissolve your Arizona LLC and form a new LLC in the new state. This is usually the cleanest (record-wise), however, you’ll need a new EIN and new bank account opened in the new state. It’s kind of like starting a new business.

      2. File a Foreign LLC qualification (this allows your Arizona LLC to do business in the new state). You can use the same EIN and bank account, however, this can be expensive since you’re maintaining 2 LLC filings (note: it’s still one LLC though). You have the cost of the Foreign LLC Registration/Qualification, Registered Agent fees (if applicable), and Annual Reports (if applicable).

      3. Redomesticate (sometimes called a “conversion” or merger”) the Arizona LLC to a new jurisdiction (new state). You can keep the EIN and the bank account, but the filing can be more complex. If allowed, this is usually a solid option for maintaining business activities without having to follow Option 1 (dissolving and forming a new LLC).

      You may also want to consider forming the LLC in the state you are soon moving to. Hope that helps.

  119. Matt, thanks so much for the good information. I am starting an online professional development business – I create content and my friend is an instructional designer. I live in MN and she lives in NC. From some of your replies to earlier questions here it seems we can file in either state… other than MN has no annual fee and NC’s annual fee is $200 do you know of any reason why one state would be more beneficial than the other? Also would we have to set up a foreign LLC for the other state? (We plan to sell online courses throughout the US.) Last question, would it make best sense since we are both heavily involved in creation and living in two different states for us to use a company like Northwest Registered Agent? I hope you can reply… I am very impressed with you and your colleague’s level of knowledge and willingness to share it with others!

    • Hey Tirzah, thank you for the kind words! If one of you would like to be the Registered Agent for the LLC, then you don’t have to hire a Commercial Registered Agent. The benefit of doing so would be if you’d like to keep your address off of public record. Northwest Registered Agent will allow you to use their address as your Registered Agent address, principal office address, Member’s address, Organizer’s address, etc. You don’t have to though, so it’s personal preference. In your situation, you’re correct, you can pick either state. It might be a good idea to speak to an accountant to see if there are any tax considerations. Hope that helps and thanks again :)

  120. Very informative video Matt, thank you! I do have one question regarding forming an S Corp or LLC in Colorado but having a headquarter address in Boston. I live in Colorado and my business partner lives in MA, we are thinking of renting a WeWork office space in Boston, but we are an employment staffing firm and do all of our work over the phone and all over the country. If we incorporate in Colorado, do we have to register as a foreign entity in MA if we rent office space in Boston?


  121. Hi,

    I though i submitted a question yesterday but I don’t see it so I’m posting again!

    you mentioned that for RE Investments, it makes more sense to register at the state your investment property is located in. However, you will still need to register at your local state as Foreign LLC. So how is RE investment related LLC different from any other LLC where you say registering at your local state is cheaper? Thank you.

    • I have the same question as Michinori. Any additional insights are appreciated!

      BTW, thoroughly enjoyed reading through the various articles on this site. You are amazing and please keep up the great work!

      • Hey Tim, thanks so much! I just replied to Michinori. Please see above. Thanks.

    • Hi Michinori, unless you’re in California, most people don’t need to register their LLC as a Foreign LLC in their local state. It’s just a Domestic LLC in the property state. Hope that helps.

  122. Hi Matt,

    I appreciate the advice and insight I’ve been reading! I would like to rephrase/clarify a scenario that you have addressed. My husband and I are starting a real estate property investors company in New York State. We have been advised to establish an LLC in Wyoming as our holding company and establish a NY LLC for each rental property purchased/operated in NY. My question is related to how this impacts taxes, fee, reports and filing for the holding company. Would we have to register the holding company as a Foreign LLC that you have mentioned? Are there any tax implications related to spouses from one state to the other?

    Thank you for your help!

    • Hey Denise, the Parent/Child setup you’re referring to is quite common among real estate investors. I’m a fan of this setup. It’s a Domestic Wyoming LLC that owns multiple “Child” LLCs in the state(s) where the property(ies) is/are located.

      From a federal tax perspective, it all “flows up”. Meaning, the Child LLCs are “disregarded” and are taxed as a branch/division of the Parent Wyoming LLC. Then your Wyoming LLC will be taxed as a Partnership by default (unless you elect S-Corp treatment; a good idea after net income is closer to 6 figures). So the parent Wyoming LLC is the one that files a 1065 Partnership Return and issues K-1s to you and your husband.

      Regarding state and local taxes, you’ll want to dive into those with a New York accountant. We have some tips on finding an accountant here: how to find an accountant for your LLC. I do know there is a $25 “Partnership, LLC, and LLP Annual Filing Fee” due to the New York Department of Taxation. I believe this would apply to all child LLCs, but not 100% sure; so again, please check with a local tax professional (and feel free to share any findings). Note, the $25 tax is in addition to the Biennial Statements that are due for each LLC (every 2 years). A lot of info, I know ;) Hope that helps!

      Oh, and p.s., the Wyoming LLC doesn’t need to register as a Foreign LLC in New York since holding Child companies is not considered “doing business”.

  123. Hello Matt,

    I’m starting a real estate investment company in Georgia but will be moving to the state of Washington within one year and intend to continue the business there. My question is, can I start a business in GA and move it, that is register it, in Washington as the same business? I wonder this because I intend to build business credit and would not want to start fresh with a new EIN later on, but I do not want to have to have a foreign qualification for the remainder of the time for fee saving purposes.

    • Hey Angelica, “moving” an LLC can be a real pain. If you’re certain you’re moving to Washington and will continue the business there, it’ll be easier to just form the LLC in Washington from the start.

  124. Thank you so much for this article! I’ve been asking some of these questions for months. But, a lot of information I’ve been finding wasn’t always clear. Adding this to my bookmarks so I can refer back to it frequently. Thanks again!

    • Hey Amber, you’re very welcome! Glad we were able to help clarify a few things :)

  125. Great information. Thank you for opening my eyes to the difference in Corporations and LLCs. My question is if I currently have a company in Kentucky and will soon be moving to Tennessee, which state do I form an LLC? Do I form an S Corp?


    • Hi Steve, you’re welcome. Do you have an existing entity or are you running this current business as a Sole Proprietorship in Kentucky? If it’s a Sole Proprietorship and you’re going to move to Tennessee and operate your new business there, it’ll be easier to form an LLC in Tennessee. If you have an existing LLC in Kentucky, do you want to keep the existing bank account and EIN? If so, you can file a Foreign LLC registration in Tennessee. If not, you can dissolve the old Kentucky LLC and form a new Tennessee LLC. You can’t “form” an S-Corp. An S-Corp is a tax election made with the IRS that “sits on top of” either an LLC or a Corporation. We recommend an S-Corp election once annual net income is about $70,000 to $100,000. We have more info on S-Corps here: LLC taxed as S-Corporation. Hope that helps!

  126. Hi Matt!
    I haven’t seen my question covered here, so here goes:
    I am a couple of friends are forming an LLC for a mobile vehicle detailing service. I live in Tn, but my friends live in Vt, Va and Ohio. While much of the business will be done in TN, as it is mobile, some will also be done transiently between Florida and Virgina (targets of opportunity while we are travelling).

    My questions are:
    As a mobile business, do I need to register Foriegn LLCs in each state that it is possible for me to work in, or is there some sort of business threshold? As an example, I will often be in an area along the Tn/NC border. In a week, I might be in TN 4 days and NC 1 or not at all.

    Have you seen this before?

    Looking forward to your thoughts –

    Thank you,

    • Hey Shawn, if most of the business is done in Tennessee and your “mostly responsible” for things, I’d consider forming an LLC in Tennessee. There is not a real clear threshold regarding what is doing business. If you’re just popping in and out of North Carolina, you may not need to register as a Foreign LLC there. However, if you being to do a lot of work in Virginia, Ohio, and other states, you’ll likely need to register as a Foreign LLC in those states. Hope that helps.

  127. We live in Washington, but have a rental property in Idaho. I created an LLC in Washington, thinking it was best to create a Foreign LLC in Idaho. Idaho requires a Registered Agent in Idaho. The property is fully paid for, and we have not yet transferred the title to the LLC. Since I’ve already created the Washington LLC, is it best to move ahead with the Idaho Foreign LLC with Idaho Registered Agent, or should I consider just creating an LLC in Idaho for the property?

    • Hi Colleen, if you’re concerned about costs, it’ll be cheaper to just form a Domestic LLC in Idaho then transfer title to that LLC. You’ll still need an Idaho Registered Agent though, regardless of whether it’s a Domestic or Foreign LLC. However, you or someone you know can serve as the Idaho LLC’s Registered Agent. If that’s the route you end up choosing, you can then dissolve the Washington State LLC if it’s no longer needed. Hope that helps.

  128. Hi, Matt! I am surprised you’ve been able to answer these questions since 2016! I am doing a video production service while active-duty military. Should get my business license here and form my LLC in California? I am moving in a year. Thanks!

    • Hey Mike! Thanks man! It’s been thousands of questions :) I’m not sure what you mean by “here”. Where are you a state resident and where do you pay taxes? Where are you moving to? Where will business activity take place? Any employees? Store front? We have some helpful info for you here: best state to form an LLC if you’re in the military. Hope that helps.

  129. Hi Matt,

    My sister and I live in CT and RI and jointly own a condo in Florida that we will be renting out. Since the property is in Fl, am I correct in assuming that the LLC should be formed in Florida? Even tho all business will be conducted thru me in RI

    • Hi Mike, that is mostly correct. It’s a bit of a gray zone. To be more thorough, you may want to consider forming an LLC in Rhode Island and then registering as a Foreign LLC in Florida. Hope that helps.

