I am looking at forming an LLC or C-Corp, and am considering forming it in another state because the fees are a bit less. Does anyone know the pros and cons of doing this?
For the state in which you would like to incorporate, here are some questions to research:
1. How much is the initial registration fee? How much is the subsequent filing fee?
2. Is a resident agent required?
3. How often must I report (semi-annually, annually, biannually)?
4. Will the Secretary of State accept fax filings?
5. How much information is required on the filing form?
6. Is there a franchise tax or income tax due on income earned outside of the state in which I have incorporated?
For the state in which your out-of-state corporation will be doing business:
1. How much is the registration fee for a foreign corporation?
2. What filings are required for a foreign corporation and how often?
3. Will the Secretary of State accept fax filings?
4. How is income earned in the state by my foreign corporation taxed?
You might also research which state laws a court decisions are friendly to LLCs, Corps and FLPs. Some will uphold the separate nature of the entity some will allow it to be pierced easily.
Virginia was good for LLCs and very good for FLPs.
Nevada of course is THE state to incorporate.
Also research which states you MUST register and or qualify to do business in and which you may simply do business as a foreign corp or LLC/LP. I'm currently fuzzy on this but there is a difference both in filing fees and requirements and protection afforded. IIRC if you have to qualify you lose whatever benefit you had by incorporating in the other state to begin with.
Ted,
For the state in which you would like to incorporate, here are some questions to research:
1. How much is the initial registration fee? How much is the subsequent filing fee?
2. Is a resident agent required?
3. How often must I report (semi-annually, annually, biannually)?
4. Will the Secretary of State accept fax filings?
5. How much information is required on the filing form?
6. Is there a franchise tax or income tax due on income earned outside of the state in which I have incorporated?
For the state in which your out-of-state corporation will be doing business:
1. How much is the registration fee for a foreign corporation?
2. What filings are required for a foreign corporation and how often?
3. Will the Secretary of State accept fax filings?
4. How is income earned in the state by my foreign corporation taxed?
You might also research which state laws a court decisions are friendly to LLCs, Corps and FLPs. Some will uphold the separate nature of the entity some will allow it to be pierced easily.
Virginia was good for LLCs and very good for FLPs.
Nevada of course is THE state to incorporate.
Also research which states you MUST register and or qualify to do business in and which you may simply do business as a foreign corp or LLC/LP. I'm currently fuzzy on this but there is a difference both in filing fees and requirements and protection afforded. IIRC if you have to qualify you lose whatever benefit you had by incorporating in the other state to begin with.