Llc In Nevada Or Delaware?
If I plan on doing business in the east coast should i incorporate in nevada or delaware? Anyone know of a good website so i can do a little comparison between delaware or nevada for llc (for rental properties). Thank you.
I used a group called the company corporation to set up my corporation.
This is info from their site. It's not specific to Real Estate, but it explains some of the advantages of Delaware and Nevada
Forming a Corporation or LLC in Your Home State
Many small businesses prefer to incorporate or form an LLC in their home state. Typically, it is least complicated and most cost effective to incorporate in the state where you are planning to operate your business. If you incorporate outside your home state, you still may be required to qualify to do business in your home state. The cost of a local incorporation will usually be less than incorporating in another state and then qualifying to do business in your home state as a "foreign" (out of state) corporation. Plus, you will avoid paying franchise taxes and filing annual reports in two different states.
Advantages of a Delaware Corporation or LLC
Over 50% of all companies on the NY Stock Exchange are Delaware corporations. Delaware has a long heritage as a business-friendly state and may be a good choice if you intend to take your company public and offer publicly traded stock. Delaware has many other advantages, including low incorporation fees, low annual franchise taxes, and no state corporate income tax for corporations that operate outside of Delaware. Furthermore, Delaware maintains a separate court system for business, called the "Court of Chancery." This Court is known for its well-established record of decisions and speed at which it handles disputes. So instead of spending your valuable time in court, you can spend it running your business. Be aware, however, that if you incorporate in Delaware while your business is located outside of Delaware, you may need to qualify to do business in your home jurisdiction. This may require an extra step and an additional fee to your home state. The Company Corporation® can assist you with incorporating or forming your LLC in Delaware and qualifying that corporation or LLC in any state you choose.
Advantages of a Nevada Corporation or LLC
Nevada has become increasingly friendly to corporations with its privacy and liability protection status as well as certain tax advantages. Nevada has no state tax on corporate profits, no state annual franchise tax, or no state personal income tax. Stockholders of a Nevada corporation are not public record, allowing complete anonymity. Be aware, however, that if you incorporate in Nevada while your business is located outside of Nevada, you may need to qualify to do business in your home jurisdiction. This may require an extra step and an additional fee to your home state. The Company Corporation® can assist you with incorporating or forming your LLC in Nevada and qualifying your corporation or LLC in any state you choose.
Can a Delaware or Nevada Corporation or LLC Do Business in Other States?
Yes. Nearly half of the corporations listed on the New York Stock Exchange are Delaware corporations and numerous large businesses are relocating to Nevada. These large companies conduct business throughout the U.S. and abroad. They must, of course, conform to the laws of any jurisdiction they enter. Many states require that any foreign (out of state) corporation qualify to do business in their state prior to actually conducting business there. The Company Corporation® can assist you in qualifying your corporation or LLC in any state you choose.
Doing Business in More Than One State
Many companies conduct business throughout the U.S. and abroad. A corporation having business locations in multiple states will typically incorporate or form an LLC in a single state, then "qualify to do business" in the other states. This means they formally register in these other states, paying additional franchise taxes and filing annual reports, as required.
Where to incorporate can be confusing with all the information available, like company corporation's website. In the end it comes down to where are you doing business and what corporate benefits are imporant to you in your business. For example, one of my clients recently won a 5 million dollar motion that would have devasted him had his corporation not been a Nevada Corporation registered to do business in Washington State. Whenever I structure someone I tell them business structuring is a cost benefit analysis between asset protection and annual costs. Based on your post, Deleware is not an option however, Nevada versus your state is something to be considered. If you choose Nevada plan on an additional cost of 250 minimum per year. That cost is weighed against Nevada's bias for small busines owners, e.g., greater asset protection.
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