  130. Hi Matt,
    thanks for your great work and help! I’m planning to purchase up to 10 properties in Florida and would like to have those under a LLC. But I also plan to provide Property Management Services. However, the Property Management will do Business in California, because I reside in California. Where would you recommend to have the Foreign LLC, in Florida or in California? Or could one of them also be the parent LLC? Basically, it should be a LLC providing multiple Real Estate Services like renovation of the purchased properties in Florida (possibly reselling or turning them into short-term vacation rentals) and providing Property Management Services for other property owners in California (because I live there).

    • Hi Nancy, you’re welcome! There are a number of ways to set this up. If all were ran under 1 LLC, it might be a bit easier to form the Domestic LLC in California (where you reside) and then register as a Foreign LLC in Florida. You could also form a Domestic CA LLC that owns a Domestic FL LLC too. And there are even additional ways to structure things. However, you’d really want someone to do a deep-dive with you. We recommend speaking with a few accountants and/or attorneys to weigh the pros and cons. Hope that helps.

  131. I live in California. I got some bad advice and made the mistake of registering my LLC in Utah back in June. Then I realized that I also needed to register in California as a Foreign Entity, since I needed a sellers permit for wholesale purchases. I’ve already paid the $800 LLC tax for my first 4 months. I’m considering domesticating the LLC to California and dropping the Utah LLC. Is there a best time of the year to do it? If I do it now, does it generate another $800 LLC tax in 4 months?

    • Hi Robert, at least you caught the issue early on. I’m not sure about how the timing of the domesticating affects the $800 franchise tax. We recommend speaking with the Franchise Tax Board for clarification.

  132. Hi Matt,

    I am a Canadian working in the US under TN visa and planning to form an LLC. I have a volunteer to manage it so I will not work in it. Can you please advice on where I can form it and do I need a physical address?
    If I leave the country (US) can I manage my LLC while outside the US e.g in Canada

    Thank you

    • Hi Ali, while yes, you can manage your US LLC while not in the US, we recommend speaking with a few tax professionals first. From what we understand, Canadians that form an LLC in the US face a form of “double taxation”. Meaning, you’ll have tax obligations to both the Canada Revenue Agency (CRA) and the Internal Revenue Service (IRS). I believe there may be other legal entities or setups which are more ideal for Canadians who want to do business in the US. It’s not an area we deal with a lot, so if you’d like, we’d be very happy to hear about any of your findings. Thanks.

  133. My wife is and independent contractor in the healthcare field. We live in Ohio and she has a home-office but the clients she sees all live in Michigan. Would our home state of Ohio still be best to start and LLC?
    Thank you,

    • Hi Mike, you’ll want to follow-up on this with an attorney, but it sounds like your wife would be doing business in both states. With the home-office, she’ll be doing business in your home state of Ohio. And with repeated transactions taking place in Michigan, she’ll be doing business in Michigan. You may want to consider forming an LLC in Ohio and then registering your Ohio LLC as a Foreign LLC in Michigan. Hope that helps :)

      • Do you have any recommendations for LLC attorneys in the Northwest Ohio area?

        • Hi Mike, we don’t have specific recommendations, however you can checkout Avvo. We recommend calling a few people and running the same set of questions by them. This will help you get a feel for each person and see if you’re getting similar information. Hope that helps.

  134. Hi Matt,

    First of all thank you very much for all your information and insights in the article, they came very handy.

    I have a couple of questions since my situation might be exceptional.

    I am a non-US resident from Spain living and working in PA with a VISA and work permit in place who wants to start an LLC.

    The business is going to be an online photography website based on one hand in selling videos/tutorials online worldwide and on the other hand I will be doing photography workshops in different US States and different countries in the world.

    1)As a non US-citizen I heard that I might not have to pay any income tax for the earnings coming from the LLC. Is that correct or just partially correct as all my earnings should be taxed according to my home state?

    2)The workshops would cover over 8 States. Do I need to do a Foreign LLC registration in any of the States where I want to operate even if it is for a week a year?

    3)If I decided just to do international workshops out of the US with no employees/office/service in my home state; Do you consider it would be reasonable to incorporate my LLC in one of the “Foreign friendly states” Like DE o WY ?

    Thanks in advance for your help, much appreciated!


    • Hi Dan, you’re very welcome. 1) It depends on the details of how and where the income is made, but you’ll need to speak with an accountant. 2) Likely no since they are isolated transactions. 3) That is a reasonable idea. You’ll also want to consider opening a bank account as a foreigner. Meaning, traveling to Delaware may be easier than traveling to Wyoming. We have more info here: non-US resident LLC bank account. Hope that helps.

      • Hi Matt,

        Thanks very much for your reply, things are much clearer now.

        Just one last question: For this type of queries such as LLC formation, best incorporation state according to my needs and future taxation: Do you suggest
        speaking with a lawyer & an accountant or just with an accountant?

        Delaware is just 30 miles from where I live so it would be more convenient than WY in case that’s the best choice.

        Thanks again for the invaluable information and help you provide with LLC University.


        • You’re welcome Dan! Both. And multiple. Meaning, make a list of your top 5-10 questions. And speak with multiple accountants and attorneys. We like to call this the “knights of the roundtable” strategy. Some accountants and attorneys are far more knowledgable than others. You want to speak with multiple people to form a consensus. Then though those multiples conversations, you’ll intuitively lean towards one accountant/attorney. Then if you can meet them in person (or Skype video), that’s even better. You’ve found a great match. Thank you for the kind words man. That means a lot!

          • Thanks to you Matt for your priceless help!

            I will follow your advice and once I have a clear roadmap I will share it with you so we can help other colleagues who might find themselves in the same situation.


  135. Hi,
    I am trying to form an LLC for a summer camp. The owners live in the state of TN and do all planning and preparation from home, but the camps are held in TX every year. Do we need to create an LLC in Texas, Tennessee, or both?

    • Hi Ora, they are certainly doing business in Texas. As to whether or not they are transacting business in Tennessee, we can’t say. It sounds like they are doing business in Tennessee, but that may be a better conversation to have with an attorney. Tennessee, and most states, usually don’t specifically define what is “transacting business”, however, they tell you what’s not transacting business. You’ll need to look at section 48-25-101 of the Tennessee Code for that. Also, if it’s important, a TX domestic LLC is $300 and foreign registration is $750; a TN domestic LLC as well as a foreign registration is $300. Meaning, it’s more affordable to form an LLC in Texas and then register the entity as a foreign LLC in Tennessee if they are transacting business there. Hope that helps.

  136. Hi Matt,

    We just purchased our first real estate property in Michigan. We live in Colorado. We formed an LLC in the state of Michigan. Do we have to register our LLC as a foreign entity in CO? We were told to do so in order to open a business bank account for our LLC. Also, our personal CO address is the address for the LLC – I think it should be the address of our registered agent’s company in MI. Is this correct? Is it complicated to change the address? We didn’t form a holding company In Wyoming, but are thinking to do this in the future. Is it better to do this sooner rather than later? Will we pay additional fees for that? (doing it after we formed LLC)

    Thanks in advance.

    • Hi Margo, I just replied to your comment on the LLC bank account page. Article 4 in the Michigan Articles of Organization only allows for a Michigan address (don’t know how you’d have a CO address there). If you form an LLC in Wyoming to own the Michigan LLC (and future LLCs), it would be a good idea to work with an attorney to transfer your interest in the Michigan LLC from yourself to the Wyoming LLC. It’s usually referred to as an Assignment of LLC Membership Interest. Hope that helps.

  137. Why does this VERY long winded article fail to list even *ONE* benefit of using
    an out-of-state LCC?

    Articles should list “pros and cons”…. not just be 100% one-sided “everything is
    horrible if you do it” texts.

    • Hi Mark, thank you for your feedback. You’re right. A bit too one-sided. When this was first written, we just focused on the major issue of people setting up LLCs in the wrong state and then dealing with headaches later. So it first spoke to that concern. However, there’s more we could discuss. This isn’t our final revision. Thanks again.

  138. Hey Matt,

    I know you were stating that one should open an LLC in their home state, but I just moved to California 4 months ago, and am signing to community college here. I would like to open a completely online E-commerce retail business. None of my products will be stored in the US, and I am the sole member that will be working on it here in California, or I might move back to a foreign country, or move states. So what do I do in this instance? Thanks.

    • Hey Daniel, it comes down to where you’re transacting business. If you’re going to reside in California, you will be doing business in California. You could form an LLC in California and then register it as a foreign LLC in the new state. You could also form an LLC in another state (where you may move back to) and register it as a foreign LLC in California. Hope that helps.

  139. Hi Matt,
    I am an expat living in Israel. I am starting an online company that provides a service (not a physical product) and will operate 100% online. Do you have a reccomendation as to which state might be best for me to form an LLC?

    • Hi Boaz, we’re not sure on this one as it falls into the gray zone a bit. You’ll want to consider where you’re domicile is. Also consider: will you be returning to the states at some point, where do you have state residency, where do you file taxes, in what state is your driver’s license. Those are all factors that come into effect re: domicile; which in turn, effects where you may eventually be transacting business. Hope that helps.

  140. I am expanding my licensed business for Credit Repair into all 50 states. Approx 50% need a “foreign LLC” when registering. It is an internet based business with the original LLC in Florida. Do I have to have a 49 other foreign LLC’s or just 1. I wont have a registered agent or physical office in any of the states except Florida. I am at a loss and no one on the state level in any of the states seem to have the answer for my question. Thanks,

    • Hi Shar, it comes down to where you’re transacting business. Each state has a different set of laws. We’re putting together a piece on this, but it’ll be a few months before it’s out. Try some searches for what is transacting business in the meantime. Hope that helps.

