Ask HN: forming online-based LLC while not having stable physical location?
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First suggestion, network to find a lawyer you like and trust. They'll help you far more than any HN advice will.
Going against that suggestion, my next suggestion is don't register in California, as you'll pay the $900 LLC tax each year just to exist. The $900 varies based on how much the corporation earns each year, but that's the minimum.
That said, you don't have to live in the state where you incorporate, but it does make things easier, as you have to have some place with a physical, non-P.O.Box-like address to send corporate documentation to. If you are not located in the state of incorporation, you'll need to have a registered agent. This agent will receive your corporation documents and forward to them for you. Most agents charge about $200 for the service -/+.
Since you move frequently, having a registered agent will probably work just fine for you, as your corporate mailing address wouldn't change unless you change agents.
You file taxes in the corporation's state, then apply the profits to your own taxes, as a pass-through. Note that, if you set up the corporation with pass-through taxes, you'll pay taxes on the corporation's profits, even if you don't pay yourself the money (as in, if you end up with $20k in a savings account at the end of the year, you'll pay taxes on that $20k, even if you aren't paid the $20k).
Hire an accountant, too. And a bookkeeper who can show you the books at any point (say, using a site like http://netbooks.com/ ).
I've used http://mycorporation.com/ a couples times in the past for incorporations, one S corp, one LLC. They've since been bought out by intuit.com, so I don't know how they are now, but I was good with the service I received.
Going against that suggestion, my next suggestion is don't register in California, as you'll pay the $900 LLC tax each year just to exist. The $900 varies based on how much the corporation earns each year, but that's the minimum.
That said, you don't have to live in the state where you incorporate, but it does make things easier, as you have to have some place with a physical, non-P.O.Box-like address to send corporate documentation to. If you are not located in the state of incorporation, you'll need to have a registered agent. This agent will receive your corporation documents and forward to them for you. Most agents charge about $200 for the service -/+.
Since you move frequently, having a registered agent will probably work just fine for you, as your corporate mailing address wouldn't change unless you change agents.
You file taxes in the corporation's state, then apply the profits to your own taxes, as a pass-through. Note that, if you set up the corporation with pass-through taxes, you'll pay taxes on the corporation's profits, even if you don't pay yourself the money (as in, if you end up with $20k in a savings account at the end of the year, you'll pay taxes on that $20k, even if you aren't paid the $20k).
Hire an accountant, too. And a bookkeeper who can show you the books at any point (say, using a site like http://netbooks.com/ ).
I've used http://mycorporation.com/ a couples times in the past for incorporations, one S corp, one LLC. They've since been bought out by intuit.com, so I don't know how they are now, but I was good with the service I received.
You'd be better off getting an LLC and just using a registered agent in a different state, where it's cheaper to do so. Wyoming has no corporate taxes of any kind and its the first state in the nation to create the LLC. You could do it through Legalzoom for less than $200
For the love of all that is good, do not ever use Legalzoom for a legal document.
Pay a lawyer $200 to draft the documents for you, or do it yourself. Either way, your documents will be superior to the shit they sell at Legalzoom.
Wyoming's not a bad choice for LLCs, but the corporate tax bit is irrelevant if you choose pass-through taxes.
Pay a lawyer $200 to draft the documents for you, or do it yourself. Either way, your documents will be superior to the shit they sell at Legalzoom.
Wyoming's not a bad choice for LLCs, but the corporate tax bit is irrelevant if you choose pass-through taxes.
IANAL but the state that you choose to organize in won't have much bearing on how much income tax you owe. You will owe tax based upon the state(s) that are your legal residence.
You must pay taxes in every state in which you are incorporated/organized/chartered AND where the corporation actually resides (headquarters, major offices, etc).
How is it determined where the corporation "resides"? I know for a physical company, it is where ever I am physically located. But what about a purely online company?
i am also specifically interested in the vermont virtual corporation. anyone have any specific experiences?
Delaware. It's the friendliest state to "foreign" companies (companies registered in the state but headquartered/operated out-of-state).
You have a nexus with any state in which (1) you are registered or (2) are physically located (employees, offices, facilities, leased real property etc, but not including contract workers or leased equipment). You have to pay income taxes, social security, etc, in those states.
Any law textbook on LLCs.
IMPORTANT: An LLC alone will not shelter you from legal liability. The "piercing the veil" doctrine disregards the LLC and allows someone to go after the owner if the LLC is not sufficiently separated from your personal assets and control. For a sole proprietorship, the control part is already met, so you have to make damn well sure that you keep the LLC assets separate from your personal assets. Log and track EVERYTHING.
You have a nexus with any state in which (1) you are registered or (2) are physically located (employees, offices, facilities, leased real property etc, but not including contract workers or leased equipment). You have to pay income taxes, social security, etc, in those states.
Any law textbook on LLCs.
IMPORTANT: An LLC alone will not shelter you from legal liability. The "piercing the veil" doctrine disregards the LLC and allows someone to go after the owner if the LLC is not sufficiently separated from your personal assets and control. For a sole proprietorship, the control part is already met, so you have to make damn well sure that you keep the LLC assets separate from your personal assets. Log and track EVERYTHING.
Can you give advice on how to "log and track everything?" I was thinking just separate banking accounts and keep all expense receipts. Is that enough?
Also, how much do I have to separate things like e-mail and server-usage? Do I need to pay for a separate server for my personal homepage and my company's page?
Does your Delaware recommendation include LLC's? I was under the presumption it was mostly advantageous for C-Corps.
Thanks!
Also, how much do I have to separate things like e-mail and server-usage? Do I need to pay for a separate server for my personal homepage and my company's page?
Does your Delaware recommendation include LLC's? I was under the presumption it was mostly advantageous for C-Corps.
Thanks!
My situation is this:
* I have several websites that are starting to generate revenue via subscription models.
* I would like to form an LLC to shelter myself from legal liability. Doubt VCs would be interested, so no C-Corp.
* I need to choose a state to incorporate it.
* I'd love to incorporate in my 'home state,' but I don't really have one. I usually move every year or so.
My objectives are:
* Simplify the process as much as possible. I hate filing forms and dealing with legal hassles.
* Pay as little income tax as legally possible.
So my questions are:
* Do you have any advice on where to incorporate?
* Given the virtual nature of my business, in what states would I be considered to have a "nexus," and thus have to file taxes? (Paid) subscribers will be from every state.
* Do any of you have thoughts or anecdotes on the Vermont Virtual Corporation?
* Do you have any recommendations on books I can read to give myself a better background?
Thank you!