Lead Thinking - Incorporating a LLC | Hacker News Reader

Lead Thinking - Incorporating a LLC

leadthinking.com

6 pointsmaccman7 comments

The advice about Delaware and Nevada isn't necessarily good advice in terms of liability and in terms of taxes.

If you're sued, you may have to go to Delaware or Nevada to defend yourself, and even if not, you may be subject to the laws of Delaware or Nevada, which will be different from the state you are operating from. From a book I have (called Asset Protection by Adkisson and Riser):

Under state law, having a registered agent in the state of incorporation creates nexus sufficient to allow the corporation to be sued in that state. This fact alone may affect the decision where to incorporate. A jurisdiction where jury verdicts tend to be very conservative may be preferable to one with a reputation for runaway jury awards. The cost of defending a lawsuit may also be a significant factor in this decision. Defending a lawsuit in the owner's home state will be substantially cheaper than defending the same lawsuit across the continent [or as one person here says, across the world]. This may be a factor in deciding where to incorporate

Delaware also imposes different laws on the roles and duties of directors and treatment of Shareholders. Do you know what these are?

Further you do not avoid taxes by incorporating in Delaware! You have to pay taxes in the state you operate in. So even if you are a Delaware corporation, you would pay taxes in Pennsylvania if that is where you operate (and you have to operate in a different state to not pay Delaware corporate taxes).

AFAIK, there aren't a lot of benefits to registering an LLC in a state other than your own and it can end up costing more when you register to conduct business in your own state. I recommend anyone considering this to treat out-of-state registration with skepticism and research it more. It's been discussed on HN, there's info on nolo.com and you can ask an attorney.

Delaware imposes no state income tax on a business that does not operate within the state.

Does this mean that I can incorporate there and run the business with a physical presence from some other country?

It certainly sounds like that's the case, based on this sentence from the article:

I recommend getting a firm to do it for you, especially if it’s your first time, or you’re outside the US.

That would be phreaking awesome, I wondered if that was possible for years.

Yes. I am a UK citizen, and run my US LLC from the UK. It's possible to do everything as a non resident alien, but complicated. I'll be posting more on leadthinking.com about how to get a bank/merchant account.

Does this mean that I can incorporate there and run the business with a physical presence from some other country?

Yes, but you will still pay taxes in that other country. In fact, most states other than Delaware will also not charge you income taxes if you incorporate there but not not earn money in that state.

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