  141. Hi Matt,
    I’ve found your tips very helpful and valuable, but I’m still struggling with making a good decision that will fit my current situation. I am starting a new business which is an ecommerce retail store. Currently I reside in CA, might move to HI soon (for a year or so) and later on I will probably relocate to the East Coast. In the future, I will most likely settle down overseas.
    I am aware that I have to register a foreign LLC in every state I will be living in but I just cannot determine in which state I should form a LLC. I am also considering opening a business in my home country, which is Poland, and operating my ecommerce retail store as an international company.
    I will appreciate any advice. Thanks in advance for your help!

    • Hi Angelika, it comes down to where you’re transacting business. For now, that’s in CA, but it sounds like it may shift to HI or the east coast… or overseas. You have legal and tax implications to consider here. It might be a good idea to speak with a tax attorney and develop a entity setup that works now and in the future. Hope that helps.

  142. I am receiving some land and producing minerals. It is in colorado and i live here also. I am setting up parent llc in wyoming and junior in colorado. If i get ein number on junior llc in colorado and bank account also, will that protect my assets or do i need those on wyoming llc?

    • Hi Rod, since the Wyoming LLC is a separate entity and money may flow through it, it’s common practice to get an EIN and open a bank account.

  143. What about an anonymous Umbrella LLC in Nevada that then owns the Home State LLC?

    • Hi David, that can certainly be done. This page was initially meant as a “basic” overview (yet we didn’t clearly express that). We’ll be adding parent/child setups in an upcoming revision.

  144. Hello. What happens when you move? I live in Utah but I plan to move sometime this year or early next year at the latest. Would is the process to the get register in the new state?

    • Hi Joslyn, depending on the two states, there are either 2 or 3 ways to go about it. What state are you moving to? And do you want to retain the existing LLC’s history, EIN, bank account, etc.?

  145. Hi Matt…

    First of all, thank you for all the great insight. Your website is extremely helpful.

    I am forming an LLC with a partner based out of NJ and I am based out of TX. We will be providing consulting services on a national level that help businesses choose IT vendors. We do not charge our clients any fees for our service (at least for now). We are paid a monthly residual (percentage of the monthly cost to the client) from the vendor selected by our client. This payment is filtered through a third party Master Agent. Said another way…the vendor pays the Master Agent…then the Master Agent pays our firm. I hope that all makes sense.

    Anyway, we need to decide where to set up our LLC. Since the payment is coming from one company (the Master Agent), is there a better state to choose? Would it be advantageous to consider the state where our Master Agent is headquartered (CA)? Will one (or both) of us need to register a Foreign LLC in our own respective states in either case?

    Thank you!

    • Hey Ash, you’re very welcome :) Glad you’re finding the site helpful! You’ll want to look at where you’re legally doing business. In this case, it’s likely both states. It’s a good rule of thumb to run this by an attorney. You’ll want to look into forming an LLC in one state and registering it as a foreign LLC in the opposite state. One thing to keep in mind: it’ll be cheaper to form in Texas and then register as a foreign LLC in NJ. Domestic TX LLC is $300. Domestic NJ LLC is $125. Foreign LLC registration in Texas is $750, but foreign LLC registration in New Jersey is $125. Hope that helps!

  146. Hi! I am looking at forming an LLC for a trucking company. I currently reside in CA but I am military and won’t be here permanently nor am I a CA resident. Should I still form my LLC in CA? How will this be affected when I leave CA?

      • My 1st truck will be based in California but take loads across the country.

        • Hi Tewaner, it comes down to where you’re legally transacting business. As mentioned, California is very strict about that. From what you said, it certainly sounds like you’ll be transacting business in California.

  147. Hello Matt, thanks a lot for all your articles, very informing. I’ve searched for this answer but I didn’t find any, maybe I didn’t knew where to search.. Anyway, this is my question, I’m from Europe, so non us citizen, what is the best state to start an LLC in?

    • PS: I will need an LLC for e-commerce, I will sell all over the world.
      What is the best state to start an LLC for the long run, taxes for profit, filing fees, annual administration costs etc

      Thanks alot Matt.

    • Hey Andrei, non-US residents have more flexibility and can pretty much pick any state you’d like. However, will you have US employees, physical location, or US LLC members? If so, then, you’re LLC will most likely be doing business in those states. It’s also a good idea to speak with an accountant.

      • Hey Matt, thanks for the reply.

        As I said, I will need an LLC for e-commerce, dropshipping. So no US employees, no US physical location or US LLC member.

        What’s the cheapest for the long run?

  148. Hi Matt, great video but it doesn’t cover my scenario. Perhaps I can get further guidance. I’m interested in starting an online service and creating an anonymous LLC in New Mexico for the privacy protection that it offers, nothing more. I need this because of the industry I will be in and the online trolling that’s prevalent which I need to avoid. As you may know, New Mexico has the best LLC privacy available as the state doesn’t even know the owner of the business. They also have some of the lowest registration fees- initial = $50 and none ongoing. If I’m not mistaken, MD registration fees are also low. Anyway, I was looking at the possibility of creating an LLC and then opening a foreign LLC in MD since this is where I live and will be earning a living. What are your thoughts? Anything I need to avoid, watch out for or be aware of?

    • Hey Jebb, New Mexico certainly is a good state in that regard. Yes, you’ll want to look at the foreign LLC form carefully. Compare that with another scenario: forming a domestic Maryland LLC that is owned by your New Mexico LLC. Other things to be cognizant of are state registrations for taxes or employment. Luckily, most state tax documents are not public record. But overall, just keep an eye out. Nothing worse than investing a lot of effort in your setup only to blow it on some post-LLC-formation form or registration somewhere else. Hope that helps.

  149. Hello,

    I live outside the US and I’m not American. I was thinking to open an LLC for an online business. (Travel Agency-concierge)

    Is the Delaware still the best option for a foreigner to do not pay tax in the US (if I live outside the US and no have employe in the US)?

    The annual fee is quite a lot in Delaware (300 bucks) whereas other states are much cheaper. But is the tax “heaven” of Delaware exists in other states ? which one would you recommend for the activity mentioned. (some

    I would like to be in touch with an attorney or someone who could confirm me legally what can I do or not. Do you have any contact for that purpose?

    Thank you very much,


    • Hi Yann, great questions. We don’t have a referral at this time. You will certainly want to speak with an accountant too, as you may still have filing obligations in the US. If you’re the sole owner, you’ll have to report information on Form 5472 each year. Please see Form 5472 for foreign-owned Single-Member LLC. If you’re not legally conducting business in a particular state, then you can pick any state you’d like. Some non-US residents also find it helpful to “work backwards” based on where they want to open a bank account. More info on that here: non-US residents LLC bank account. And this page might be helpful for you too… after your LLC is approved, here’s how to get an EIN from the IRS: LLC EIN without social security number. Hope that helps!

  150. Hi Matt,

    Thank you for all the helpful information on your site!

    I have recently just moved back to the states and established residency in Florida to start a business after living abroad for a decade. A partner and I are currently in the process of developing a hotel resort brand with the plans to open the first location in Puerto Rico with 2 other locations that are in the preliminary planning stages in other states.

    We are planning on setting up an LLC in Florida where I am now living, which will hold the IP for the brand, sell related apparel / merchandise as well as run a related paid membership based online community. We then have additional limited partners for the resort project in Puerto Rico, where we were planning to set up a second LLC specific to that property, with our Florida LLC listed in the ownership of the Puerto Rico LLC.

    We are bootstrapping this until we get a bit more of a firm commitment on investment, but in the meantime want to register our Florida LLC and apply for trademarks on our brand that has been developed so we can start to protect our vision.

    Do you think this is a sensible approach? Due to the complexity of the project with multiple investors unique to each LLC, we will engage with an attorney in a few months. However, we aren’t really keen on waiting a few months to engage an IP lawyer to do a trademark clearance and register our trademark intent to use and figure it best for the Florida LLC to own the trademark rather than assigning it to either of us as an individual.

    • Hey Ryan, great question. Although it seems pretty straight forward (FL LLC owned by you and partner, which then owns PR LLC along with other Members), there are so many ways to set these things up. Small example, maybe there should be another entity that only holds IP, and not IP + sales. Should that entity be an LLC? How should revenue, if any, flow through it? Is an LLC the best entity to hold property in PR? Wish we could give some more information, but it’s so particular to the situation and the details. Best practice is to run the proposed setup by a few attorneys and/or accountants. Would love to hear you findings. Feel free to share any if you’d like :) Hope that helps and thanks for your understanding.

  151. I own Properties out of state. My understanding is the ideal situation is to form an LLC in Wyoming because it has the most protections for charging orders. Then all the properties are set up in LLCs in the state they reside so you have legal standing there but all are owned by the master LLC in Wyoming. Does this make sense?

    • Hi Kevin, yes, this is a popular setup for real estate investors. We will be putting together a guide on this in the near future. The “parent” LLC is in Wyoming, then all “child” LLCs are formed in the property states and are owned by the Wyoming LLC. Hope that helps.

      • Hi Math,

        thank you for the super information. I read your answer: “Hi Kevin, yes, this is a popular setup for real estate investors. We will be putting together a guide on this in the near future. The “parent” LLC is in Wyoming, then all “child” LLCs are formed in the property states and are owned by the Wyoming LLC. Hope that helps.:

        could you please help to let me know where I can find this exact guideline? I would like to follow your guideline to start to open child LLCs and Parents LLC. Do you know the people who charge reasonable rate to help for these?

        thank you so much,
        your help is greatly appreciated.

        • Hi Duc, we haven’t published such a guide yet. We’re not sure our stance on this as we haven’t had the time to thoroughly research all the pros and cons. While yes, it is sometimes common, we’re not sure it’s always best for every situation. Each person’s “setup” varies quite a lot. If you want to file something like this yourself, you’d form the Wyoming LLC first, then form the other LLCs. If the Member is required to be listed in the Articles of Organization (or Certificate of Organization or Certificate of Formation), then you’d list the Wyoming LLC there and in the Operating Agreement. If the Member isn’t required to be listed in the Articles of Organization (or Certificate of Organization or Certificate of Formation), then you’d just list the Wyoming LLC as Member in the Operating Agreement. Hope that helps.

