If I plan to launch a few websites over the next couple years. am I supposed to create an LLC for each one? I think I've read elsewhere that you can form an umbrella LLC to cover them all.
What have your experiences been with this?
(FWIW: Before I do anything I'm going to meet with a lawyer... but the more background knowledge the better.)
Then of course as they grow there are reasons why you may want to sell one of your websites, but not the others, etc.
The reasons why to do it are vague and different for everyone, but to me, it's a "can't hurt" and "why not?" type decision.
You go to LegalZoom (or any similar service) and pay $400. They mail you a certificate you bring to your bank to open a separate account. Total spent: $400 and 30 minutes of your time.
California is an exception: They make you pay $800 per year to the state for each entity. Most states it's only $50 and some states (like New Mexico) you never need to renew or pay any annual fees at all. If you're a virtual company with no physical office, you can set up your LLC in any business-friendly state you want. (Delaware, Nevada, Wyoming, etc.)
Outside the U.S., British Virgin Islands is the quickest, cheapest, easiest place to do it: http://www.google.com/search?q=bvi+corporation
I've found that Earth Class Mail's Beaverton, OR street address (which has no add'l cost past the standard ECM fees) works fantastic. The Oregon SoS website lets you register an LLC online on the cheap, less than $100.
I think this issue is very interesting, and I would imagine it's important to a lot of HN readers. So let's say you're developing software (e.g. for a website, an iPhone app, etc.) by yourself out of your home. Are you really "doing business" in your home state?
Unless I'm misinterpreting the parent comment, the answer is no. But if anything, it seems the opposing view may be more common. Specifically, many people say yes, wherever you're doing most of your work/programming/typing/etc. is where the business has "nexus". And if you're deploying a website, then there's the issue of the location of your datacenter, which could very well be in a different state.
What are people's experiences and thoughts on this?
Those LLCs are such a headhache from a tax point of view, plus they depend so much on state and federal regulations. Good luck doing business internationally as well.
Why do you think we invented the 100% virtual company (http://fairsoftware.net)?
Granted, the liability part is not as strong as a clean LLC, but you are shielded from your customers, and you can work with pretty much anyone worldwide without having to worry about any paperwork at all.
Incorporation in Delaware or another random state is a needless hassle and expense for small businesses. Incorporate in your home state. When you get big enough that you have several accountants and lawyers employed by your company, they can tell you the benefits of shifting the incorporation to another state. Until then... it's a waste. Premature optimization, as they say.
Someone has to be the "resident agent" for the corporation. It's no harder to incorporate in Wyoming or Delaware than it is in Ohio or Arizona. The expense really is only $100-$300 a year to have a resident agent, and I've found it very worth it.
I'd rather have the LLC/corporation domiciled in a state like Wyoming, Delaware, or Nevada so that I'm free to be location-agnostic with where I choose to live or work. If you incorporate in California or New York you're going to really regret it when you move to Texas or London in a couple years.
Please if anybody has any experience setting up a BVI please share here.
This is good stuff.
1. Sign up and pay (about $1000 USD) 2. They incorporate same day 3. Next day they FedEx you your documents 4. Bring those documents to your bank to set up an account 5. .. ? .. 6. Profit! ;-) 7. Once a year you renew your agent fee with the incorporation company. Another $400.
That's really all there is to it. I don't know how it works out from a tax point of view outside the U.S., but in the U.S. it's just treated like a corporation in any state. I pay U.S. taxes on my income, worldwide, so there's no tax benefit to a BVI Corp for a U.S. citizen.
But I've heard there are big advantages if you're not a U.S. citizen. Since you're only taxed on local-earned income and your BVI company is not a local company, etc. That's all I know.
The other viable option is a Norwegian foreign registered company (NUF). This means that I can create a company in a different country (e.g. England), and then register a company branch here in Norway. The problem is that these companies have gotten a bad rep in Norway, so you might find yourself in a bad position with the banks, as well as your customers.
Sure, I know the capital can theoretically be invested in your company, but 16K is potentially a lot for a web business...
Incidentally, I'm curious about the foreign company option. Any other Europeans want to comment on how that works out in your country? I'm vaguely curious if I could link one up in Europe with DedaSys LLC without spending a fortune in bureaucracy...
I have five web sites, but two businesses. Each business has and is its own presence and personality. Each web site clearly belongs to exactly one of those businesses.
here's the HN link: http://news.ycombinator.com/item?id=504151