I am sure this has been asked on numerous occasions but I have several questions.
I plan on opening a strictly internet LLC that will sell t-shirts. The shirts will be made by me, out of Florida and shipped all over the US.
What would be the benefits of registering in Delaware vs. Florida? I know a registered agent is required for Delaware and they require a minimum $100 filing fee and then a minimum $50-100 annual fee. Would I be required to pay the Delaware income tax even though it is considered a single member LLC?
And on another note as far as trademarks, would I just need to trademark in the state I register in, considering it is an internet based business? Not sure if that can be answered but any guidance would be appreciated.
Thanks in advance.
First of all, the Delaware annual fee for LLCs is $250 (its called “Franchise Tax”). The annual fee minimum you mentioned applies to Delaware corporations.
Second, with LLC you do not pay tax on the company level, so from that point of view it doesn’t matter where its registered. Since you are a Florida resident all the profit (or loss) of the LLC would pass to your personal tax return, and as far as I know in Florida you only pay federal income tax.
Third, since you are manufacturing and shipping your T-Shirts from Florida you would be required to collect sales tax on all sales shipped to Florida clients, so even if you register in Delaware and do not foreign qualify in Florida you still need to obtain a sales tax ID in Florida.
Which brings us to the forth point – foreign qualification in Florida. If you choose to register in Delaware you get a few possible advantage points, however it might be an overkill for a business such as yours. The reason for that is the fact that your operations would all be in Florida, so you might be required to foreign qualify your DE LLC there, which would pretty much double your cost of registering and maintaining your business structure. So you might consider just to register in Florida, obtain a sales tax ID an run your business as a Florida company.
As far as trademarks go I would recommend you to consider registering a federal trademark through USPTO. This way you get protection in all 50 States and DC.
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