LLC Annual Fees by State
Note: Some fees mentioned in the video above have changed. Make sure to reference the table below for the most accurate information.
The table below shows LLC annual fees by state.
This is up to date as of 2018.
The average LLC annual fee in the US is $101.
Most states call this the Annual Report, however, it has many other names:
– Annual Certificate
– Annual List of Members
– Annual Registration Fee
– Biennial Report
– Biennial Statement
– Business Privilege Tax Return
– Decennial Report
– Franchise Tax Report
– Periodic Report
– and more
What’s the LLC Filing Fee?
The LLC filing fee is a one-time fee paid to the state to form your LLC.
What’s the LLC Annual Fee?
The LLC annual fee is an ongoing fee paid to the state to keep your LLC in compliance and in good standing. It’s usually paid every 1 or 2 years, depending on the state. This fee is required, regardless of your LLC’s income or activity. Said another way: you have to pay this. Failure to pay the annual fee will result in the state dissolving (shutting down) your LLC. This is the case in over 90% of the states.
Northwest ($39 + state fee) or LegalZoom ($149 + state fee)
LLC Annual Fees:
| State LLC | LLC Filing Fee | LLC Annual Fee | Due | Payable To & Form Name |
|---|---|---|---|---|
| Alabama LLC | $183 | $100 minimum | 2.5 months after formation | AL Department of Revenue, Initial Business Privilege Tax Return |
| Alaska LLC | $250 | $100 | Biennial, January 2nd | AK Department of CCED, Biennial Report |
| Arizona LLC | $50 | $0 | No annual fee + no report due | N/A, N/A |
| Arkansas LLC | $50 | $150 | Annual, May 1st | AR Secretary of State, Franchise Tax Report |
| California LLC | $70 | $800 + $20 | Various | CA Franchise Tax Board, Annual LLC Franchise Tax + Stmt. of Information |
| Colorado LLC | $50 | $10 | 5 month window surrounding anniversary month | CO Secretary of State, Periodic Report |
| Connecticut LLC | $160 | $20 | Annual, anniversary date | CT Secretary of State, Annual Report |
| Delaware LLC | $90 | $300 | Annual, June 1st | DE Dept. of State, Annual Franchise Tax |
| Florida LLC | $125 | $138.75 | Annual, May 1st | FL Department of State, Annual Report |
| Georgia LLC | $100 | $50 | Annual, April 1st | GA Secretary of State, Annual Registration Fee |
| Hawaii LLC | $50 | $15 | During quarter of anniversary date | HI Business Registration Division, Annual Report |
| Idaho LLC | $100 | $0 (must file an information report, no fee though) | Annual, anniversary month | ID Secretary of State, Annual Report |
| Illinois LLC | $150 (used to be $500) | $75 (used to be $250) | Annual, anniversary month | IL Secretary of State, Annual Report |
| Indiana LLC | $90 | $50 (by mail) or $31 (online) | Biennial, anniversary month | IN Secretary of State, Business Entity Report |
| Iowa LLC | $50 | $60 by mail or $45 online (used to be $45 by mail and $30 online) | Biennial, April 1st of odd years | IA Secretary of State, Biennial Report |
| Kansas LLC | $165 | $55 | Annual, April 15th | KS Secretary of State, Annual Report |
| Kentucky LLC | $40 | $15 | Annual, June 30th | KY Secretary of State, Annual Report |
| Louisiana LLC | $100 | $35 | Annual, anniversary month | LA Secretary of State, Annual Report |
| Maine LLC | $175 | $85 | Annual, June 1st | ME Secretary of State, Annual Report |
| Maryland LLC | $100 | $300 | Annual, April 15th | MD State Dept. of Assessments, Personal Property Tax |
| Massachusetts LLC | $500 | $500 | Annual, anniversary month | MA Secretary of the Commonwealth, Annual Report |
| Michigan LLC | $50 | $25 | Annual, February 15th | MI Dept. of LARA, Annual Report |
| Minnesota LLC | $160 | $0 (must file an information report, no fee though) | Annual, December 31st | MN Secretary of State, Annual Report |
| Mississippi LLC | $50 | $0 (must file an information report, no fee though) | Annual, April 15th | MS Secretary of State, Annual Report |
| Missouri LLC | $105 | $0 | No annual fee + no report due | N/A, N/A |
| Montana LLC | $70 | $20 | Annual, April 15th | MT Secretary of State, Annual Report |
| Nebraska LLC | $105 | $10 | Biennial, April 1st of odd years | NE Secretary of State, Biennial Report |
| Nevada LLC | $75 | $500 | $150 due month of filing. $350 annually, anniversary month | NV Secretary of State, Annual List of Members |
| New Hampshire LLC | $100 | $100 | Annual, April 1st | NH Secretary of State, Annual Report |
| New Jersey LLC | $125 | $53 | Annual, anniversary month | NJ Department of Treasury, Annual Report |
| New Mexico LLC | $50 | $0 | No annual fee + no report due | N/A, N/A |
| New York LLC | $200 | $9 | Biennial, anniversary month | NY Department of State, Biennial Statement |
| North Carolina LLC | $125 | $200 | Annual, April 15th | NC Secretary of State, Annual Report |
| North Dakota LLC | $135 | $50 | Annual, November 15th | ND Secretary of State, Annual Report |
| Ohio LLC | $99 | $0 | No annual fee + no report due | N/A, N/A |
| Oklahoma LLC | $100 | $25 | Annual, anniversary month | OK Secretary of State, Annual Certificate |
| Oregon LLC | $100 | $100 | Annual, anniversary month | OR Secretary of State, Annual Report |
| Pennsylvania LLC | $125 | $70 | Every 10 years | PA Department of State, Decennial Report |
| Rhode Island LLC | $150 | $50 | Annual, September 1st - November 1st | RI Secretary of State, Annual Report |
| South Carolina LLC | $110 | $0 | No report due unless you file taxes as an S-Corp | N/A, N/A |
| South Dakota LLC | $150 | $50 | Annual, anniversary month | SD Secretary of State, Annual Report |
| Tennessee LLC | $300 | $300 minimum | Annual, April 1st | TN Secretary of State, Annual Report |
| Texas LLC | $300 | $0 | Annual, May 15th | TX Comptroller, Public Information Report + Franchise Tax |
| Utah LLC | $70 | $15 | Annual, anniversary month | UT Department of Commerce, Annual Report |
| Vermont LLC | $125 | $35 | Annual, March 15th | VT Secretary of State, Annual Report |
| Virginia LLC | $100 | $50 | Annual, anniversary month | VA Corporation Commission, Annual Registration Fee |
| Washington LLC | $180 | $81 | Initial $10, within 120 days of filing. $71 annual, anniversary month. | WA Secretary of State, Annual Review + Business License Renewal |
| Washington D.C. LLC | $220 | $300 | Initial April 1st, then Biennial April 1st | DCRA, Initial Report + Biennial Report |
| West Virginia LLC | $100 | $25 | Annual, July 1st | WV Secretary of State, Annual Report |
| Wisconsin LLC | $130 | $25 | Annual, anniversary quarter | WI Secretary of State, Annual Report + Business Tax Registration |
| Wyoming LLC | $100 | $50 minimum | Annual, anniversary month | WY Secretary of State, Annual Report |
Video Transcript:
Hey, folks. Matt Horwitz at llcuniversity.com. I hope you’re doing well. Today, we’re going to talk about the LLC annual fees by state, all 50 states. I am referencing a table that we have on our website. I just printed it out to read it to you. This is a little bit ridiculous to make a video about all this stuff, but hey. Some people like videos and it’s easier to consume. I’m going to go a little bit quicker here, because there’s a lot of information to cover. Again, probably 94% to 95% of the states all have an annual report or some iteration of the annual report.
Most of the time, it’s called annual report. Sometimes it’s called an annual certificate, an annual list of members, an annual registration fee, a biennial statement, a business privilege tax return, a decennial report, a franchise tax report, a period report, AKA you have to send the state money every one year, every two years and in Pennsylvania, for example, every 10 years to basically keep your LLC in good standing, and in compliance … This is very serious stuff. Don’t take this lightly. If you do not file your annual report or whatever the requirement is in your state, your state will eventually dissolve AKA shut down your LLC. This is serious business.
