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Where to form LLC for my online business

Asked by: Tom - 28 August, 2012
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/default.png-f1597c1da25f30f8c1a941405e8391c8 Hello Robert,
My partner and I are currently in the process of setting up our retail ecommerce store catering to the US and internationally. We will not have the presence of a brick and mortar store anywhere. Which state do you suggest for us to form our company. I've looked into DE, NV and WY but am still undecided because all three states all seem to be corp and tax friendly. Which one do you suggest and consider to be the best and cost effective with respect to the start up costs, fees and future filing. Thank you kindly and any input is greatly appreciated.
Answered by: Robert Kowalski - 29 August, 2012
https://d25eic0jctudgb.cloudfront.net/images/site/avatars/35.jpg-687fc92d5f6c5febcbdccb6895b08b8c Dear Tom,

We generally do not recommend Nevada nowadays, as this state became unnecessarily expensive to form companies there (both filing and annual upkeep).

Choosing between Delaware and Wyoming: we tend to prefer Wyoming over Delaware for most cases (but not all), as this state is the cheapest in terms of both filing and maintenance, while presenting practically all the benefits you would get in Delaware or Nevada, and sometimes even more. You can see the comparison of those 3 states here: DE vs. NV vs. WY.

Keep in mind though, if you will establish physical presence in any other state than the state of formation you would need to register the company in that state as well (typically as a "foreign entity"). I would also advise you to read our article about choosing the right state for your business.

(Just a side note, our company is located in NY but we are a WY LLC, with a foreign entity in NY, for all the reasons we advise picking Wyoming as the state of choice.)

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