      • HI Matt,

        thank you so much for your valuable education. I have been talking to many companies, they all charge a lot of money to create the LLC.

        could you pls help to guide me how I can start and who I can hire to do the work at a reasonable cost?
        here is my situation:

        1/ I am resident in CA
        2/ I have rentals in 3 different State: CA, MI, and Ohio.
        3/ I don’t have any LLC yet. Everything was bought under my personal name. Yes, I know this is risky. and I am working hard to correct it.

        I read on internet, and have general idea as:

        1/ I should open 1 LLC in each State, in this case, one in CA, one in MI, and one in Ohio. Total of 3 LLCs. these are consider as child LLC
        2/ Then, I open a Parent LLC in Wyoming to hold the other 3 child LLC
        3/ Since I don’t live in Wyoming, I need to pay to have register Agent so all documents will send to the register Agent. Each letter the register Agent get, when they forward to me, they will charge me a fee.

        Are the above concept correct? here are the question:

        from #1, I will pay an annual fee for each LLC in each of the state CA, MI, and Ohio. MI and Ohio fee is low. CA is $800 per year.

        I read your article about we still have to register the Wyoming in CA, so, I need to pay an extra $800 for the Wyoming LLC?

        Could you please help to guide me? and send me to the people who can help me?
        thank you so much Sir,
        your help is greatly appreciated.

        • Hi Duc, we recommend running this scenario by an attorney (an experienced one) in California since you may need to register some (or all) of the LLCs as foreign LLCs in California. California law (corporate law and revenue and taxation law) is very strict as to their definition of “transacting business”. Please also see this page: Is my LLC doing business in California. And possibly as an alternative, you could have a California parent LLC. You’ll want to look at all options. I wish we could tell you exactly what you “should do”, however, it’s a gray area. Hope that helps.

  152. Wow Matt, thanks for the reply. That would be awesome. Any idea when? I’ve been putting it off. I spoke with a company that charges $1800+ to set up the LLC in Wyoming and they say they put in clauses that others don’t in their operating agreements that makes theirs superior to others? Ever heard of this?

    • Hey Kevin, it’s towards the top of our list, but there’s a few things in front of it. Not sure the exact timeline yet. In the meantime, I just sent you an email. Thanks.

  153. Hi Matt,
    I read through many (not all) of the comments and unfortunately did not come across one similar to mine (but apologies if you already responded to something similar). Here is my scenario: I am a resident of and do all my banking in California. A separate Delaware LLC was formed with a separate California foreign LLC for each of the 16 investors in a California rental property. Each LLC was a member of an umbrella LLC. The property was sold and even though the overall umbrella LLC was dissolved, I modified my articles of incorporation to include newly purchased investment portfolios that include properties in multiple states. Every year I pay income taxes in those states for the rental income (my portion of the rental income is so small that I pay between $1 and $15 for the different states where taxes are due). Soooo, here are my questions:
    1. Is there a reason to open an LLC in each of those states (there are 10 states that have income tax requirements)? My real estate dealings are so small and the structure of the investments is such that I’m a small percentage of a big investment that is managed by a management company.
    2. I do not think I need to maintain the Delaware LLC as none of my investment properties are in the state of Delaware. Is it possible to cancel the Delaware LLC and change the California foreign LLC to a domestic LLC without cancelling the California foreign LLC and registering a new domestic LLC?
    (I hope this made sense…. I know, I should consult a tax lawyer….) Thanks for any feedback.

    • Hi Greg, this question feels quite complex. Best practice to run something like this by an attorney or qualified tax professional. Generally speaking, your LLC won’t have to register as a foreign LLC simply by nature of having to file a state return. The later question would imply a “re-domestication”, called a conversion in California. The Delaware LLC can convert into a California LLC. The Delaware LLC can then withdraw its foreign LLC authority and dissolve in Delaware. Hope that helps and thanks for your understanding.

    • Hi Matt, I read thru your valuable information. I need clarification regarding llc. I live in Washington and own a mine in Oregon. We bring our product up to Washington to sell. We plan to have seasonal part time workers out of Oregon. Do we need LLC. For Washington and Oregon or just Washington?

  154. Thanks for your invaluable info! Question: If I am creating an LLC in order to do airbnb arbitrage which state do I choose? The state I live in (California) or the state I will be doing airbnb arbitrage in or a state that has low fees (Wyoming)?

    Airbnb arbitrage is forming a corporation and then renting corporate units from apartment complexes and using them as rentals on airbnb to make a profit fyi.

    • Hi Esther, where an LLC should be formed (or registered as a foreign LLC) comes down to where it is legally transacting business. California is very strict, both via corporate law and tax law, as to the definitions of “transacting business”. Most California residents’ LLCs will be doing business simply by the nature of being a California resident. Please see when is an LLC doing business in California for more details. Therefore, if an LLC were formed outside of California, it would then need to be registered as a foreign LLC in California. Furthermore, California LLC franchise tax will still need to be paid, in addition to other applicable California returns with the California Franchise Tax Board. Generally speaking, in the example of Airbnb arbitrage, if an LLC were formed in California, it would then need to be registered as a foreign LLC in each state where properties are being arbitraged (since the LLC will be transacting business in those states as well). Hope that helps.

  155. Hi Matt,
    I live in NY and i own real estate (rental property) in Alabama, do i need 2 LLcs?
    Thanks in advance.

    • Hi Marie, where an LLC should be formed (or registered as a foreign LLC) comes down to where it is transacting business. In this case, you’re transacting business in Alabama (and possibly New York). You could form an LLC in New York and then register the NY LLC as a foreign LLC in Alabama. Another option is to form an Alabama LLC (or LLCs) that is/are owned by an LLC formed in New York. Or you may just be able to form an LLC in Alabama (a “domestic” LLC). It’s best practice to speak with an attorney about this, as there are a few ways to go about setting it up. Once you figure out your setup, you’ll want to transfer title of the property into the LLC. Hope that helps and thanks for your understanding.

  156. Hi I’m looking to set up a LLC and start investing in renal real estate. I will be registering in the state I plan to do business in. My question is I don’t want to limit myself to just one state. So if I decided to do business in other states and I didn’t want to register my LLC as a foreign LLC every time I invested in real estate in another state other then the one I live in, how would I approach that scenario?

    • Hi Alonzo, if you registered your LLC as a foreign LLC in all states where property is held, it’s important to also know that you still have just 1 LLC, not multiple LLCs. Some investors prefer multiple LLCs. There’s one variation. You could also form domestic LLCs in the states where the properties are located. You could also form a parent LLC in one particular state and then form child LLCs in the states where properties are located. The domestic child LLCs would be owned by the parent LLC. The answer isn’t cut and dry. And it’s best practice to discuss your situation and options with an attorney… or a few. Hope that helps.

      • Hi Matt. Thanks for the info. I don’t like the idea of have multiple LLC’s in different states and I think registering in my primary state and paging for a foreign LLC in every state that I do business would be pricey. So I think the parent and child LLC would be the way I want to go.

        • Hi Alonzo, I don’t understand your reply. You said parent/child LLC will be the way to go, but then you said “I don’t like the idea of having multiple LLCs in different states”. It’s implied here that the child LLCs would each be formed in the states where property is located. Furthermore, having child LLCs (which just means an LLC being owned by another LLC) in multiple states will be very similar in costs to registering an LLC as a foreign LLC in multiple states.

  157. Hi Matt, Hope all is well. I am real estate investor and i have a question on LLC in multiple state. I own few rental properties.

    1. Property A – in NY – Under Property A LLC registered in NY (Home State)
    2. Property B – in Mass – Under Property B LLC registered in Mass (Foreign State)
    3. Property C – in Alabama – Under Property C LLC registered in Alabama (Foreign State)

    Is it a Good Idea to open a New LLC in Nevada as a Parent company, and have Property A, B, C as a child under the Nevada entity.

    I assume i would have to pay the following:
    1. Pay annually for a Registered Agent for Mass, Alabama and Nevada
    2. Pay annual reporting fee for Mass, Alabama, Nevada and New York


    • Hi Asif, yes, you’d have Registered Agent fees and annual report fees in each state where you have an LLC formed (whether the LLC is owned by you or owned by an LLC). It’s best practice to speak with an attorney about the holding company as you’ll need to assign your LLC Membership Interest for all 3 of the existing LLCs to the holding company LLC, if you take that route. You’ll also need to amend the Operating Agreements. There may be additional filings/changes needed in the states. For example, if you have registrations in place with the Department of Revenue/Taxation (or equivalent department). Hope that helps.

  158. I have residents in two states. Arizona & Washington. My drivers license is AZ and my “primary residence” is as well. I also own a rental property in the state. I have a “2nd home” in WA state of which I spend about 50% of the time there. Most of my business is coming through WA however I bill my clients using my AZ LLC. I want to open another LLC and given that most of my business’ income comes through WA right now does it make sense to open a WA LLC too? I ask this because WA state does not have income tax. I am not sure that even though the business is through WA and I bill through my AZ LLC if I am required to pay state income taxes through AZ for the WA income. Thanks!

    • Hi Daniel, it would be best practice to speak to a tax attorney or tax professional about this. Since an LLC is a pass-through entity, income should be apportioned to the state where it’s made. Meaning, your accountant should be filing in both states, and apportioning the income appropriately. Hope that helps.

  159. Hi,

    i was thinking about buying a house to put on the market for rent, do i have to start a business for that? Can i open a bank account without a address over there, and can i get a loan to do this?


    • Hi Conrad, it’s not a requirement to form an LLC for real estate. It’s up to you. Yes, you can open a personal business bank account for this. If you qualify, then you can get a loan. That would be a conversation for a mortgage broker though. Hope that helps.

