If you’re considering incorporating an LLC in the United States, you have fifty different options to choose from. While many people establish an LLC in the state they live in, it is possible to form an LLC in any state. And those who live outside of the country can incorporate in any state in the U.S. as well. Here are the three best states to incorporate your LLC in. We’ll also lay out the reasons why these are the best states to incorporate your new business in.
Nevada is most famous for being home to Las Vegas, but many others know about its many business benefits. For example, it doesn’t charge residents or businesses formed there an income tax. There is no franchise fee or capital gains tax. There’s no inheritance tax, either. This eliminates the need to file an income tax return.
Nevada also allows for complete anonymity of shareholders or board members. That provides an extra layer of protection if someone wants to sue you. LLCs do have to file an annual fee, but this is several hundred dollars a year. Another unusual rule is regarding stock or membership interest purchases; they don’t have to be purchased with cash. In theory, you could buy stock and membership interest with your time and services. Processing times for LLC filings are fast, as well.
The popularity of Nevada may be the ability to make trips to Las Vegas a business expense, though there are other states that may actually be a better home for your new LLC.
Delaware is a great place to incorporate your business. This isn’t because they’re a tax haven, though they don’t tax out of state income. Instead, it is the many rules and regulations they’ve put in place to accommodate business owners.
For example, they have a chancery court. This court only makes decisions in business cases, allowing Delaware corporations to have cases heard quickly. Furthermore, it is a judge familiar with business matters. Then your business dispute isn’t handled by a judge who may have been dealing with traffic cases and marital disputes the day before. That’s a point in favor of Delaware if your firm will be doing business in multiple states or wants to go public. In fact, half of all publicly traded firms are based in Delaware, as well as two thirds of the publicly traded ones.
Delaware has streamlined the process for setting up an LLC. Filing fees and franchise taxes are relatively low. Use a reputable online incorporation service to set up a Delaware LLC. With the right service, you can gain access to a free registered agent that can handle affairs on your behalf.
Wyoming may be famous for the vast wilderness and national parks. However, it is a haven for small businesses. For example, it has no business or franchise taxes, it has a very low annual renewal fee, and it is unusual in having a lifetime proxy – this is someone you can pick to vote on your behalf. That makes it possible to have someone else hold your stock or shares while you retain control over them. This can make it possible to remain completely anonymous.
The three best states for incorporating an LLC have a business-friendly regulatory environment. All of them offer low taxes and legal paperwork, though not all let you remain anonymous or run it alone.