Now I’m basically going to quickly go over … For the most part, everyone I’m about to mention is just a fee paid once every year. Now that due date is going to vary. It’s different by every single state. You’re going to have to click through to the website to read this table, because I don’t know if you can see this, but a lot of information. Let’s run for it. Alabama, $100. Alaska, $100. Arizona, $0. Arkansas, $150. California, $800 plus $20. Colorado, $10. Connecticut, $20. Delaware, $300. DC, $300. Florida, $140. Georgia, $50. Hawaii, $15. Idaho, nothing. Well actually, let me stop myself. Some states, even though you pay $0, some … A few states, you don’t have to pay anything or file anything, and those are the good states. Just a few of those. However, there’s a bunch of other states where even though you pay 0, you still have to file a report and some documentation. Again, full details on this table.
Idaho, $0. Illinois, $250. Indiana, $30. Iowa, $45. Kansas, $55. Kentucky, $15. Louisiana, $35. Maine, $85. Maryland, minimum $300. Massachusetts … Oh boy. $500. Massachusetts and California and Nevada are your big boys, wanting $500 and $800 in California. Massachusetts, $500. Michigan, $25. Minnesota, $0. Mississippi, $0. Missouri, $0. Three 0s in a row. Montana, $20. Nebraska, $10. Nevada, $500. New Hampshire, $100. New Jersey, $53. New Mexico, $0. New York, $9. Although New York does have a funny publication requirement. If you need details on that, we do have a video and a post on our website. Again, New York, $9. North Carolina, $200. North Dakota, $50. Ohio, $0. Oklahoma, $25. Oregon, $100. Pennsylvania, $70. However, it’s every 10 years. Again, most of these … I’m not reading off the due dates. Most of these are every year. Some of these are every two years.
Rhode Island, $50. South Carolina, $0. South Dakota, $50. Tennessee, minimum $300. It goes up based on the amount of members your LLC has. Texas, $0. Although they do have a franchise tax document that needs to be filed. Utah, $15. Vermont, $35. Virginia, $50. Washington state, $81. West Virginia, $25. Wisconsin, $25. Wyoming, $50. That’s fun, throwing papers on the floor like that.
Hope this video was helpful for you. If you want all the details about is it every year, is it every other year, is it due on my anniversary month, is it due in April, is it due in June, is it due in January, they’re all due at … It’s all crazy. I wish they would all just make it the same, but they’re all over the board. Hopefully, this is just a quick run through to let you get a feel for what the price is going to be on the annual state renewals that you have to pay every year to your state in order to keep your LLC in compliance and in existence. Hope this video is helpful. Talk to you soon.
I am looking to create 2 LLC’s. I am in CA but as you know CA is very expensive. Can we talk for quick 5 minutes so I pick the right one? If yes, pls suggest a time and no.
Hi Nitin, sure, we’d be happy to help. How about Friday between 10am – 1pm? If so, give me a ring on 800-241-9066. Thanks.
I have the same exact issue, From CA, creating an LLC. Want to file in a different state, or just looking for the cheapest way to file working out of CA.
Hi Cris, if you’re doing business in California, then it’s actually cheaper to just form the LLC in CA and pay the annual fee. Please see our best state article.
Doesn’t look like it’s cheaper based off the table….esp if you are forming a small business…
You’re right Lisbeth… just looking at the table, California certainly doesn’t look cheaper. But if you live and reside in California, it is cheaper to form an LLC in California instead of forming an LLC in another state and then having to register as a Foreign LLC. Plus, you’ll also have to pay for a Registered Agent in the other state, increasing the fees. Additionally, there could be tax consequences. We’ve explained all this in more detail on another page on our website: best state to form an LLC. Hope that helps!
Is it okay to ring you as well? I am very confused by the double LLC issue, especially if the LLC is basically a holding company and not revenue generating.
Hi Eunice, apologies, but at this time we receive too many inquires to offer phone support. Do you want to try leaving your question here?
May I call you? I have a complex question and the q & a doesn’t really cover it.
Thanks!
Hi Eunice, at this time we cannot offer phone support due to number of questions we receive across the website. Apologies about that. We may open phone support back up in the future. Anything I can help you figure out here though?
I would like to consider Arizona as my state to file my LLC.
CAN YOU PLEASE ADVISE ME ON LLC IN ARIZONA SINCETHOSE FEES SEEM TO BE THE LOWEST. THANK YOU.
Hi Gary, can you be more detailed in your question? I’m not 100% sure what you are asking. Thanks.
Hey Gary, if you reside in the US, I recommend checking out our other article to help you choose the state. Here’s the link: best state for LLC.
Hello,
I would like to set up an LLC , i will be doing consulting assignments (and not establishing an office/local presence in any particular state) so i have flexibility in choosing the state in which to incorporate.
Could you please advice which state to set up the company based on lowest filing cost and recurring annual fees.
Thanks in advance and best regards
Hi RD, if you are a US resident, that is incorrect. Just because you don’t have an office location and you do consulting, does not exempt you from state laws of “conducting intrastate business”. That’s a big misconceptions about LLCs. If you form an LLC out of state, you’ll be required to register that LLC as a Foreign LLC in your home state. Now you have 2 LLC filing fees and 2 Annual Reports (if applicable). Having said that, if you are a non-US resident, you can pick any state you’d like :) Popular options for non-US residents are to pick a state where you may actually do business in, a state you visit (to make opening a bank account easier), or a state where you have family and friends. If none of those apply, New Mexico, Delaware, and Wyoming are popular options for non-US residents. Hope that helps! Let me know if you need anything else.
…an interesting and useful discussion! I have also heard that if you are American citizen living abroad (non-US resident) but running a single member US Llc, the moment your entity elects s-corp status, then you must choose “some state” from which to run payroll. Is that actually the case, and if so, then how does one select a state such that state tax liabilities are reduced for both the Llc owner and the s-Corp Llc??? In such situations shouldn’t one run payroll from the state where the LLC was formed in order to reduce possible additional state registrations and annual report fees?
Hey John, excellent followup questions! In terms of where is best for S-Corp election and payroll, we don’t get too detailed on that, due to the nuances and variations with taxes. I recommend speaking with a few accountants. You might want to use this technique. Apologies I couldn’t be more specific.
Hi Matt. Thank you for your work. I also have a consulting business with no “brick and mortar” establishment (in TN) but I pay mild city and county taxes (something like under $10 apiece) to use the square footage of my old sunporch as a business office, and I note utility costs for the business as a % of space used in my federal taxes.
I’m considering moving it to TX where I currently live, but I’m not sure that’s the right choice. Your thoughts?
Hello,
I live in SC and am looking to buy a rental properties (up to 5 properties eventually) in MO. My question is, would I set up a MO LLC for each property? Could I also have another LLC, say for example, a NV LLC to own all the MO LLCs? Would the NV LLC have to register in MO as a foreign entity? Does this seem viable? Thanks.
Hey George, you can put each property in a MO LLC, or clump them together. MO LLCs are quite affordable, so one property per LLC is an option. MO LLCs also do not have Annual Reports. Yes, you can have an out-of-state LLC own the MO LLCs as a holding company. I saw your other comment on the Best State page (https://www.llcuniversity.com/best-state-to-form-an-llc/) re: charging order protection. In that case, I’d take a look at a Wyoming LLC owning your Missouri LLCs. If the out-of-state LLC is just holding the MO LLCs, it does not need to register as a Foreign LLC in MO. Hope that helps.
Hi Matt, I’m looking to form an LLC in Florida and I’m trying to decide if filing an LLC through Legal zoom or doing it myself would be more cost effective. I like the idea of legal zoom to save time but do they include all of my state and city filing fees into the overall cost? If so how much will that be? And going forward will I have to file my state and city fees on my own or does legal zoom handle all of this and you pay them a yearly or monthly fee for their service? Thanks you for all of your videos and everything you do. Is much appreciated, especially for all us start ups that are on a tight budget:)
Hey Talo, thank you for the kind words! When you say state and city fees (that could possibly be recurring), are you only talking about LLC fees? If so, there are no LLC fees paid to a city to form. You pay a one-time fee (not monthly or recurring) to the state. Might you be referring to taxes or something else? LegalZoom’s pricing includes the state filing fee. It’ll be more cost-effective to file yourself of course, but it does take more time, so it’s a trade off. Hope that helps! Let me know if you need anything else.