  160. Hi Matt,

    Looking to form in Wyoming but live in TN. Apparently I would have to also register the wyoming LLC in TN as a foreign LLC from what you are saying. Registering as a foreing LLC means applying for Certificate of authority which costs the same as forming an LLC ($300). So as far as cost it is more costly to have the Wyoming LLC + Foreign LLC in TN.
    But, what about the protection that Wyoming gives you from creditors vs LLC from TN?
    Wouldn’t that make it worth the extra cost? Also, this would be for a single member LLC, which apparently also makes a difference?
    I’d appreciate you comment on this if possible. Thanks

    • Hi Jay, it this context, it would be more common to form an LLC in Wyoming and then they Wyoming LLC would own a domestic LLC in Tennessee. It’s best practice to speak to an attorney in Tennessee though, just to dive into the details. There may be other options available to you as well. Hope that helps.

  161. I’m about to form a Multi Member LLC, I live in Florida and the other member resides in Maine. Our business will be all over the U.S., some could be in FL and some in Maine but not anymore than any other State. We will be producing mostly energy efficiency products as well as some consulting. I’m trying to decide the best State to form the LLC, do you have any advice?

    Thank you,

    • Hi Ray, where an LLC should be formed and/or registered as a foreign LLC comes down to where the LLC is legally doing business. These laws vary by state. Based on what you’ve shared, it sounds like your LLC will be doing business in both Maine and Florida. If that’s the case, you could form an LLC in Florida and register it as a foreign LLC in Maine… or you could form an LLC in Maine and register it as a foreign LLC in Florida. Hope that helps.

  162. Hi Matt,

    Thanks for your timely response as well as all the information you provide here. I should clarify things a bit. Even though the members of the LLC or whichever entity makes the most sense, most of our business will be outside of FL and ME. I’m leaning towards an LLC based on simplicity and lack of double taxation. I believe for at least the 1st year or so, most of the business will come from CA. but from there on it can be from any State.


    • Hi Ray, you’re welcome. The details of what it means to be doing business can be a bit complex. Generally speaking, just selling to customers in multiple states doesn’t mean you are doing business there. While there may be a sales tax nexus if you’re selling physical goods, this is interstate commerce. So you may not need to register your LLC to do business in states just because you are selling to customers there. However, if you’re regularly consulting with clients in California, the state is likely to find you doing business there. Again, in general terms, where activities are happening in the context of running business is where an LLC is likely considered to be doing business. Having regular meetings in a state with clients is also usually considering doing business. Once you determine where to form your LLC, it may very likely need to be registered as a foreign LLC in one, or multiple, states. Hope that helps.

  163. Hi, Matt. I want to set up an LLC for a consulting business. Currently I live in Alabama, but will be moving to Arizona in 3-4 months. In which state should I set up my LLC?

    • Hi Doug, what most people (with consulting businesses and businesses like that) do who are moving soon is form the LLC in the state where they will ultimately be residing and doing business. That’s usually the state where they are moving to. Hope that helps.

  164. Hello, thanks for this information. It makes sense but you’re the only one telling us this. I’m surprised some of the major sites like incfile and legalzoom, etc don’t tell us this. Do you know why?

    • Hi John, while we can’t speak on behalf of other companies and why they make decisions, we can say this: if you dig a bit deeper into the research and/or speak with a few attorneys, you’ll find the same answer. An LLC needs to be formed (or registered to do business as a foreign LLC) in the state(s) where it is legally transacting business. And we’ve also seen articles on both states that talk about forming an LLC in your home state. Hope that helps.

  165. Hi Matt,

    I am considering registering an LLC to manage my real estate investments. I own properties in my individual name currently in the following States:

    1) MD (currently – Home State)
    2) CT
    3) GA
    4) SC
    5) FL (most likely future retirement state)

    Where should the LLC be registered, in MD or FL? I do recognize that it would need to be registered in other states as a foreign LLC. Do I need to have a registered agent or can my property address in that state serve that function?

    Please advise.

    • Hi SK, a property address will likely not suffice since the Registered Agent (assuming that’s you) won’t be there. We’re unable to comment as to where the LLCs should be formed and/or registered. There are numerous ways to structure/register LLCs when there are multiple assets and they are located in multiple states. Ultimately, regardless of where an LLC (or the LLCs) are formed, the LLC that is holding property either needs to be formed in that state where the property is located or registered as a foreign LLC in that state since that is where the LLC is legally transacting business. Apologies we couldn’t be more specific. We appreciate your understanding.

  166. Hi Matt

    I am looking at starting remote health coaching business. I am a U.S. citizen but I am currently living in Germany with no plans to move back to the U.S. in the near future. My wife and I are registered as residents here in Germany. Prior to moving to Germany I was a resident of NH for my entire life. I still receive my U.S. based mail at my parents house in NH and have changed my address for my U.S. bank accounts and drivers license to their address. As a remote health coach I could potentially have clients from any state in the U.S. and would be paid electronically. To start I would be focusing on U.S. based clients but in the future I would be looking for clients from Europe as well. Would an LLC be the best type of business for me? Would an LLC registered in NH be considered a domestic LLC even though I am physically living in Germany?

    • Hi Douglas, while we’re unable to say “you should form an LLC” or “an LLC is best for this situation”, it is most commonly used in situations similar to this. We have more information on LLCs and other entities here, if helpful: LLC vs Sole Proprietorship vs Corporation. And yes, even if you are resident in Germany, an LLC formed in New Hampshire would be a domestic New Hampshire LLC. Hope that helps!

  167. Interesting topic! I am a dual US/Canada citizen, currently residing in Pennsylvania and I have a single-member LLC registered in PA. My only work is consulting for a company in NJ. But I expect to move to Canada sometime this year, and continue consulting for the company in NJ. Can I maintain my LLC in PA when I reside in Canada? Can I report my consulting income (from my LLC) as ‘other income’ on my Canada tax return in the same manner as I do on my US tax return? (As a US citizen, I will still need to file a US tax return when I reside in Canada.) Any guidance will be much appreciated! I realize that I may need to find a Canada/US tax accountant…

    • Hi Roger, yes, you can keep your Pennsylvania LLC while residing in Canada. You’ll want to speak with an accountant familiar with both jurisdictions. Typically, Canadians with US LLCs have to pay tax twice; once to the IRS, and a second time to the CRA. We recommend reaching out to GW Carter as they specialize in taxes for non-US citizens and non-US residents.

      • Hi Matt, thanks very much for the reply.
        Is there any way to avoid the double taxation? I’ve considered that I could change my consulting agreement and just get paid directly as an individual, not via the LLC. But then I would lose whatever liability protection that I have with the LLC.

        • Hi Roger, you’ll need to speak with an accountant. We haven’t researched and written in depth about Canadians owning US LLCs yet. Thank you for your understanding.

  168. Hi Matt,

    I want to setup an LLC as a beneficiary to a living trust. As such it won’t be doing anything other than acting as a placeholder until the trustor dies at which time, it receive all the property and begin managing that property for the members. I live in CA. I don’t want to have to pay the $800/yr franchise fee for a Calif. LLC that isn’t doing any business until it actually starts doing business. In this situation, it would appear that I could form the LLC in a low-cost state(avoiding the annual CA franchise fee because no business id being transacted) until it gets funded through the trust and then convert it to a CA LLC once it actually starts managing the properties. What do you think?

    • Hi Robb, interesting scenario. You could form an LLC in another state and then file Articles of Organization – Conversion (Form LLC-1A) to “domesticate” the LLC into California. You’d also need to dissolve the LLC in the original state. However, you may want to run all this by an estate planning attorney. Maybe there is a simpler setup. For example, as maybe it’s possible to draft language in the trust to make the beneficiary a to-be-formed LLC. So once the trustor passes, you can then form the LLC in CA, and change title, if that’s what the trust entails. If you’re able to do this, it’ll save you the cost of forming the LLC in a non-California state, the conversion/domestication filing, Registered Agent fees in the non-CA state (if applicable), and any annual requirements in the non-CA state (if applicable). Just an idea to explore. Hope that helps.

  169. My current domicile is CT, and I’m nomadic so I can in essence establish domicile in any state. What advice do you have? Is there a state that is ideal to both establish domicile and a LLC? I know CT is one of the most expensive states in every way now! I have an online coaching business and I’m the only owner/employee.

    • Hi Yvonne, I hear you on the flexibility of being nomadic. If you are looking to change your state of residency, and that can be to anywhere, and you’re looking to save money, then that conversation is best had with an accountant (or a few). There are many things to consider. Here are some common tax/cost considerations:

      • cost of living
      • real estate taxes
      • LLC annual requirements
      • inheritance and estate tax
      • homestead exemption amount
      • cost of travel to and from
      • cost of education (for yourself and/or children)
      • state personal income tax
      • state business income tax

      A note about state business income tax: This is usually not applicable to an LLC taxed in its default status (Single-Member LLC taxed as a Disregarded Entity/Sole Proprietorship and Multi-Member LLC taxed as a Partnership or Qualified Joint Venture). It usually only applies to LLCs taxed as C-Corporations (not very common) and in some states, LLCs taxed as S-Corporations, something to look into once an LLC begins to net $80k-$100k or more per year (depending on the number of Members; the more Members, the higher the net profit needs to be in order for an S-Corporation tax election to make sense).

      For people on the east coast, Florida is a decent state to look into for residency as there’s no state personal income tax. Florida also has a homestead exemption with an unlimited amount. Florida LLCs are $125 to form and then ~$140 per year. I’m biased though and personally like Florida. Here are states with no state personal income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming. New Hampshire and Tennessee don’t tax earned income, but they do tax investment income. However, Tennessee will become the 8th no state personal income tax state once the “Hall tax” is phased out in 2022, so there’s that. But many of these states have other types of taxes that may affect businesses. Taxes… which is a big category people look into to save money… there are many different types of taxes and it varies a lot person to person and and business to business. Having said all that, a lot of it could be overkill for a business getting started and looking to find product-market-fit/market validation. But if you’re nomadic and it’s already on your list, you could save a good amount of money by changing your state of residency.

