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What does it entail to form LLC in Nevada if I live outside Nevada? I would like to benefit from Nevada's tax/business-friendly laws. I would be the sole founder a software business. The product(s) would be a web application(s) (online software). And I suppose anyone in the United States might use it. I do not live in Nevada, nor will I ever. My parents do live in Nevada--perhaps that makes my scenario unique. |
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Anyone can form an LLC in Nevada or any other state. The process is straightforward (there are several companies that offer packages, etc) but you do need an address in that state. That is usually done via a registered agent firm (which you pay for). In terms of taxes, it's a bit complex since your primary place of business is typically where you as the CEO/Founder/Work do most of the work. Your state will want a cut of whatever revenue you generate by "doing business" in the state and you would have to file foreign entity paperwork to do business in your primary location. If you want to pursue a Nevada LLC, I would suggest speaking with a lawyer that handles them. There are several advantages since Nevada does not report their LLC or corporation activities to the federal government and they have no state taxes as well as low fees. The downside is that if your business is outside the state, then you need to technically pay foreign entity taxes to the state you primarily do business in. |
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No, your situation is not unique. This issue comes up so frequently that I blogged about it several months ago. Please see "Why (not) form an LLC in Nevada?" Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship. |
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Tim, you say he would be "better off incorporating in Delaware" over Nevada, but then you don't really give a reason why other than to ask if he really wants to be associated with "Bugsy Siegel" ???!!! - I'd guess most people equate Nevada more with Wayne Newton, Cirque de Soleil, and Elvis than some decades dead gangster of questionable relevance. Using your argument, you could say that you might not want to incorporate in Delaware, because do you REALLY want to be associated with The Bruno/Scarfo Family? Do you really want to incorporate in California and be associated with The Manson Family? Sorry, but that's just retarded. For the record, I prefer Wyoming. There are plenty of strategies for utilizing Nevada, Wyoming, and other state tax free jurisdictions for your business, but you have to know how to use them, and they are not a one-size-fits-all solution. Nevada is great for holding intellectual property that receives royalties, or I would say for a majority of internet based companies. If you operate and live in an extremely highly taxed state such as for instance California, you can have your main operating company registered in California and another company in Nevada that owns your office equipment, vehicles, intellectual property, etc. and leases it to your California company at whatever rate you agree to, thus draining the profit out of your California company so that you only pay minimal California state taxes. Tens of thousands of companies in California employe this and similar strategies. Many California companies are only able to be in business because they employ a strategy such as this. There is an excellent article explaining this (Dual Entity Strategy). The reason I would hesitate incorporating in Nevada is because they aren't really what you would call "business friendly" anymore. Consider the onerous and exorbitant license fees they pile on to the already high annual list filing fees. The legislature in Nevada is loaded with public employees and other legislators beholden to public employee unions, so following the lead of California, they have been mismanaging the state's finances for years, have massive unfunded pension liabilities, and some legislators have publicly declared their desire for a business tax, so any advantage to doing business in Nevada might be a short-lived proposition. Delaware also has been raising their annual fees to make up for their own mismanagement of revenue, plus the employees in the Delaware Secretary of State / Division of Corporations are probably the rudest and most unpleasant people in the entire country, so if you think you'll ever have to deal with them, you might consider that as well. Every interaction I've ever had with Wyoming has been a pleasant one. |
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Everyone is after you for sales tax. In my case I only sold 4 items all to different states like Florida, Tennessee, Ohio and New Hampshire I think. Anyway Nevada says it's tax exempt if it's sold in another state but now they're calling me and want to straighten everything out. Advertising costs $200 plus a month, incorporating cost $800 plus $175 a month. Pricing anything you want to sell has to be priced low to be competitive. So in other words I personally see no hope in an online sales business. Basically it's too late to make it in the USA unless you inherit a fortune and even that won't last long if people vote against themselves in favor of more government. It's never been more true than now that the only way to get rich is win it, inherit it or steal it and I don't think you're going to win it or inherit it. Good luck with your career in crime. |
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