What happens of you miss the deadline to renew in the state of louisiana?
Hey Kim, each state has different penalties. Louisiana’s is as follows: if you do not file your Annual Report by your anniversary date, the state will mark your LLC as “not in good standing”. If you don’t file your Annual Report for 3 years, the state will administratively revoke (shut down) your LLC. Hope that helps.
I am looking to form a LLC in Michigan, but will be doing work outside of the state, more than likely in Indiana and Illinois, but the cost in Michgan is much less, do I have to file for LLC in those states as foreign being that my home office will be in Michigan? Thanks for the help, love the videos
Hi Jeromy, I’d form the LLC in MI to start, and then dig into what constitutes “doing business” in Indiana and Illinois. “Doing business” can be a bit gray at times, but here are the relevant statutes. Illinois: 805 ILCS 5/13.75 (2014). Indiana: Indiana Code 23-1-49-1 (2014). Hope that helps!
Hello Matt,
I will have 2 companies for buying, selling & renting property in 2 states; NJ & FL(to start). Should I LLC in both states ie., do I HAVE to? And/Or can I go with one of the cheaper states on your list, like PA, OH or AZ?
FYI last year I filed one of the companies in WY Feb 2016 but with job loss, haven’t even done the renewal/annual report yet this year. However, I do plan on rectifying fees, then discontinuing it there based on what you say.
Thanx
CKGOOD
I have not done business on either but am countering an offer for my 1st flip property in NJ & the 2nd here in FL. As well, I moved here from NJ to FL July 2016. I just watched your ‘best state’ video so thanx. However, should I file in FL as domestic “AND” in NJ as foreign or “ONLY” in FL is fine?
So Confused!
Thanx for your help in advance!
Hey CKGOOD, since you’re doing business in NY and FL, you can either form a domestic LLC in both states, or form a FL LLC and register it is a Foreign LLC in NJ. Hope that helps!
Hey CKGOOD, when engaging in real estate investing, you are legally doing business in that state, so you are supposed to form the LLC in the state where the property is located. A more advanced option is to form an LLC in a state with stronger asset protection (like Wyoming), then have your Wyoming LLC own both your NJ LLC and your FL LLC.
Hi Matt,
Thanks for posting this. I am asked to do a corp-to-corp with a company in Indiana. I live in IL (close to the boarder). Should I form in IL or IN? IN looks much cheaper.
Thank You in advance.
Thomas
Hi Thomas, if you’re living in, doing business out of, and paying states taxes in Illinois, you’re supposed to form your LLC there. Forming in Indiana instead is a bit gray, but is done by some. By the books though, and what we recommend, is to form in the state where you are actually doing business. From what you’ve provided, it sounds like you’re doing business out of Illinois. Don’t ask us why their fees are so high. I know it’s a bummer :(
If anyone else is reading this, a “corp-to-corp LLC” (or other entity type), is when an employer offers (or prefers) to pay your LLC instead of you personally. This allows them to pay you as an independent contractor (reported on a 1099) instead of an employee (reported on a W2).
Very helpful post! Thank you! I have a website that I want to make an LLC for personal asset protection. I live in California, but that $800 annual fee is really high for how much revenue my site generates. Can I form in, say, Arizona and avoid the California annual fee? Or would I end up having to pay the California fees anyway?
You’re very welcome Leah! I hear you… the cost of doing business in California is high, but sounds to me like you are doing business there, so yes, you’d end up paying the CA fees anyway. It’ll actually cost you more if you form out of state, since you’ll then be required to file a Foreign LLC in California, as well as fees in the formation state, and possible Registered Agent fees in the formation state as well. I recommend these two articles as followups for more information: Domestic LLC vs Foreign LLC and what is doing business in California. Hope that helps! Let me know if you need anything else.
Hi, Matt:
We live in CA, we have 7 rental properties total, 2 in CA, 2 in FL, 2 in AZ and 1 in NV, my question is can we just register 1 LLC in CA and put all 7 properties under it? we have 5 million umbrella insurance besides 300K insurance for the individual properties. Is that any law that we have to set up a LLC in the state where the rental property locates. I know it might be the best way to do it to diversify the risk but are we required to do so . we do the LLC for the benefit of the tax pass through . Thanks a lot
Hi Shelly, you’re likely legally doing business in FL, AZ, and NV (and CA of course). So you either need to form an LLC in California and then register as a Foreign LLC in each state, or form Domestic LLCs in FL, AZ, and NV and have them be owned by your California LLC. Keep in mind though, you’d need to setup all your LLCs first, then retitle each property. Here’s two related articles: Domestic LLC vs Foreign LLC and when to form an LLC for real estate investing. Hope that helps.
Hello Matt,
I’m from Sri Lanka & a non-USA resident .
I need to start an eCommerce site. Without EIN how I supposed to pay sales taxes?
What is the suitable state, which has the lower annual maintaining cost, when registration of an LLC is compulsory?
Thanks for publishing this article.
Hey Autumn, you can obtain an EIN, even if you don’t have a US social security number, by mailing or faxing (we recommend fax) Form SS-4 to the IRS and on line 7B write “Foreign”. But make sure only to apply for the EIN after your LLC has been approved. Regarding which state is best, we’re unable to tell you which exact one to go with, but most of our international filers choose the state in the US where they are actually doing business. If they are not physically doing business in any US state, Delaware and Wyoming are popular choices for non-US citizens and non-US residents. Delaware is $90 to form, then $300 every year. Wyoming is $100 to form, then $50 every year. I hope that helps!
Hello Matt,
I will not be presenting physically in Wyoming, in the immediate future. I’m writing from Sri Lanka.
Can I register my business as a LLC , remotely?
Can I pay taxes to IRS remotely?
Regards.
Hi Autumn, yes, you can. You can register the Wyoming LLC remotely. They have online filing. And yes, most taxes can be paid electronically, but you’ll want to double-check with an accountant, just to be sure. Hope that helps.
Aloha Matt! I am looking at starting an LLC staffing company here in Hawaii. I know that I will be moving next year, I am not sure to which state yet. I know I can move my LLC by filling out a foreign LLC form. Which state will I have to pay (if any) annual fees to? Thanks!
Aloha Chris! There are actually 3 ways to move an LLC (depending on the state), but the 2 most common are to dissolve the Hawaii LLC and then form a new LLC in the new state. The second option is to register your Hawaii LLC as a Foreign LLC in the state. If you file a Foreign LLC registration, you still have to remain in good standing in Hawaii and keep the Hawaii LLC active… meaning, you’ll pay Annual Report fees in both states, and depending on what your accountant says, you may need to file a state-level tax return with the Hawaii Department of Taxation and apportion your income to your new state. Hope that helps a bit. I know it’s a little complicated. Feel free to send us an email and leave your phone number. I can explain better by phone if that’s helpful.
Hi Sir,
I am a physician working as an independent contractor, payment via 1099. I am working in Illinois currently. I want to set up an LLC however I will be remaining in IL for another 2 months then moving to PA. I would like to take advantage of the tax benefit for those 2 months without paying double fees. I have an address in PA, can I set up in PA and use the EIN to get paid for the 2 months then move to PA. Essentially make the PA LLC and provide services in IL. It’s a consulting service, I provide medical care. Please let me know. Thanks
Hi Jay, in your situation, I’d setup the Pennsylvania LLC. Having a PA LLC does not prevent you from engaging with clients in other states. Are you required to be licensed by the state to provide this medical care? If so, and depending on PA’s laws, you may need to form a Professional LLC (PLLC) instead of a “regular” LLC.
Besides Wyoming, Delaware, and New Mexico are there any other states that an Anonymous/Invisible LLC can be form?
Hi Paul, yes, there are a few, but we don’t have them listed out yet and I don’t have them memorized. This is a good idea for an article we are considering. Thank you.
What is an anonymous/invisible LLC?
It’s where the owner’s names are not publicly accessible.
good morning, i’m looking into forming an LLC for investment in Asia. I’ll be investing in existing businesses, and i expect to receive profits/returns from those businesses into my LLC. I reside in California, but looking into forming the LLC in Delaware or Nevada. Since I am not conducting business in California, i presume i don’t have to file a foreign LLC in California? Thank you
Hi Andy, just by residing in California, an out of state LLC would still be doing business in California, so that LLC would need to be registered as a Foreign LLC in California. Or you could just form a domestic LLC in California. Hope that helps.