      On another note, as an FYI, the owner of a Single-Member LLC (taxed in its default status) can’t be an employee. You are just the owner. Yes, you work in the business, but you work in the business as the owner, not an employee. The exception to that rule would be if you elect to have your LLC taxed as a C-Corporation and become a W-2 employee or have your LLC taxed as an S-Corporation where you have to become a W-2 employee-owner.

      For those reading this that are considering changing your state of residency to save money on taxes, our best piece of advice is this: actually move to the new state and reside there… especially if you are moving from a state that is notorious for auditing people on the way out (California, Connecticut, Illinois, Massachusetts, New Jersey, and New York). Furthermore, you are at a higher risk of a state tax audit if you’re a high-income earner (high 6-figures, 7-figures+), move from a high tax state to a low/no income tax state, and/or you move shortly before selling assets.

      A great way to think about changing residency and establishing domicile, is to picture yourself in an audit or tax court. How would you answer the following questions:

      • Where is your bank account?
      • Where is your health insurance?
      • Where do your kids go to school?
      • Where is your church?
      • Where does your family wait for you while you’re traveling?
      • Where do you most frequently return to after traveling?
      • Where is your main office?
      • Where is your gym?
      • Where is your country club, group, or regular local meetings?
      • Where are your cars registered?
      • In what state is your car insurance?
      • Where do you own homes?
      • Where do you pay rent?
      • Where are your pets?
      • Where is your veterinarian?
      • What states were you in for more than 183 days?
      • Where is your driver’s license?
      • Where do you file a state tax return?
      • If you have other licenses/permits, where are they held?
      • Where are you registered to vote?
      • Where is your doctor?
      • Where is your dentist?
      • Where is your safe deposit box?
      • Where do you receive most of your mail?
      • Where are financial statement and bills sent?
      • From where do your social media posts’ originate?
      • Where are most of your toll records?
      • Where do the calls/text on your cell phone originate? (records have been subpoenaed)

      Hopefully most of the answers to those questions should point to the new state. It’s also important to have legitimate records and documentation that prove those answers. Hope that helps.

      • I can’t thank you enough for this insight, Matt. I feel much more educated on the subject thanks to you!

        • You’re very welcome Yvonne! I’m glad it was so helpful :)

  170. I have rental property in California and an LLC in California. I live in Washington state. Would it be to any advantage to create an umbrella LLC in Washington in which to place the CA LLC? I’m thinking that in the future I may purchase property in Washington.
    Your valuable insight is appreciated.

    • Hi Michael, I actually sent you an email as I had a few followup questions. Did you receive it? Our system shows it was delivered, but not opened yet.

      • Hi Matt, I apologize for not getting back sooner. To refresh our memories here is my original question with a bit more info. I have rental properties in California under an LLC in CA. However I live in Washington state. Would there be any advantage or reason for me to have a “parent” LLC in WA putting the CA LLC as “child”? The reason I ask is that I was told that if the child LLC is the operating LLC and the “parent” LLC the managing LLC. This way if the “child” LLC is sued your assets would be better protected. If I lost the lawsuit only the operating assets would be vulnerable but the operating LLC would not own any thing. Any truth in that? And by setting up the managing LLC in WA I figure I could avoid at least one of the yearly $800 CA LLC “taxes”. WA LLC “taxes”, I think, are about $200 a year. This make any sense?

        • Hi Michael, you mentioned that in the future you may purchase property in Washington. If that property were placed in your Washington LLC, then the “managing LLC” would own assets. Unless you were intending to open another Washington LLC in the future for future property purchases. Sometimes, placing an LLC “inside” another LLC (parent/child LLC relationship) can strengthen your asset protection by limiting the remedies of creditors, however, it’s a bit complicated and there isn’t a black and white answer in a scenario like this. We recommend speaking with an asset protection attorney (or a few) to look at all the different setups and the pros and the cons. In these situations, there are a multitude of ways things can be structured. Thank you for your understanding and hope that helps a bit.

  171. First off, thanks so much for all this helpful info!
    I’ve been following along your guide to forming an LLC in New York, as that’s where I currently live, and where most of my clients live. (I’m a florist, work from home, do events mostly in New York, and have an e-commerce store and ship globally.) However, I’ll be moving to Connecticut in a few months. I’m at the step where I’m applying for an EIN number. Should I continue to set up my LLC in New York? Or should I call my progress (and money spent) thus far a wash, and start over once I move to CT?

    • Hey Lauren, you’re very welcome! Is your move to Connecticut something you think will last many years or is there a chance you’ll move back to New York? Will you business activities eventually move over to Connecticut or will you stay relatively close to New York and do business in both states?

    • We’re moving just over the border into CT, and will continue working in NY (both for my LLC and my other salary job). CT will be my home office for my e-store, but the services I provide will be in NY. I expect we’ll be in CT for at least 5 years, probably more.

      • Hi Lauren, it sounds like your LLC will be transacting business in both states. It may be easiest to register your New York LLC as a foreign LLC in Connecticut. Hope that helps.

  172. Hi Matt,
    Your website has been so helpful, thank you so much! I live overseas so my understanding is that I can register my LLC in any state. I registered in New Mexico since there is no annual fees or reports, and since I do not have New Mexico sourced income, I would not need to file a tax return there either, correct?

    I know New Mexico starting doing a gross receipts tax on services, however since I am not physically there nor are my clients I believe I would be exempt. Can you confirm that I would only file a federal tax return and no state tax return is required? I just want to make sure I am not missing anything as this will be my first time filing. Thanks so much, I appreciate your help!

    • Hi Cole, thanks so much! We’re not able to comment on specific tax situations as things vary far too greatly and depend and multiple factors. We recommend speaking with an accountant to confirm. Thank you for your understanding.

  173. What does it mean when they say that New Mexico and Wyoming protect an LLC’s privacy? What other states do?

    • Hi Martin, it usually means that the names of the LLC Members are not required to be listed on the Articles of Organization (or Certificate of Organization or Certificate of Formation). Each state’s formation document (and Annual Report document) needs to be examined carefully (we recommend printing them out and test-filling them out and/or going through a states’ online filing). You need to see if Members (or Managers) need to be listed, which addresses are required, and how the forms are signed (if you’re signing them because you are filing yourself… as opposed to hiring someone to file for you; it’s usually better to hire someone if you don’t want information about yourself listed). And if an LLC is formed in a “private” state, but your LLC is transacting in your home state (a very common situation) or another state, you’ll be required to register your “private” LLC as a foreign LLC in the state(s) where it is transacting business. So then you’ll need to look at that state’s foreign LLC filing forms (and annual report form) to see what information is required… since that can sometimes “bust” your privacy. Basically, it’s not a quick and short answer (unlike some sites may lead you to believe). Additionally, you need to decide which person (and which address) will be used for the Registered Agent and for the LLC Organizer (in multiple states; if applicable). While most people can fill these roles themselves, they may not want to if they don’t want their name or address anywhere on the LLC’s public forms/annual reports. Additionally, how an LLC is managed, may affect what information is required. We don’t have a list of all private states published at this time, but it is on our to do list. Thank you for your understanding and hope that helps.

  174. Current Background:

    I am an American citizen that is in the process of opening a Multi-Member LLC with two members that are non-citizens of the US. They reside outside of the country and as I am the only one within the US, it has become a question as to whether opening an LLC in Delaware would provide benefits that outweigh that of if I registered the LLC in my home state of Minnesota. I operate between the US and Canada with my primary residence being that in Minnesota. As all business will be digitally based, what recommendations would you make in approaching this? Would it be best to register in my home state, or would it actually have benefits for myself and the others involved to open an LLC in Delaware or another state?

    • Hi Sean, if you form a Delaware LLC, but you are transacting business in Minnesota, you should register that Delaware LLC as a foreign LLC in Minnesota. In the event of a lawsuit, there are multiple factors taken into consideration to determine where a case will be heard. Unfortunately, it’s not a simple black and white answer. So you may not get the supposed “Delaware benefits”. Having said that, forming a Delaware LLC that owns a Minnesota LLC could offer more asset protection (specifically strengthening the remedies of creditors; even though a Multi-Member LLC in Minnesota does offer good protection), but it’s something best discussed with an asset protection attorney in Minnesota. Redden Law PLLC out of Minnetonka has written about some of the changes to the Minnesota LLC Act and they apply to creditors’ remedies. Hope that helps.

  175. Thank you for all the wonderful information.
    I live in Australia.
    Looking to get LLC. Partnership
    Doing booking keeping online.
    Which state would be the best.
    My partner is a US citizen I am not.
    We hope to relocate one day to the US.

    • Hi Deborah, you’re very welcome :) The LLC should be formed in the state where it is transacting business. That will most likely be the state where your business partner resides. Hope that helps.

  176. Hey Matt,

    I’m a US citizen. I want to invest (trade): Stocks, Forex, etc under an LLC. I live in New York, NY, but was wondering if I could set up the LLC elsewhere to avoid high NY state, NYC taxes. Its strictly an online business. No product, no office, etc. Just working from home. Thanks!

    • Hi Cullen, the laws of “transacting business” don’t work like that. Meaning, because you are running the business from home in New York (or coffee shops, etc.), your LLC is transacting business in New York. You’ll likely need to register your out-of-state LLC in New York. And as a New York resident, you’ll end up paying New York taxes either way. Hope that helps.

