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I always worry about legal implications. Living in California, the legal advice I see always tells me to incorporate in my state of residence. Could having a
by maxk42 8y ago
I always worry about legal implications. Living in California, the legal advice I see always tells me to incorporate in my state of residence. Could having a Delaware LLC be seen as tax evasion by the IRS or the Franchise Tax Board?
- patio11 8y agoDelaware entities are extraordinarily popular for startups doing business in California, including e.g. many YC companies. Both the IRS and California them happily process tax returns from many Delaware LLCs. (Stripe Atlas can introduce you to accountants to help you prepare your returns and give you peace of mind with regards to whether you're filing in all the right places given your personal situation.)
- ageitgey 8y agoIt's totally legal and normal to start a corporation in any state in the US you choose and Delaware is by far the most common for tech companies. However, California is especially tax-hungry and will penalize you for doing this if you live here. If you choose to register in another state instead and thus avoid the $800 CA fee, they will just charge you an $800 foreign corporation tax (minimum) for "operating" in California anyway.
- justboxing 8y ago> If you choose to register in another state instead and thus avoid the $800 CA fee, they will just charge you an $800 foreign corporation tax (minimum) for "operating" in California anyway. I did not know that. Just found this regarding what you've stated. https://www.lexology.com/library/detail.aspx?g=d29c2a6b-4422-490f-addc-1044c5c0358e https://www.lexology.com/library/detail.aspx?g=d29c2a6b-4422... How is the "operating" state determined for 100% online business, ex: a job board.