(related article: domestic LLC vs foreign LLC)
thank you!
You’re welcome Andy!
I have an online business where I provide webdesigning, seo, website promotion, social marketing etc business, I am located in India, I want to setup an LLC in USA, can you suggest me the best and most economical place to start the LLC, I will be operating the business from India, I wont be working in the US. All my work is delivered through email and online.
Hi Anand, we cannot pin-point an exact state for you, but most of the foreigners we work with form their LLC in Wyoming, Delaware, or New Mexico.
Thank you very much. Do you help in forming an LLC and maintaining the legal formalities everyyear?
Hi Anand, we can form the LLC for you, and help you obtain an EIN from the IRS (if you need it for banking). We do not offer annual reports as a service yet, but we provide clear instructions in your Client File. You can learn more about our filing services here.
Do you know anything about self directed IRA’s and LLC’s.. specifically… how does the Franchise Tax in Texas effect that… since IRA’s pay zero Tax. Wondering what state I should set up my SDIRA LLC in?
Hi David, we do. If you’re purchasing an asset, such as real estate, it’s best to form your IRA/LLC in the state where the asset is located. If not, it’s generally advisable to form the IRA/LLC in the state where you reside. Since the LLC is owned by your IRA (more specifically, your custodian for your benefit) and your LLC is its own entity, it’ll still need to file the franchise tax report.
Hi pls I live in Nigeria and i want do Dropshipping business using bigcommerse to sell the product online in USA. Therefore I need to register my business as llc in order yo run this business.
Pls what is your advise. Tanks
Hi Abdulrashid, there are no us-citizenship or us-residency requirements to forming an LLC in the US. If you have a friend or family member located in the US, that state may be a good option. If you don’t know anyone in the US, the 2 most popular states we see foreigners using are Wyoming ($100 to form/$50 per year) and Delaware ($90 to form/$300 per year). You’ll need the services of a Registered Agent in order to get a street address in either state. We offer these services and we also have recommendations on other companies as well. Since this comment section is not that large, I can send you more information if you send us an email here.
Hi Matt,
I was googling for information on LLC and found your article very useful. I have some questions however. Currently I already have incorporated a LLC in Delaware, which I used for doing ecommerce online, by the way I am a non-US resident. However I missed the deadline for paying the tax (June 01) and if I am to pay the tax now, it will cost me an extra penalty of $200, which sum up to $500+. The cost is too expensive and I am looking to change the LLC to another state. Can I do this? Can I just ignore the tax and let the Delaware state removed the current LLC from their records? Or do I need to approach the Delaware state and send in a request to remove this current LLC from their records? I would then like to incorporate this LLC (with the same name) in another state with a lower yearly maintenance tax cost. Is this legally allowed? I see that you mentioned “New Mexico, Delaware, and Wyoming are popular options for non-US residents” in your replies above. Also, when I incorporated a LLC in a state, can I have the mailing address (for sending and receiving some parcels and letters for the LLC) in another state? Or I need the mailing address to be in the same state? Thanks for the advise.. :)
Hey Mattew, with Delaware, it’s best practice not to let the LLC just sit, as it will accrue penalties and interest. The tax is $300 per year, the penalty is $200 per year, and the 1.5% monthly interest comes out to about $90 per year. If you let the LLC just sit, after 3 years, the state will revoke the LLC and the $1,770 becomes a debt owed to the state. The state has the right to collect this debt. There is some ambiguity as to how that debt is collected and if it actually does get collected, but again, the state has the legal right to settle the debt.
The cleaner way to do things, is to file an LLC Dissolution (instructions here). The Dissolution itself is $200, plus you have to pay any unpaid franchise tax + penalties (so roughly $700 total in your case).
You can certainly form an LLC in another state (with the same name), but this is not “changing” or “moving” the LLC. It’s simply shutting down one legal entity in Delaware and forming another legal entity in another state. And yes, this is legal.
I recommend considering forming the new LLC under a slightly different (or completely different) name. This will help you keep things more organized when it comes to logistics and paperwork.
In most states, the only “in state” address that is needed will be the Registered Agent address. Your mailing address can be located in any state. The Registered Agent address will be used for legal and court mail, called Service of Process (and hopefully you don’t get a lot of that). The mailing address is where parcels and letters for your LLC will be sent.
p.s. The proper verb to use is “form” an LLC, not “incorporate”. Incorporate means to form a Corporation.
Hope that helps. Let me know if you have any followup questions.
Hi Matt,
Thanks for the informative article. I am looking to form a LLC but my situation is a little complicated. I am currently based in California but moving to Arizona in 2 months. I will be in Arizona for 2 months and then travelling through 5 states in the next 6 months and then back to Arizona but not indefinitely. I am in e commerce. Where would you suggest I form my LLC in?
Hey Usha, are you a California resident, with a California driver’s license, and do you pay state taxes in California? Also, after these upcoming travels and time in Arizona, will you be returning to California? If you’re a resident of California, will you be keeping that state as your residency even while spending time in Arizona?
Hey Matt, Thanks for responding. Yes I am a California resident till May this year, no drivers license, not US citizen but PR and yes I pay state taxes in California. I wont be returning to California after my Arizona travels. Any advice?
Hi Usha, I would suggest waiting until you establish your next state of residency before forming an LLC, then establish the LLC in the new state where you will reside after moving out of California. California is very strict about “doing business” in CA and is known for imposing the $800 annual franchise tax if you’re running an out-of-state LLC from California (and even if just for a few months). For more details on how strict California is about “doing business” in the state, please see my reply to Josh’s comment on this page. So if you can wait to form your LLC, wait. If not, consider forming the LLC in the new state and registering as a Foreign LLC in California, paying the annual franchise tax and any other fees/tax filings, then later cancelling your Foreign LLC registration in California after you setup residency in the next state (and cut all ties from California). Hope that helps.
Hi there. I want to form a LLC. My business is mainly consulting as I’m a business coach. I won’t have a office. I currently live in New Jersey and want to know if I can form a LLC in another state that is cheaper or do I have to form in NJ. Most of business will be done in NJ.
Thanks
Hi Ilsy, although you don’t have an office, you’ll likely be working from home, or somewhere from New Jersey. In that case, you are legally doing business in New Jersey, and you should form your LLC there. Forming an LLC out of state to save money could end up being much more expensive, as you’ll need to file a Foreign LLC registration in New Jersey and you’ll be paying LLC fees (and annual fees) in 2 states. We wrote more details about this here.
Hi, I want to form an LLC to transfer a vacation home in KY to leave it to my children and grandchildren. I see that the annual fee in KY is now $175/year. I am wondering that since my LLC is not really going to do business nor creating income, maybe I should form it in another state that has a lower or zero annual fee, and let it own the property in KY. I’m not sure though, can you please explain further? You can email me too. Thanks.
Hi Joe, if you want to pass a property onto children and grandchildren, we recommend speaking with an estate lawyer. The LLC certainly provides liability protection, but you may want to couple it with a trust for example, in order to help mitigate taxes. Regarding filing out of state, if the property is not generating revenue, you should be okay to hold title in an out-of-state LLC (since the LLC is not “doing business” in KY), but you’ll need to speak with an attorney to confirm this as the “doing business” laws can be a bit ambiguous and open-ended… and they vary from state to state. Apologies we couldn’t be more specific here, but I hope that helps a bit.
Hey Matt – thanks for the excellent article.
You’re welcome Dave!
Thank you for answering my question with your chart! It looks like you’ve helped many people- great!
You’re welcome Mary!
Hi,
First of all, thanks for all the great advice!
I am a non US resident and looking to open an LLC in Delaware or Arizona.
My main purpose (online payment gateway) does not require me to travel to that state for business. The only thing I need is a bank account.
I travel to california often and could i open the bank account on behalf of the company in California or would I need to travel to Delaware/Arizona for that purspose?
Hi Ramit, in order to open a Delaware or Arizona bank account from California, first, make sure your desired bank has locations in both states. Then call the location you would go to in California and ask them about opening a Delaware or Arizona account from their California branch office. Let them know that you formed an LLC in either Delaware or Arizona. Hope that helps.