  177. Matt

    what if you have an Amazon -type business or Walmart online store how do you determine “where” you do business?

    im in WA state and also I need Delaware-type privacy any suggestions? if i have to file a foreign LLC I guess I may have to

    • Hi Jay, for online businesses, it’s the state where you are running the business from. You can consider forming an LLC in a more private state and then having that LLC own an LLC in Washington. We recommend hiring a Registered Agent and a company to form your LLC, to keep the registration as private as possible. You’ll need to look the Washington LLC filing carefully though (cross your Ts and dot your Is) before moving forward since they also have a required state Business License filing. Hope that helps.

  178. Hello! I have tried to read through as many of these comments as possible, but still not getting my specific answer.

    I live in California but I want to set up an LLC to buy property in Michigan.

    I will also want to buy in other states if things go well.

    I see you say its recommended that I get a Michigan LLC for my property there, but I will still have to register in CA as a foreign agent and pay the 800 yearly tax yes?

    I saw you mention a scenario with a Parent LLC in Wyoming with sub-LLCs in other states – how does this work? Could I start a parent LLC in CA, and then sub-LLCs in every state I buy property in with similar LLC names? Is this unwise?

    Cheers mate!

    • Hi AJ, because California laws are strict about doing business, out-of-state LLCs owned by California residents are usually deemed “doing business” in California and are supposed to be registered as foreign LLCs in California (and they have to pay $800 franchise tax and file Form 568 every year). We have more information here: When is an LLC doing business in California.

      You can form a California LLC as a “Parent” LLC and then form LLCs out-of-state (“Child” LLCs) that are owned by the California LLC. In this setup, the Child LLCs don’t need to be registered as Foreign LLCs. We don’t recommend forming LLCs with similar names because they can get very confusing to manage administratively. Also, if you are forming (or registering) an LLC in California, and you don’t need it open right away, we recommend using a “future file date” of 1/1/2021. This is because of Assembly Bill 85 that was passed in 2020. LLCs that go into existence in 2021 are now exempt from their first $800 franchise tax payment. For California LLCs formed in 2021, their first $800 payment isn’t due until April 15th, 2022. Hope that helps.

      • That does help a lot! Thanks for the info!

        So what benefit is there to opening a parent LCC in CA with child LCCs in other states, over just opening new LLCs in each state I do business in?

        Have a good one.

        • You’re welcome AJ. In that setup, the Child LLCs wouldn’t need to register as Foreign LLCs in California. Your federal tax return would all be filed under the holding company too.

  179. This is very helpful information! Thank you so much for posting, the videos really help!

    My sister and I are starting an LLC Partnership. We reside in Wisconsin and NC. Wisconsin seems like the better option to file for an LLC. If we are conducting online business in both/many states, would we have to file for an LLC in multiple states or could we just file in one?

    Also, I am a military spouse, so we move every 3-5 years. How would this affect the LLC?

    • Hi Ashley! You’re very welcome :) If the LLC is formed in Wisconsin, but the LLC is also transacting business in North Carolina, it’s supposed to be registered as a Foreign LLC in North Carolina. Tell your spouse, thank you for their service! We greatly appreciate it. Since you move around a lot, you are supposed to qualify your out-of-state LLC as a Foreign LLC in the state where you are doing business. Then if you stop doing business in that state, you file a “withdrawal” of the LLC’s Foreign qualification and then file a new Foreign LLC qualification in the new state. It can be a little cumbersome. However, I hope that helps.

  180. Hi Matt!
    Thank you for all the helpful information. I am an American citizen (originally from NY) but I have been living and working in Spain for the past 5 years. I will be starting a new job in January of 2021 with an American company working remotely from my house in Spain and the owner recommended that I set up an LLC since I will not be an employee but more so an independent contractor.

    I am not sure if I should set up my LLC with New York state, as that is technically my home state and I have a NY state drivers license, or if I should set it up with another state to avoid the pricy fees. As I mentioned before, I do not actually live in New York. I only have my parent’s house down as my address on my license and passport, and go back to visit once or twice a year at most. I do have a short term Spanish residency card that I renew every 2 years and am registered in the house I currently live in there.

    • Hi Maxine, you’re very welcome! First, forming an LLC isn’t what makes you an independent contractor. You could also operate without an LLC and still be an independent contractor. We’re not saying don’t form an LLC; just an FYI. Since you’re not physically present in the US (and won’t be for many years it seems), you can form your LLC in any state you’d like. On the other hand, if you were soon returning to New York, you’d want to form the LLC there as it would soon be “transacting business” in New York. However, that doesn’t seem like the case. Hope that helps.

  181. I live and pay taxes in CA. In 2011, I bought some APTS in AZ and formed a AZ LLC. In 2016, I refinanced my AZ APTS, and purchased under my AZ LLC, and bought a NNN Fast Food in CO.

    Now in Nov-2020, I now sold my APTS in AZ and exchanging all my proceeds into a Land Development deal in NV for 24 homes, where the intention is probably to sell the land after I build the infrastructure within 18 months. Also, I expect to sell the NNN in CO within 18mo, as the tenant has a purchase option.

    Would you recommend just keeping my AZ LLC for now, and just wait for these future events to occur, or do I collapse my AZ LLC now that no activities occur there, and just form a new CA LLC for all my real estate activities that will mostly continue to occur outside of CA. Although my AZ LLC has no annual fees, I still must have an agent at $125/yr and file an annual return, even though I won’t have any more activity.

    • Hi Jack, you don’t want to dissolve the AZ LLC now as you’ll run into title issues when you go to sell the NNN in CO. We recommend leaving the AZ LLC open until all activities are completed. Looking forward, you may want to look into setting up a holding company LLC, say, in California. Then that holding company (aka Parent LLC) owns subsidiary LLCs (aka Child LLCs). Each Child LLC is formed in the state in which it’s conducting business. That will help “unbundle” liability risk. However, it may make financing a bit more complicated. Hope that helps.

  182. Hello, my business partner and I are forming a business and we are looking to form a LLC. He is a resident of Georgia but resides with me in DC half the year. We are deciding whether we should file the business in DC or GA. Tax purposes and start up fees point us to GA, but the manufacturing of products that will be sold online will more than likely happen in my home in DC. We have limited startup capital, which state should we file? Thank you in advanced!

    • Hi Niko, since the LLC will be transacting business in DC, you should form your LLC in DC. If you formed the LLC in Georgia, you’d have to register it as a foreign LLC in DC. Hope that helps.

      • Thank you for the response Matt!

        Would we have to register a foreign LLC even if he is a resident of Georgia?

        • You’re welcome Niko. If the DC LLC is also doing business in Georgia, then it should register in Georgia as a foreign LLC.

  183. Hi Matt,
    Thanks for all the useful information. I live in California and I’m looking into creating an LLC for the sole purpose of overseas real estate investment. Since there’s no business to speak of happening in the US, does it matter much which state I register in? California would be the most convenient as far registered agents and such but also seems that it’s the most expensive state.

  184. Hi Matt,
    Great article, thank you!
    I’m a foreign real estate investor and currently own land in CO. I would like to set up an LLC for tax benefits when I sell the property and eventually reinvest. Since I’m a non US citizen and do not reside in the US, would it still be best to form the LLC in CO since that is where my current property is, or take advantage of different states benefits and form the LLC elsewhere? Thanks!

    • Hi Shamsa, if you formed the LLC outside of Colorado, but the LLC is transacting business in Colorado, it should be registered as a foreign LLC in Colorado. Regarding any tax strategies, we recommend you speak with an accountant (or a few). Thank you for your understanding. Hope that helps.

  185. Hey Matt, I am a government employee living overseas. I do not have property or residence in the United States. However, I do have an APO mailing address, which is essentially a US mailing address. I have no idea where I will live when I return to the US, and I don’t know when I will return. I planned to start an LLC in Wyoming strictly for my online business until I ran across your page. If not Wyoming, Nevada, or Deleware, where should I, as a displaced American, register my business?

    • Hi Barry, in this case, since the LLC will not be “transacting business” in any particular state, you can form an LLC in any state which you like. When/if you later return to the states, you can register your Wyoming LLC as a foreign LLC in the state you move to (the state where the LLC would then be transacting business). Hope that helps.

  186. Hi Matt,

    Hoping you can shed some light on LLC formation. I’m looking at forming an LLC to hold partnership interests (LLC invests as limited partner in real estate development partners, receives K-1s). The LLC will have several members who hold various % ownership interest spread across several states. Since the underlying partnership interests are all passive investments, is any state where one or more members reside a valid location?

    Thanks in advance!

    • Hi Al, an LLC that just holds partnership interests in an LP is unlikely to be deemed transacting business in any one location. You’re likely fine to choose any state you’d like.

  187. Hey Matt, is still waiting for IRS to send me the EIN for the Delaware LLC I setup in oct . It has been over 6 weeks since I faxed the docs . Any update on what is the situation with others on ground ?

    Further , I am in the biz of of services – Shipping and logistics . My counter is based across 3 states in US . What we do is , we buy services from vendors and sell it to end customer as one point contact . An integrated solution. We do not physically exist in the state where the shipment is happening .

    Often the shipment starts from shipper in point A ( say Columbus Ohio) and ends exiting Norfolk , Virginia

    I invoice the customer who operates from Canada for this whole process

    And pay each of the vendors based in Ohio and Virginia

    So where is the point of service and taxes payable .

    Complicated ?? :)

    • Hi Parmeet, it can take up to a few months to get your EIN approval faxed back. However, you can call the IRS after 45 business days (from the date the fax was sent) and request an EIN Confirmation Letter (147). You’ll want to speak with an accountant regarding your tax obligations. Thank you for your understanding.

  188. Hi Matt, Happy Christmas!
    That is awesome article, Thank you!
    I am non-us resident, and l live in overseas. I am trying to form my single member LLC in Wyoming.
    I am looking for a suitable agent, and I found that there are different mail forwarding fees, such as 40/month of northwest or 50/yr of other agents.
    My first question is that why there are so big price differences among these agents?

