General Question

poortrader's avatar

Where should I form my LLC? NY, CA, or Delaware?

Asked by poortrader (1points) January 17th, 2008

I’m new to LLCs and am hoping someone could help me save on legal advice….

My brother I are looking to make an investment in a private company. The company offering has a minimum investment requirement so we are planning on pooling our funds into an LLC and have the LLC invest in the company.

I live in New York, my brother lives in CA, and the company we are investing in operates in CA. Any advice on where we should incorporate, in terms of what is easiest and cheapest? I know Delaware is popular.. any clarity would be great..Thanks!

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4 Answers

vanguardian's avatar

I’ve heard Nevada is a very good place to form an LLC. They have a very good tax structure. You don’t need to be there physically either.

houselightsdown's avatar


1) Asset protection – separate personal and corporate assets
2) Stable legal platform – separate business courts (Court of Chancery)
3) Low incorporation costs
4) Delaware General Corporation Laws are the most friendly to corporations

From the Delaware website:
These are some very good reasons to incorporate in Delaware:

* Different kinds of business can be transacted under one corporate roof.
* Shareholders can act in writing instead of holding meetings.
* You can add people to the board who are not shareholders.
* Corporate records need not be kept in Delaware.
* One person can act as the only officer, director and shareholder of a corporation.
* No Delaware income tax is charged to companies that do not do business in Delaware.
* Delaware has no sales or personal property tax.
* Low franchise tax, $60.00 in many cases. $200.00 for L.L.C.’s

kelly's avatar

you can form a corporation, partnership or LLC in any state you desire. LLC’s pass all profits or losses to the ownership who then declare this on their personal tax return which is governed by the state inwhich you have residence. another aspect is that the state inwhich you for the entity will be where any legal issues will be filed. there may be some logistic considerations if you have to travel to handle legal issues.

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