If the properties are out of USA and not generating any revenue for the time being, would I pay taxes for these if I register llc in New Mexico for example and register these properties under this llc?
Thanks a bunch :-)
Hi Jeff, I’m not 100% sure on this one. Please speak with an accountant.
Hey there Matt, I already have a California based LLC for one of my businesses. I am also doing income properties out in PA and wanted to have such properties and business actions separate within it’s own LLC. Would I be setting up a PA LLC and since a large majority of business is done in that state, would I not have to register that LLC in CA?
Hey Robert, you are correct. Since you are doing business in Pennsylvania, you’d form a Pennsylvania LLC. Rule of thumb for real estate LLCs is to form the LLC where the property is located.
Hey Matt, i formed an LLC in NYS as i was planning to buy a rental property.I bought an investment property but have not put it under the LLC yet..Are there any fees i have to pay yearly? The LLC has not made any income yet..
Hey Ray, did you take care of the newspaper publication requirement? The Certificate of Publication with the state will cost you $50 and then there will be the newspaper fees. The ongoing costs for your LLC in NYS will be the Biennial Statement, which is $9 and it’s due every 2 years by the end of your LLC’s anniversary month. You’ll also need to take care of your taxes (federal, state, and local).
Hello Matt,
My wife and i bought a vacation rental in North Carolina, but live in Vermont. Would it benefit us more to start the LLC here in our home state or In the State the property is located in? WE do hope to add other properties in this state and possibly other’s, so with the future in mind would it be better to set it up in another state and have them own the other LLC’S as we purchase additional properties? Thank you for help.
Hi Lenny, for real estate LLCs, you should form the LLC in the same state where the property is located. The reason why is that is the jurisdiction where you are legally doing business. In your case, that means to form the LLC(s) in North Carolina. Another option as your portfolio grows is to form a parent LLC, and then have that LLC own each of the real estate LLCs. The parent LLC is just a holding company so it will not legally be doing business in any state. Therefore, the state you choose for the parent company is flexible. Hope that helps :)
Thank you very much for your help!
You’re welcome Lenny!
Hi Matt. I currently live in two states and plan to conduct business from my computer. I could be in one state or another depending on the day of the week. Does it matter where I should operate an LLC?
Hi Dorian, what are the two states? Which state is technically your residence and what state do you file taxes in? Do you own property in either state?
my residence is fl. i work in fl but i also live in in a house in ga on weekends where my wife reside. she owns the house in ga
I could do business in either place since I am mobile.
Hey Dorian, in your case, you can pick either state you’d like. Won’t make much of a difference. Hope that helps!
Hi there, I am a foreing person, with no residence or citicenship in USA; but have my sister living there in Misisipi.
Nowadays I live in Argentina where I have my company, i import my own products from China and sell them to wholsellers from all over my country.
I would like to stablish my LLC in USA , through with i can receive products from China ( Import in USA) and distibute them in different states where they would be require.
Should I open a single person LLC, with my sister? is there any state better to submit an LLC for importing ( near a port) hope my doubt can be replied.
Thank you!
Hi Yanina, I don’t work in import/export, so I’m not 100% sure if Mississippi is the best state for your. If you are doing a lot of business in a port state, you may need to register your Mississippi LLC in that state as what’s called a Foreign LLC. That’s common though and not a big deal. It might be a good idea to form the LLC in Mississippi and have your sister serve as the LLC’s Registered Agent (that will save some money). You can make your sister a member of the LLC if she’s working helping in the business, but you don’t have to.
Hi Matt,
I live in Texas, and want to start an LLC here. I was looking at the table you provided, and I am just a bit confused. In the second column it says that there is not an annual fee, but in the third column, it says “Annual, May 15th.” Could you please clarify this for me? Thanks.
Hi Nancy, there is only an annual fee due if your gross receipts are over $1M. You still need to file a franchise tax report (likely zeroed out) and a public information report (PIR) each year, hence the due date. Hope that helps!
Hello Matt, I came across your video while trying to conduct research on forming an LLC for Uber/Lyft. I live in California and know nothing/can’t find anything about forming an LLC for uber/lyft, can you point me in the right direction and/or provide me with information? Thanks in advance.
Hi Tony, I sent an email to Lyft for instructions so I’ll let you know when I hear back. I could not find a contact form for Uber. After you form your LLC and obtain a Federal Tax ID Number, I would imagine you’d need to update your driver accounts to show the reflection of the new LLC name and Tax ID Number (as opposed to reporting via your SSN). Do you have a phone number you can call as an Uber driver? I’d be curious to hear what you come up with.
Hey Tony, I heard back Lyft support. You’ll need to send them a new W9 with your LLC info and EIN. Shoot us a message if you need help with the W9 after your LLC is formed. We’ll be working on a Lyft/Uber guide soon. So I’ll let you know when it’s out. In the meantime, hit me up if you hear back from Uber. I still haven’t found a way to email them yet.
Hi Matt, I am in CO, though a resident of a different state. I want to start online sales/ fulfillment. I have a non-US family investor, but would like to form SMLLC. This is going to be my first business and I am reading everywhere of the legal protection issues with SMLLC. Would it be enough to form SMLLC in CO? Would it be smarter to form a parent SMLLC in WY and sub in CO? Holding SMLLC in WY and operating one in CO? Another factor: I will be moving out of CO in a couple years and then again and again. I want to make it right for the long run. I understand there is cost coming with filing in more than one statE. Thank you!
Hey Theresa, great questions. The whole LLC owned by you vs. LLC owned by another LLC, then owned by you is a tough one. As in, the answer is not black and white. The WY LLC as parent company is a strong setup, but many attorneys feel it’s overkill. I sway one way or the other depending on the specifics of the situation and the organization/intellectual abilities of the owner. You could go either way… straight CO LLC, or WY LLC owning your CO LLC. I don’t think either setup is “wrong”. You could also consider just a straight WY LLC in your case as well. Apologies I couldn’t pinpoint the answer more specifically for you.
Another question: if I go manager-managered SMLLC, and hire myself as the manager, I become employed, right? I can’t be taxed as disregarded entity( sole proprietor)? Do I have to choose to be taxed as S-corporation? Thank you once again.
No, not necessarily. Just being a Manager of an LLC does not mean you are employed. Employed means you received payroll from the LLC and a W2. It doesn’t matter how the LLC is managed (Manager-managed or Member-managed), you’ll still be taxed as a Disregarded Entity/Sole Proprietorship, since the LLC still just has one owner (unless you file/elect to be taxed as an S-Corp or C-Corp). You don’t HAVE TO elect S-Corp tax status though. That’s completely optional. I like the SMLLC Manager-Managed setup as it adds a tad more privacy… and I think it sounds more bad ass to be the Manager instead of a Member (but that’s a minor detail).
Hi Matt,
I live in Massachusetts and I wanted to create a self-directed IRA with an LLC to invest (trade) in cryptocurrencies (bitcoin, etc.). The trades will be done through exchanges. Do I need to form the LLC in my home state? Could I do that in other states?
Thanks.
Hi George, sounds like a great setup. Regarding legally “doing business” in Mass., this is a bit gray, and I cannot locate a clear answer in the statutes. Technically, you are likely doing business in Massachusetts, but I’m not sure how risky it would be to form and out-of-state LLC and not register it as a Foreign LLC in Mass. Feel free to use our “knights of the roundtable” strategy and phone a few attorneys. I’d love to hear what you come up with, so feel free to keep me posted. Apologies I couldn’t give you a more clear-cut answer.
im non residence, I want to setup llc in Idaho , and start my small business.
its a good option to do that !
Regards
Hi Ahmad, as a non-resident, you can pick any state you’d like. Best wishes with the business!
For Nevada LLC I saw through legalzoom that capital gains is not taxed. I have a home in MA that was sold and I did not have any homestead exemption claim. Can I start an LLC in Nevada and claim the sale of home under the LLC to bypass capital gains tax for a home outside of Nevada?
and thanks again for being so proactive in answering questions! Much appreciated!
You’re welcome Carla! And thank you for acknowledging :)
Hi Carla, please run this by an accountant or two to double-check, but I doubt it. First, the home was already sold. Second, it was sold in your name. Forming an LLC to “retro sell” the home will not fly. And third, the statement regarding capital gains tax may only apply to assets located in Nevada. Hope that helps.
