Where to Open an LLC

We live in a large, great country with fifty diverse states. You might grow up in one state, call another state home, and open your LLC in yet another state. Many people assume they must open their limited liability company (LLC) in their home state, and this misunderstanding causes them to miss out on benefits their home states don’t offer. So today, we want to emphasize the importance of opening your LLC in the right state, not just your home state. After you’ve determined the current state of your business and your future plans for the company, feel free to roam the fifty United States when you’re trying to decide where to open an LLC.

Where to Open an LLC

When choosing where to open an LLC, you can choose to be a “domestic” LLC (based in your home state) or a “foreign” LLC (based in another state). Many people decide to stick with their home state because they think it will be cheaper and more convenient. Sometimes, they’re right. Choosing to form a domestic LLC means you won’t need to register as a foreign LLC (which can cost extra) or hire someone to serve as the registered agent in a foreign state. However, this tactic doesn’t work well in every state. For example, your home state might charge high annual LLC fees or have a high income tax. If you aren’t conducting business in your home state, you don’t necessarily need to form your LLC there (“conducting business” is a complex term but it generally refers to a physical location and the majority of a business’s transactions). So if you conduct a lot of business out-of-state or online and your company is large or growing, you might find that forming a foreign LLC is worth that bit of extra hassle. Wondering where to open an LLC if not your home state? We’ve compiled a list of four wonderful options.

Some Options

  1. KANSAS. The Kansas LLC Act gives an LLC unlimited life and gives the members contractual freedom to deal with business partners and the ability to prevent unwanted business partners.  Further, if your LLC is sued and loses, Kansas law does NOT allow the successful plaintiff to force the LLC to dissolve or distribute assets.  These flexible management options make Kansas a great place to open an LLC.
  2. DELAWARE. Many people choose to form an LLC in Delaware because its laws are business-oriented and its court system is advanced. This is a good choice if you have a very large or fast-growing company.
  3. NEVADA. Nevada is another great state to form an LLC. It has a pro-business climate, low taxes, and low filing fees. Plus, unlike other states, Nevada does not have an information sharing agreement with the IRS.
  4. WYOMING. Wyoming’s benefits include a business-oriented climate (yet again), low filing fees, and low annual fees.

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If you choose one of these states, you might be able to avoid fees, lower your taxes, and protect your company from lawsuits. So if you’re wondering where to open an LLC, talk to your attorney and discuss the nature of your business and the possibility of forming an LLC in a more advantageous state than your home state—likeKansas,  Delaware, Nevada, or Wyoming. If you’re interested in learning more about the formation of LLCs and wondering where to open an LLC (andyou live in southwest Missouri), please give the attorneys at Parks & Jones a call. We would be happy to help.

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