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> 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.) I

> 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.) 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?

alain94040 17y ago
Setting up an LLC in Wyoming will not shield your from tax issues in your home state (California or otherwise). 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 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.
jellicle 17y ago
In general you're likely to have to file taxes/annual reports in the state you live/work in, as well as the state the business is incorporated in. 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.
- sivers 17y ago
  I have to disagree, from experience. CD Baby was a Nevada corporation, though I was set up in New York when I started and Oregon when I left. I never had to file anything in Nevada, and there were no "needless" hassles or expenses. 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.
- rms 17y ago
  Not all LLC's are created equal. If you're going to incorporate in your home state, make sure your state has a "strong" LLC.

alain94040 17y ago

Setting up an LLC in Wyoming will not shield your from tax issues in your home state (California or otherwise). 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 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.

jellicle 17y ago

In general you're likely to have to file taxes/annual reports in the state you live/work in, as well as the state the business is incorporated in. 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.

sivers 17y ago
I have to disagree, from experience. CD Baby was a Nevada corporation, though I was set up in New York when I started and Oregon when I left. I never had to file anything in Nevada, and there were no "needless" hassles or expenses. 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.
rms 17y ago
Not all LLC's are created equal. If you're going to incorporate in your home state, make sure your state has a "strong" LLC.