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Right but using the example there aren’t any profits to tax, so his friend would’ve saved several thousand dollars by having the entity registered in another state with a lower minimum. Florida, for example, is less than half of Delaware and SD is even lower. Much better choice for a one person early stage experiment.

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If you live in CA you're required to file as a foreign corporate entity, and still pay the $800 in taxes. You can't open a bank account in a CA bank without proving that you've made that filing regardless of where the corp was registered.

I could be wrong but one could open a bank account in a different state. In this case he formed a business but did not make a profit or sale or employ anyone for 6 years. It doesn't make sense to form an llc unless you require it. Start smaller.

If you live in CA and are operating your business in CA, you're probably going to have a hard time arguing you don't have to pay CA tax.

Right, but the point is that he isn't operating a business at all, seeing as there's no product nor sales. So what does he have?

Maybe he doesn't need an LLC at all right now.

That is not true. I speak from personal experience of less than a year ago, with a gigantic international bank.

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