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galahan
01-06-2010, 11:06 AM
I'm a little confused as to where to form my LLC.

- The business is a marketing consultancy with two partners, no other employees.
- We live in WA and using our homes as our offices, though business can come from anywhere in the country

My doubt is whether we should incorporate the LLC in Wyoming (similar tax advantages to Nevada) or in WA.

If we inc in WY my understanding is that we'd still have to get foreign qualification in WA because we're doing business there. Does that mean that the business we do will pay WA taxes? Also, I think we'd have to file annual reports in both states?

Basically, is there an advantage to being incorporated in WY if we're going to be doing business in WA?

Thanks

Evan
01-06-2010, 11:23 PM
If we inc in WY my understanding is that we'd still have to get foreign qualification in WA because we're doing business there. Does that mean that the business we do will pay WA taxes? Also, I think we'd have to file annual reports in both states?

Basically, is there an advantage to being incorporated in WY if we're going to be doing business in WA?

Thanks

Correct, you will be paying fees to WY and WA. In addition, you'll be paying fees in WY to maintain an "office" (aka registered agent). There is probably NO savings at all, and in many cases it is MORE costly to incorporate or organize OUTSIDE of your state.

The only advantage that may exist is if your state has very high taxes for domestic entities that don't apply to foreign entities. In some states, that DOES apply. Though most charge a "minimum" tax, and you'll pay $X regardless of being domestic or foreign. The fee to organize domestically is also sometimes cheaper than a foreign entity.

Those that do incorporate or organize in another state and take advantage of it either do business in multiple states, or they're seeking business-friendly laws in their "home" state. For the average small business, you will not benefit.

galahan
01-07-2010, 11:59 AM
Thank you! That was extremely helpful :D

yoyoyoyoyo
01-15-2010, 08:46 PM
as someone who lives in Washington State, seeking to do business in Oregon (literally 20 minutes across the River), the same question came to me as well.