    Besides, I really really need a utility bill to verify my business address.
    Could you please give me some advice how I can get these bills?
    Can I buy an internet or phone number service and require them to mail these bills to my business address? Does it work?
    About business address, Should I buy a mail forwarding address service for getting these bills? or Can I use this agent address?

    Thank you very much!

    • Hi Timber, Merry Christmas! And thank you :) A Commercial Registered Agent’s “base fee” (the affordable yearly fee) is really just for Service of Process (legal mail, like a lawsuit) and state correspondence (ex: a letter from the Secretary of State’s office). If you want to get more physical mail sent on a regular basis for other business purposes, that’s when mail forwarding would be used. Can I ask what you need the utility bill/address verification for? There may be another solution depending on the situation.

      • Hi
        Thank you for reply!
        I need a utility bill like gas/water/internet to verify business address for my Amazon seller account.
        Amazon need this utility bill to verify that I’m operating my firm.

        • Okay, I see. If you would have replied about opening an LLC bank account, we have a solution for you (see non-US resident opening LLC bank account), however, we don’t have a known solution for the utility bill and address verification for Amazon. However, check out the virtual office service from Northwest Registered Agent. They offer a lease with their service. You may want to call or email them with any questions. And also check with Amazon to see if that’s acceptable.

  189. If you want inside and out side protections from an LLC, and Nevada and Wyoming both give them, wouldn’t it be better to have two? the State you do business in and NV or WY to protect you from outside lawsuits?

    • Hi Michael, we recommend speaking with an asset protection attorney in the state where you reside. If you are personally sued, the laws of Nevada or Wyoming will most likely not apply, even if you own an LLC in those states. Asset protection and charging order protection is not as straightforward as most other sites and videos make it out to be. Hope that helps.

  190. I live in Ohio and my brother lives in California. We would like to start an LLC to buy stocks. Also we would like to do Real estate business in Texas. We are planning to start an LLC in Delaware. Do we need to form foreign LLCs in CA/OH and TX?

    • Hi Pravan, please see when is an LLC doing business in California. You will likely need to foreign qualify your Delaware LLC in California, Ohio, and Texas since the LLC will be transacting business in all of those states. You may also want to consider separating risk. Meaning, not having the same LLC own real estate that also invests in stocks. If there is an issue at a rental property, you likely don’t want that impacting your investment portfolio.

      You can use separate LLCs (owned by you and your brother) or you can also look into forming a Parent LLC (aka LLC holding company) and that LLC doesn’t do any business except own other LLCs. For example, you form a Parent LLC in Delaware and that Delaware LLC owns an Ohio LLC that invests in stocks. The Delaware LLC also owns a Texas LLC which owns an investment property. In that case, the Delaware LLC wouldn’t need to foreign qualify in California (or any other state), since it’s not transacting business, however, in that example, both the Ohio and Texas LLC will likely need to foreign qualify in California because California has very strict rules about doing business in the state. It may also be a good idea to speak to an asset protection attorney and/or a tax attorney as there a few ways you can structure things. Hope that helps.

  191. Matt,

    This is the clearest explanation of where to file that I have read (and I’ve read a lot). Kudos. My question is: for a real estate LLC is there any benefit to having a local LLC and a parent LLC in another state for “corporate veil” purposes? Thanks again

    • Hi Ross, thank you very much. The corporate veil is really about treating an LLC as a proper legal entity (ex: not commingling funds) and not using the LLC to commit fraud. In rare circumstances, the corporate veil can still be reached through in layered ownership. Some benefits of a holding company LLC (Parent LLC) owning Child LLCs (in the states where there is property) is a consolidated federal tax return (assuming default tax treatment of Child LLCs) and isolation of liability among properties. There are more advanced things than can be done, but those are best to discuss with a tax attorney and an asset protection attorney (or a few). Hope that helps and thank you for your understanding.

  192. So, “form it in your home state or where the LLC is generating revenue, unless you’re a non resident alien”: maybe you could advise non resident aliens on the best state(s), then. Cost, privacy, easiness of finding a bank, easiness of doing filing and stuff online, easiness of finding a registered agent, easiness of getting a sales tax ID, …

    • Hi Nick, I wish it were that simple. It’s actually very complex to research and write. And many non-US residents are concerned about taxes. There are dozens of business activities that foreigners engage in. To really cover is comprehensively will take us some time. It’s on our list though. In the near future, we’ll have more comprehensive information for non-US residents. However, the LLC Registered Agent we recommend offers service in all 50 states. If you’re curious about LLC costs, please see LLC filing fees by state. And please see LLC bank account for non-US residents. Hope that helps. And thank you for your understanding.

      • What about the reseller certificate (= sales tax ID)? Do you know if some states offer it for cheap, online filing, done quickly, etc.?

  193. hi. i am a foreigner non us resident. i have a friend in us in state 1. i want to make him member in LLC. but we want to make LLC in a state 2. the LLC will be on my name means on foreigner name but have member in us. do we still have to make foreign LLC in state 1?

    • Hi Jamshaid, if you form the LLC in State 2, but the LLC is doing business in State 1, then the LLC needs to register as a foreign LLC in State 1.

  194. Hi Matt, thanks for the great information. We are currently forming a oil and gas related company that will not be profitable until 2022 and at that time will move to and do business in TX, but until next year we are in CA. Since we know the business will be moved to TX should we file our LLC in TX and register with CA as a foreign company?

    • Hi Gary, you’re very welcome. That is a better way to go. Form the LLC in Texas, foreign qualify in California, and then cancel that foreign qualification after you leave California. Hope that helps.

  195. Hi Matt,
    We formed a real estate LLC in Nevada in 2015 when we were living there although the real estate is in Hawaii. However, we have recently retired to Texas. Since we do not do business in Texas do we have to register as a foreign LLC in Texas?
    Thank you!

    • Hi Maria, if the Nevada LLC is not doing business in Texas it doesn’t need to be registered as a foreign LLC.

  196. Hey Matt, I’m interested in creating an anonymous LLC in New Mexico so that the owners are not visible. We’ll have to register it as a foreign LLC because the main LLC will be based in Illinois where I live. Would this arrangement cause the owners to be exposed anyway since Illinois LLCs require their owner to be disclosed? Is there a way to structure the two LLC’s as an Illinois resident whereby the owner of the LLC can be anonymous?

    It’d be for an online retail business so why can’t only one anonymous LLC be registered in New Mexico since when I file taxes I can just set the 1099 forms as a New Mexico address? How would anyone know? (Other than the fact I get paid from a New Mexico LLC while living in Illinois.)

    • Hi Phil, because the Illinois foreign LLC form (Application for Admission to Transact Business) and the Illinois LLC Annual Report require Managers to be listed (if the LLC is Manager-managed) or Members to be listed (if the LLC is Member-managed), this would likely require you to disclose yourself. You could hire someone as the LLC Manager and list them.

      Alternatively, you could form a New Mexico LLC and have the New Mexico LLC own a Domestic LLC in Illinois. In this manner, an Illinois LLC Articles of Organization would be filed and you can list the New Mexico LLC (and the New Mexico address) as the LLC Member or LLC Manager.

      Either way, you would most likely want to hire someone to make those filings so that they sign the forms instead of you. Hope that helps.

  197. Hi Matt,
    I have a question: If I have a company in WY, but my prep center is in VA, do I need to get a reseller certificate in WY or is it better to get it right in VA?
    Thank You,

    • Hi Anastasia, your LLC can get a reseller certificate in any state needed. It sounds like your Wyoming LLC is doing business in Virginia. In that case, it should be registered as a foreign LLC in Virginia.

      • Thank You, Matt.
        Could you also help me with understanding since when a company have to turn in the reports? What is considered as a commencement of company’s activity?

  198. I’m in the development stage of launching a small semi-truck logistics LLC and I’m weighing the options between WY, NV, and CA. It seems that all things equal WY would be advantageous over NV, but I’m hoping for clarity on WY vs CA, as CA it is my home state – although I wouldn’t be conducting business here more than anywhere else.

    Being that my affairs would be conducted in all of the lower 48, does filing in WY bring any advantages over CA?

    Do I have to file a foreign LLC for each & every state I’m transporting within?

    Would double taxation be implemented in any of the above?

    My best, Derrick

    • Hi Derrick, please see When is an LLC doing business in California? As per Section 23101 (a & b) of the Revenue & Taxation Code, your LLC will be doing business in California. So if you formed an LLC outside of California, it would need to be registered as a foreign LLC in California and will still have to pay franchise tax and file LLC returns with the California Franchise Tax Board.

      Your LLC won’t need to be registered as a foreign LLC in the lower 48, because that is known as inter-state commerce (as opposed to intra-state commerce). And no, there wouldn’t be double taxation. Hope that helps :)

  199. Hello,

    I am trying to setup my LLC for Credit Repair and my home state is actually Delaware. Due to the nature of my business being credit repair, I have clients for DE and referrals where the clients live in Philadelphia, NJ, SC etc…

    Is there anything further I would need to do regarding setting up my LLC if I have clients who hire my service and they live out of state? I just want to make sure I’m doing everything legally and correctly on my end.

    I believer I read something about having to have surety bonds in each state you do business in but again I’m based in DE and the clients live in other states. My business is ran remotely online and I speak with prospects via phone and email only.

    I hope I explained this right with out causing confusion on your end.



    • Hi SG, ​apologies for the slow reply. You don’t need to register your LLC as a foreign LLC in the states where you have customers. So a Delaware LLC is fine. Regarding the surety bond, that isn’t an LLC requirement, but it may be a regulatory requirement in the credit repair space. We’re not sure, so you’ll want to look into that.

Leave a comment or question

Comments are temporarily disabled.