Hi all - I am a US citizen living abroad looking to set up an LLC in the US. I have an address in NY but looking at Delaware to register my startup as they have historically been "startup friendly" but I have heard that the regulations are changing and not as favorable as they used to be. Any advice/feedback from the community on which states are "startup friendly" from a registration process, low corporate taxes or favorable tax breaks for entrepreneurs, and low overhead costs e.g. registering an official address to collect mail, having an admin do this etc.
DianePrince·Dec 05, 2022DianePrince·Dec 05, 2022@NaraKimMilano, it depends on several things, like if you are planning to raise money from investors or where you'll need to pay an annual franchise tax. For example, if you incorporate in Delaware but you're not actually doing business there and you're doing business in California, then you'd need to pay annual franchise tax in both states and follow reporting requirements for both states. My advice is to set a deadline to make your decision. Then gather advice, as you are doing, consult with one or 2 CPAs who work with startups, then make a decision and just do it. Good luck and congrats on your new venture!
Iynna·Dec 06, 2022Iynna·Dec 06, 2022Queen Diane! You're literally the startup guru!
DianePrince·Dec 06, 2022DianePrince·Dec 06, 2022You're too kind. I appreciate you! Also, really enjoyed the Elpha end of year chat!
Iynna·Dec 06, 2022Iynna·Dec 06, 2022Omg this made my day! I loved seeing you :)
NaraKimMilano·Dec 06, 2022NaraKimMilano·Dec 06, 2022thanks for your feedback
hannahcake·Dec 06, 2022hannahcake·Dec 06, 2022Super helpful advice, Diane! And thanks to @NaraKimMilano for this helpful question, as I'm working through this stage as well.I'd also love to know what counts as doing business in a state. For example, if you have people paying for online or in-person services from multiple US states and internationally, what kind of franchise tax situation is that?
DianePrince·Dec 09, 2022DianePrince·Dec 09, 2022I don't know about internationally, but for the US you need to check with each state on their franchise tax requirements for services. Some companies ignore this, some get caught. Once, when I was operating a service business in multiple states, we thought we were totally compliant. Then we were sued by Pennsylvania...
Are you already set on your company being an LLC? If not, it's probably also worth doing research to ensure LLC is the right choice vs Inc, etc.
I have not actually considered setting up as an Inc. I will look into both. Thanks for your feedback.
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