If I form an LLC the beginning of the year. When do I need to pay the renewal. Looks like it says May is when the renewal is needed yearly. Florida. * I believe that if I form the LLC now then I will for sure have to renew in May is that also correct?
Hi Latasha, if you form the Florida LLC in 2017, then your first LLC Annual Report will be due between January 1st and May 1st of 2018. Hope that helps.
Hello Matt,
My sister, my wife and me are starting a business. While we live in California, my sister does so in Texas.
The business will operate in California. Given this my inclination is to do a CA LLC. What is the impact for my sister? I am not clear as to what she would need to do since she lives in Texas and her full time job is in Texas.
Also does it mean that she would need to file a CA tax return every year? In a addition to what she normally does in TX? – federal that is since there so no state income tax there.
Thanks
Hey Jorge, since you are doing business in California, I would form the LLC there. Yes, you’ll need to file a CA tax return, and all members may need to as well. I recommend speaking with an accountant about your sister’s situation, as there is a chance she may need to file a return in CA as well, but I’m not 100% sure. Apologies I couldn’t be more specific.
Hello Matt,
I am a Member in a LLC (A) which is a 25% member in another LLC (B). That LLC owns an investment property in CA. If I am a resident of NY and so are all the members of LLC (A) do I need to open the LLC (A) in CA or NY? Also, Would LLC (A) be filing a CA return or only the actual LLC (B) which owns the property?
Hey Eli, “LLC B” should be formed in California since that’s where the business is taking place and legally operating. “LLC A” could probably be opened in CA or NY, but it seems best to keep it in NY, since that’s where you and your business partners are doing business from (phone calls, meetings, computer work, etc.) As to whether or not “LLC A” (or the members of LLC A) owe any returns to the CA Franchise Tax Board, I cannot say, and I honestly do not know. We are not able to offer tax advice as there is far too much variance among businesses and their owners, as well as a multitude of differences in ways the business (and its members) can file. I recommend applying our “knights of the roundtable” strategy and making a few phone calls. Apologies I couldn’t be more specific. I’m curious to hear what you come up with though, so feel free to send an update if you’d like.
Hello Matt:
I currently live in Florida and will be purchasing Tax Deeds in Florida. In a couple of years, I plan to full-time RV and may purchase Tax Deeds in other states. Should I create my initial LLC in Florida where I plan to purchase Tax Deeds for the next couple of years and then create an LLC in Wyoming as a parent LLC for properties purchased in other states?
Hey Rae, I think that is an excellent setup! To keep things consistent, I’d actual create your Wyoming LLC first, then form an LLC in Florida (owned by your Wyoming LLC). This way, your structure and organization will all be consistent from the start. Hope that helps!
what about for an over the road trucker I live in Ma but i operate in lower 48 states do I have to form my llc in Ma or can I form it in any state?
Hey Alex, I’d form your LLC in the state where you hold your CDL, so if that’s Mass., then forming there will be best. Hope that helps!
I’m planning a online retail store. I see that Nevada is a popular LLC state choice. But when I look at the the state chart , it says $500 annual fee. New Mexico has no annual fee. So which is better to save money?
Thanks
Hey Charles, it’s best to form your LLC in the state where you are doing business from, which is likely your home state. We have more info on this here: best state to form an LLC. Hope that helps.
Hey there,
I am forming a domestic LLC in Mass, the filing fee is $500. The annual fee is also $500. if i create this LLC in December does that mean i have to pay the annual fee for both 2017 and 2018? I see it says anniversary month so does that mean it would be due before December of 2018? Let me know!
Thanks,
Rob
Hey Rob, if your Massachusetts LLC is approved in December of 2017 (say 12/15, for example), your first first Annual Report is not due until that same day (12/15) of 2018… so no, you won’t file an Annual Report in 2017. Hope that helps!
Matt,
Great!
Thanks for the help!
You’re welcome Robert!
Hi,
What if I am starting an online business and will be doing business mainly. Would I still be required to register in my state or can I register in another state? Technically I will be doing business in several states, right?
Thank you for your help and insight on this?
Hey Chrissy, it comes down to where you are legally doing business. And it doesn’t matter where your customers/clients are located, or if you have an online business (so many businesses are online businesses these days)… it has to do with where you are running/working/operating/managing the LLC from. For most people, this will be the state where they live and legally reside, especially for those running online businesses from their home. Hope that helps add some context to the situation. Let me know if you have any followup questions.
First Thanks Matt for your help!
I am planning to set-up an LLC for my consulting on analytics and data science and would like to know which state is more advantageous in term of taxes “Tax haven”. I heard Wyoming is one of the best place to register an LLC. I am a Florida resident and wondering if it still advantageous to register my LLC in Wyoming or any other “Tax haven” states.
Thanks,
YM
Hey Yve, you’re welcome! Thanks for the nice comment. I actually recommend forming the LLC in Florida, where you reside and will legally be doing business. Taxes are paid where the money is made, so even if you form an LLC in Wyoming, you’d have to file a tax return in Wyoming and apportion the income to Florida. On a positive note though regarding Florida, Florida has no personal income tax, so again, you’re likely better off just forming in your home state. We’ve expanded upon this here: best state to form an LLC. Hope that helps!
Hey Matt, I have an llc and it just seems like there are more and more surprises of fees and stuff and I really want to be on top of my stuff so i wanted to know if you could please find time to help me figure this out.
Thank you!
Hey Cameron, what kind of questions do you have about fees? What fees are you referring to?
Hello, I’m planning to file an LLC in Michigan and I see from the table the filing fee is $50 and the annual fee is $25. Is there another cost to create the LLC or is it simply just the $50 then the fee to renew it annually.
Hi Christopher, nope, there is no other cost. Just $50 to file the Articles of Organization, then $25 every year. Once the Articles of Organization is approved by the Corporations Division, the LLC is “born”. Hope that helps!
I am a physician and do contract work in NV. I live in AZ and travel to NV to work.
There is always the chance I will contract in other states.
I have contemplated starting a NV vs AZ LLC. But this has been a very confusing decision. Here are the issues I have been grappling with.
1) Operating costs to do this in nevada appear much greater. AZ apparently has no annual fee and requires no annual report.
2) If i do an LLC in AZ but am working out of NV (or other state) would i have to also register a foreign corporation in NV (and other states) as well? If that is the case i’m forced to do NV now regardless.
3) If using the LLC a pass through entity (S designation) do I pay taxes in AZ at the corporate rate or lower individual rate?
4) If i did move to nevada later how hard is it to move the LLC to nevada? Part of the reason I was also considering NV was pre emptivly puting it there just in case I moved later – since I travel a lot.
Thanks for all the great information you’ve posted here.
Hi Tim, I hear you. Deciding on something like this requires a good deal of thinking and strategy. 1. You’re correct, AZ is much cheaper than NV. 2. This likely won’t be the case. You should be okay operating your AZ LLC for your contract work in NV. However, there could be some document in your line of work that requires some “NV specific” piece of info, and then that changes thing. You may want to speak with the company who hires you about this. 3. You’ll need to speak with an accountant on this. We can’t provide tax info. 4. It’s kind of a pain to be honest. You can either register as a foreign LLC, dissolve the AZ LLC and form a new NV LLC, or redomesticate (move) the LLC.
I live in the state of WA. I was thinking about creating an LLC in order to create and publish apps for mobile phones. Gazillions of people do it, so I though I give it a try. I was reading the pros and cons online about publishing apps under your name vs a company name, so I decided to maybe setup an LLC. However, I’m not sure about the accuracy of the information. On this website, I see that the filing fee for WA is $180 and the annual fee is $81. I was just reading the PDF application form and it states that trade name registration is $5, and filing fee is $19. How an earth did you get $180 out of this!? Plus, I have to renew this every year for 81 bucks!? I do not understand how (not to mention WHY) people would do this? I wanted to publish mostly free apps. So for free apps, I have to work to create them, then publish them for free, and on top of it, I have to pay $180 registration and $81 per year to publish free works? WHOA! Why so many developers do this? What is the secret sauce that I do not understand, but “they” do? Why is it worth for some people to publish free apps under an LLC (or whatever company) but it cost them a chunk of money to do that? (…now I’m rolling my eyes big time…)
Hi Greg, you’ve confused a Trade Name (DBA) with an LLC. They are not the same thing. Just because something is free doesn’t mean it’s not monetized another way. Try googling “how to monetize free apps”. Advertising is a common method, and there are a few other examples as well. Hope that helps.
