Ask HN: Where to form an LLC

https://news.ycombinator.com/item?id=447047

by gamache • 18 years ago

4 6 18 years ago

news.ycombinator.com

I send you this file in order to have your advice.

I am looking to form an LLC for software consulting purposes. I do not expect/intend for it to grow into a VC-backed entity so I am not considering S-corp. I am the sole proprietor of this LLC-to-be.

I live in Massachusetts, and I expect most of my work will be in MA too. But I hear that it can be advantageous to form the LLC in another state; Nevada and Delaware come up most frequently.

I would love some tips, stats, suggestions, URLs, horror stories, relevant code snippets, or anything else that might help me on this quest. Thank you News Hackers!

jhancock• 18 years ago

Given your parameters, the thing to keep in mind is where you are incorporated in case you need to defend yourself in a lawsuit. It is almost always better to defend on you home turf as opposed to taking trips and hiring lawyers in Delaware.

IANAL, but I have been involved in lawsuits. Home turf advantage can be a good thing.

gamache• 18 years ago

This is a very good point, and one I had failed to consider.

menloparkbum• 18 years ago

You want to form the LLC in the state where you live and do all your work. There is no advantage to forming an LLC in a different state. Other business entities (S, C corp) are a different story.

hbien• 18 years ago

I'm not a lawyer, but I definitely agree you should form an LLC in your home state.

For CA, I thought forming an LLC in another state would save me $800/year. But after some research, it doesn't matter where you form your LLC. If your business is operating in California you still have to pay the $800 yearly fee.

skmurphy• 18 years ago

Someone in your situation based in CA would be better served to form a Sub-S as the tax treatment is more favorable. You should talk to a tax accountant (not just an attorney) about the tax implications of LLC vs. Sub-S in MA, there may be similar issues.

ddemchuk• 18 years ago

I'm looking to start a LLC very soon as well, but my business partner lives in Virginia and I live in California...What state should we choose at that point?

(don't mean to thread jack)

Ask HN: Where to form an LLC

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