Thanks for the reply, Matt. It is not possible to publish an app in the app stores (Apple/Google) using a DBA. It either has to be a company with a DUN number or your personal name. So even the “free” app developers apparently using a company name (with a DUN number). And that seems to be the ONLY way to publish apps – provided you don’t want your name and home address to be published to the world. And that is what I found to be a lot of “overhead”. Filing for LLC, renew it each year, on top of it renewing the Apple developer account each year, plus possible taxation on your LLC even if you don’t make a dime. That’s a bare minimum of 200 bucks a year. If your LLC is taxed even on zero revenue (so I’ve read), then depending on this tax, you have to make at least $300 (plus LLC taxation value) in order to break even on the “free” app (…app stores take a percent of your profit…). Of course if people don’t have the problem publishing their name and home address to the world, then there’s no issue. :-) However, I rarely see a person’s name on the app store, so apparently people are full of dough.
Hi Greg, I see what you’re saying. Welcome to the world of business :)
Hello, Matt!
If someone is a single owner LLC company in Wisconsin, can you create a subsidiary based in Texas or does the subsidiary LLC have to be based in the same state as the main company?
Thank you very much.
-f
Hi Frances, a parent company in Wisconsin (regardless of whether it’s single-member or multi-member) can own an LLC (child LLC) in any state. They do not have to be in the same state. However, usually in a parent-child LLC relationship, the parent LLC is just a holding company and it is not legally doing business in the state in which it’s setup. But the child LLC is doing business, so the child LLC should be formed in the state where business is being done (or the state where the property is located if you’re a real estate investor). Hope that helps.
Hi Matt,
As a real estate investor, If there are multiple properties in a state different from where the business was originally formed, Can each of those properties be a separate Child LLC of the Parent (original)? Also, are the liabilities of each Child LLC limited to only that Child? Or is the Parent LLC also responsible for the liabilities of each child llc? thanks!
Hi Lisha, yes, each of your LLCs can be owned by another LLC (the “parent” LLC). You’ll want to make sure that your child LLCs are formed in the state where the property is located since that’s where the companies are legally doing business. And yes, if set up correctly, the liabilities of each child LLC are limited to that child LLC. The other child LLCs and the parent LLC should not be affected. This isn’t 100% ironclad though. There is always a slight chance that a corporate veil (or in this case, veils) could be pierced, but it is not common. Hope that helps.
Hi Matt,
what state would you recommend to incorporate a company that is holding shares of European company. Except of holding these shares the company will be fully dormant. There will never be any dividends distributed from the European company to the US company. Involving a US company is only a work-around to make my son (6 years old) legally a shareholder.
I was thinking of New Mexico LLC as there are no annual fees. Any better alternative?
Thanks
Mike
Hey Mike, I wish I knew the precise answer to this one, but I’m not sure as we don’t provide information and research on holding companies for the use of their holding assets being overseas. I recommend speaking with a few attorneys and accountants for more information. Feel free to keep us updated if you’d like. I’m curious to hear what you come up with. Having said that, I’d also look at Wyoming. There is an annual fee, but it’s just $50 per year. Hope that helps.
Hi Matt,
I have an LLC in NV. Do have to renew or pay a fee if I want to dissolve the LLC?
Thank you,
Sharon
Hi Sharon, yes, at the time of this reply, the cost to dissolve a Nevada LLC is $100. You’ll need to file an Articles of Dissolution and Customer Order Instructions with the Nevada Secretary of State. You can find the forms on this page: NV SOS business forms. Look for “Articles of Dissolution for a Nevada Limited-Liability Company (NRS 86.531)” under the “Withdrawal/Dissolution” section and download the “complete packet”, which includes instructions. Hope that helps!
Thank you very much for that information!
Sharon
hi Matt. IMx not usa citizen . whould you tell me which state LLC doesnt have 1. franchise tax 2. income tax 3. annual report. thanks in advance
Hi Vasif, the states with no Annual Report are listed on this page. We cannot advise on franchise tax and income tax. You’ll need to speak with an accountant about your business and your situation.
Hi Matt,
I live in NH, and i plan on starting a consulting business online, all my clients will be web based (i might visit a few of them physically) but rest of the correspondence and consulting will be e-based.
Do i need to file LLC in NH? How about if i file it in MA? Since i will be doing businesses nationwide, do i need to file LLC in all states?
Hi Tamoor, “doing business” is not about where your clients are, but more so about where you are working from. If you’re living and running the business from New Hampshire, than that is where you are legally doing business and that’s the state where you should form an LLC. Hope that helps.
Hi
I currently own a business under a sole proprietorship in Pennsylvania. I want to file for an LLC for the business but am moving to Georgia in July (and taking the business with me) Does it benefit me to do the LLC now while I am in PA or wait until I am in Georgia? Also, which statewould be more beneficial to file for the LLC in? Thanks in advance for your advice!
Hey Chuck, if you’re moving to Georgia and will reside and do business from there, it’ll be best (and easiest) to wait until you’re in Georgia and then form a Georgia LLC.
As an example, if you didn’t do that and instead you formed a Domestic Pennsylvania LLC, you’d later have to either, 1.) Dissolve the PA LLC and form a GA LLC or 2.) Register the PA LLC as a Foreign LLC in GA. Note: some states allow for a conversion (also called “redomestication”) where you’d “move and convert” the existing Domestic PA LLC to a Domestic GA LLC, but Georgia doesn’t have laws for redomestication of LLCs. So… having said all that, both #1 and #2 are tedious, time consuming, and likely to lead to clerical errors/issues… so again, I’d wait. Hope that helps :)
Hi Matt
Thank you for the insight! My decision is made and we will gladly pay for your company do the legwork for us. Looking forward to working with you.
Chuck
Hi Chuck, thank you for the kind words, but we don’t offer filing services at this time. Instead, we have a free course that will show you how to form your Georgia LLC yourself. It’s in the link to my first reply. Hope that helps.
Hi there
Odd question for you. I’m an American citizen with permanent residence in Virginia, yet temporarily residing in NYS. My significant other is a foreign diplomat, so we move every 3 years or so. My drivers license and federal taxes have been from a Virginia address for years.
I do some business consulting work on the side (all done remotely from wherever I happen to be that day) and exploring the LLC as a more permanent entity. So the question is VA, NYS, or Delaware?
Interesting scenario Sam. It really comes down to where you are substantially doing more business. I’d lean towards towards Virginia, but I recommend you run this question by a few attorney and tax professionals to see what they think. Apologies we couldn’t be more specific.
Hi. Youve mentioned Wyoming multiple times as a state that is most popular among investors to form a parent llc.
I was just wondering why Wyoming and not the other states with $0 annual tax?
Hi Al, the reason for Wyoming’s popularity is it has stronger asset protection laws, most commonly talked about, charging order protection. We haven’t written on this yet, but we will soon. In the meantime if you google search or look on youtube, you can find information. Hope that helps.
Advice on staring a LLC (inde film production company) in California but looking to film other states such as Illinois, Georgia and Louisiana.
Are there any specific questions that you have? If you’re wondering what state to form the LLC in, since you reside and will do business in California, you should be forming your LLC in California. Hope that helps.
I keep on hearing about people opening an LLC in states like delaware , nevada and other place is it better to open an LLC in one state over the other ?
Hi Matt, you’ll need to form your LLC in the state where you’re doing business. For most people, this is the state where they live and are a resident. If you form an LLC out of state, you’ll need to register that LLC as a Foreign LLC in the state where you’re doing business. We’ve covered this topic in greater detail on this page: what’s the best state for my LLC? Hope that helps.
Hey, I am a resident in Ohio, but will operate a door to door sales company. This year we are in Idaho, but move states from year to year. Should I form the LLC in my home state, or in Idaho (and switch it every year)? Or should I consider one of the ones with no state sales tax, like Wyoming or Nevada?
Hey Sawyer, you’ll pay tax where the money is made, not the state where your LLC is formed. I’d consider forming the LLC in Ohio and then registering as a Foreign LLC in Idaho and the other states where you’ll be operating. After you leave the operating states, you can then cancel/withdrawal the Foreign LLC registration(s). This will allow you to operate in all states where you do business but keep the “base LLC” in your resident state with the same bank account, EIN, and company history. Hope that helps.
Thanks a bunch Matt! I appreciate it!
You’re welcome Sawyer!
Hi,
Isn’t the information for NY incomplete?
It seems NY has at least $25 fees for filing the form IT-204-LL . Would you please give some insight into that and why you did not mention it?
Thank you
Hi Silas, the IT-204-LLC is a part of the LLC’s state-level tax reporting requirements filed with the New York Department of Taxation and Finance. And although they also use the term “annual report”, the Annual Report fees mentioned in our table (and traditionally speaking, anytime LLC Annual Reports are mentioned) are for the Annual Report filing paid to the division which created the LLC, usually the Secretary of State or Department of State. I see how that can be confusing though, so we do appreciate your feedback about this.
Thank you very much for your quick reply. In the following link, I read two contrary things.
https://www.tax.ny.gov/pit/efile/annual_filing_fee.htm
On one hand, it says that:
Form IT-204-LL should not be filed by:
“a partnership, LLC, or LLP with no income, gain, loss, or deduction from New York sources in the current taxable year, regardless of whether or not it is formed under the laws of New York State or is dormant;”
and on the other hand it says:
“If an LLC or LLP did not have any New York Source gross income for the preceding tax year, the filing fee is $25.”
Based on my understanding if the company has no income (inactive?) they should not file this form but as I read more it says LLC should pay $25 even if there is no income. How could a company pay that without filing it?! Am I missing something here?
Hi Silas, you’re very welcome. We can’t get into the details of taxation forms. Since there can be anywhere from 5 to 12 forms needed in a particular state, times that by 50 and you can see how large the scale is (and this doesn’t include local returns). We solely focus on LLC formation (and we still have content yet to be published). We really recommend working with an accountant to make sure your federal, state, and local taxes are filed and paid correctly. Thanks again for your understanding. You can also call the Department of Taxation and Finance if that helps.
Hi
This article and the feedback is so helpful.
But now I have a question of my own.
I understand llc’s to have protective powers when it comes to loans, especially in the state of wyoming.
But would a c corp llc have those same powers when it comes to venture debt?
Thank you.
Hi Al, thanks for the kind words. I’m not sure what you mean by a “C Corp LLC”. I’m assuming you mean an LLC taxed as a C-Corporation with the IRS? Either way, I don’t know the answer to your question. However, since the C-Corp tax election is made with the IRS, I would imagine how the LLC is treated by the state legally would still remain the same. Thanks.
Hey Matt! Quick question. I was born in the Us and moved to Israel at age 13 and still live here. (have a SS#). I only want to open an LLC for Amazon FBA. Would it be correct to say that for me the best State would be the cheapest one? Arizona?
Hi Zvi, this is an interesting question… not sure if there is a quick black and white answer to this one. Said another way: I’m not sure. Might want to run this question by a few other people. Thanks.
Hello Matt
I have few questions. I am from Serbia an I like to open LLC somewhere in US. In Serbia I have company and produce some steel and stainless steel products(fences, gates, drains), so now I like to selling my product in US. What is your proposal? Do I have to open LLC in every state where I will sell my product? Can I freely import my products into the US and where can I find out how much is customs fee for my product? I want to do business with companies. Do you know how I need to pay tax and how much is tax for that? What else I need to know before first step?
Thanks in advance
Hi Vladimir, we don’t cover taxes, so you would need to speak with an accountant about that. No, you don’t have to form/register your LLC in every state where your customers are. You’ll want to form your LLC in the state where you’re doing business. Hope that helps.
Hi Matt,
My 35 year old nephew is interested in setting up an LLC in Indiana. he currently is doing some work for a friend and the friend is paying him. I do not know if the friend has an LLC. I’m a little confused as to why he wants to set up an LLC. He said something about taxes and the way his boss is paying him. I know this is vague. I advised him not to and that’s his boss’s job to set up an LLC, not my nephew. The only reason I can think of is if my nephew is contracting himself out, working for other people, then maybe he wants his own LLC. I also don’t think he has looked at the big picture of paying taxes on behalf of the LLC, unless Indiana doesn’t require an LLC to pay taxes on the LLC. Can you think of ANY reason why an individual like my nephew (laborer), not getting paid too much, would want an LLC in his name? Again, I know it’s vague, but trying to understand why in the heck he would want to do such a thing. I plan on talking to him about it in depth to see why, but maybe you can enlighten me on what your thoughts are in this respect. Thanks for your time.
Diane
Hi Diane, we haven’t gotten into this subject matter yet, but there can sometimes be benefits (usually from a liability standpoint) for an Independent Contractor to operate as an LLC.
Since 2012 Rhode Island also has a $500 minimum corporation tax that applies to all LLCs, including sole-proprietorships/pass through entities. It is in addition to the $50 filing fee. For LLPs, LPs, and S-Corps it is referred to as a minimum franchise tax.
Hello and thanks for having such a great Q&A forum.
I am set up in Virginia as a new LLC. My business is based primarily on Private Security Services. I am strictly a service provider. The majority of my work will hopefully come from Virginia where I reside. However after 30 plus years doing the same work in the banking industry I have contacts outside the state of Virginia that are contacting me to work on various projects. From a legal standpoint can I accept those opportunities without forming a foreign LLC in those states. Virginia has reciprocity in the states of NC, FL, LA, GA, KY, TN. Some of these states will be where my opportunities will come from. I will not have any companies established anywhere but Virginia. However I do wish to accept the opportunities for work projects from other states. Any advice is appreciated. Thanks Richard
Hi Richard, you’re very welcome. You’ll be fine with just a Virginia LLC and you won’t have to worry about Foreign LLC registrations in this case. Hope that helps Richard.
Hi Matt,
Thanks for all the great info. I have a twist on the scenario so would love to get your input: I have a Utah LLC to use a Self Directed IRA (custodian has an office in Ca) to purchase rental property in OH where there will be a property manager. I currently live in CA but am looking to move out of the state. If I use a Utah bank account do I still have to register as a foreign LLC in Ca?
Hey Lin, California has very strict laws regarding doing business. Strict corporate laws as well as tax laws. Simply by residing in California and making phone calls about your properties is “doing business”. I don’t know the answer to your question though and I’d run this by a few more people. Here’s my thoughts thus far: You’re moving soon and hopefully establishing residency in another state, however, the state-level tax returns you file will likely show the business activity, therefore, notifying the state. Feel free to keep us posted if you find anything definitive.
I’m a Brit live in UK and have no USA address. I want to come to the US buy old cars and ship them to UK.
So if I set up a company in Kentucky, to get some banking sorted out, so I then can have trade car insurance to drive the vehicles I buy from private individuals, will that make sense? I’m looking at buying cars all over the US. I guess I will need to register the cars to the US business on purchase in each state, or can I export them to Kentucky first and get license plates there? The business is unlikely to make much profit in the US as I’m a buyer. Sales will only be made back in the UK. Will I have to file profits based on UK sales in the US as well?
What forms of payment does the Sec of State accept for LLC registration? Thanks.
I understand that CA has a 1.5% tax on net taxable income, and a gross receipts fee as well. Does AZ have something similar, or is the only fee the initial $50 LLC fee?
I understand that CA has a 1.5% tax on net taxable income, and a gross receipts fee as well. Does AZ have something similar, or is the only fee the initial $50 LLC fee?
(I’ve not asked this question previously)
I pay booth rental within a business that already have an LLC and have a business license is it necessary if Im a small business to get a LLC. It do sound worth it.
We are Florida residents, thinking of forming a Montana LLC in order to save sales Tax on a new motorhome in Montana. What do we need to do and what will the charges be? Do we pay an annual fee for the LLC as well and do we need to return to Montana yearly to do it? Thank you, RGL
Your best bet is to contact the Montana Dept of Revenue.
Hello Matt. My husband and I are starting a real estate investment company in NV where we reside and will do business. Is there a separate process and cost to using a DBA? If so could you explain what and how? Also is it relatively easy to do on our own rather than hire someone to do? Please advise. Thanks.