LLC Formation Questions

[maxx68]

Hey everybody hope you had a great Holiday!

I was wondering if anyone can offer some advice/suggestions for setting up a LLC.

I was wondering if there's a preferred state (I hear Nevada is a good one for LLC formation) or country that is best for adult businesses.

Any info is appreciated.

Thanks - Jay

[HunkyLuke]

We setup in Arizona, it was extremely easy and its where our lawyer is so he was able to set it all up for us without having to be there. Do you have a lawyer?

[maxx68]

Hey Luke...

No no lawyer. The last time I set-up anything was a C-Corp about 7 years ago. I set that up myself here in Florida, but the fees and fucking taxes were nuts.

I'm just looking for the best place to set it up. I'll probably do it myself.

Hey, I thought you were in Australia?

Thanks - Jay

[PFLJayden]

Hey everybody hope you had a great Holiday!

I was wondering if anyone can offer some advice/suggestions for setting up a LLC.

I was wondering if there's a preferred state (I hear Nevada is a good one for LLC formation) or country that is best for adult businesses.

Any info is appreciated.

Thanks - Jay

Can I ask why you chose an LLC over a S-Corp?

We are a NV corporation. I could give you links to all of the necessary forms in NV to file a S-Corporation. I formed AmAd's S-Corp, I still have all of them handy.

We are a NV corp.... Nevada and Delaware - NO STATE TAXES! All other 48 states you have to pay taxes.

If you need help, you know where to find me

[maxx68]

PFLJayden...

- No strict corporate formalities (paperwork/fillings)

- Flexibility in who manages the business

- Pass-through income/loss

- Not required to hold annual meetings

- Can be owned by individuals

- And personal access and use of business funds acceptable

I had a C - Corp and the fillings, requirements and various local, state and federal fees were killing me.

[rawTOP]

Avoid C Corps, but S Corps are great. I prefer them to LLCs. With an LLC every time there's any change to the ownership you have to reincorporate. With an S Corp you just buy/sell shares of stock to bring on or drop an owner.

It's best to talk to an accountant and/or lawyer before you incorporate. But once you get the all clear you can incorporate pretty easily with one of the online services. We used bizfilings.com for one of our businesses and some of the other services for the other business.

[PFLJayden]

PFLJayden...

- No strict corporate formalities (paperwork/fillings)

- Flexibility in who manages the business

- Pass-through income/loss

- Not required to hold annual meetings

- Can be owned by individuals

- And personal access and use of business funds acceptable

I had a C - Corp and the fillings, requirements and various local, state and federal fees were killing me.

Let me ask you this.... What are your liabilities? What is going to be a risk for you? Evaluate that and base it upon the corporation set forth.

[PFLJayden]

Avoid C Corps, but S Corps are great. I prefer them to LLCs. With an LLC every time there's any change to the ownership you have to reincorporate. With an S Corp you just buy/sell shares of stock to bring on or drop an owner.

It's best to talk to an accountant and/or lawyer before you incorporate. But once you get the all clear you can incorporate pretty easily with one of the online services. We used bizfilings.com for one of our businesses and some of the other services for the other business.

LegalFish.com is always great too. That's where we found a lawyer to do our trademarks. You can find reasonably priced lawyers there as well.

[chadknowslaw]

An LLC is a pass-through entity for tax purposes, so the state taxation rate where your LLC is formed does not matter -- the revenue and expenses flow through back to the owner, wherever that owner is located. So if you live in California and have a Wyoming LLC (a good location, actually) you pay California state tax on your online Wyoming LLC income.
Nevada and Delaware both have annual maintenance and fees; if someone tells you that a Nevada or Delaware entity is your best choice without asking you a lot of questions about what you intend to do, projected income, and long term plans, then you are getting advice from a talking parrot.

[PFLJayden]

Nevada and Delaware both have annual maintenance and fees

Oh boy do they ever!

Many think that once you form your corporation you only pay once to file the corporation...

With the Nevada Secretary of State's office, we are required to pay:
$125yr - Annual List of Officers
$125yr - Annual Business License (Doesn't matter what state you operate in, Nevada requires you to have their business license).
$75yr - (Can't think of the name) but it's Business Exempt Lic.

Plus we also pay out an additional $175mo for a small office where our registered agent is whom also keeps our corp. business records.

PLUS we have to pay the state of California for our entities which includes a business license, and to allow us to operate as a foreign corporation.

We pay probably pay roughly around $3,200yr with business fees, registered agents, licenses, annual listings, etc. And if your ever late EVEN ONE DAY! Trust me, it's not pretty. We were 6 days late on sending our annual list to Nevada... That $300 turned into almost $1,000 with all of the late fees.

When we first incorporated, we were incorporated out of Nevada and operating out of Southern Delaware. That didn't last long because Delaware does have a lot of fees. Depending on what your business does, you gain various tax breaks. In our instance, we had to earn more than $500,000 annually to pay taxes. Anything less we paid none.

A piece of advice... Seek a lawyer. Get a lawyers advice. I say this very bluntly because when we first incorporated, we did not know about all of the tax laws, how to fill out the corporate book, etc. Luckily, we had friends who shared their corp book information with us and allowed us to copy their forms and change them. Had they not done that and if we were ever audited, we would be fucked high in the sky.

First, I would figure out what your liabilities are going to be. I know you like to come up with new ideas all of the time which we talked about... Be 100% certain this is what you want to do. Develop yourself a small business plan (could be 1 paragraph or one page). Seek a lawyer, show it to him, see what the lawyer suggests. Go from there.

[chadknowslaw]

This is a good example of why I usually recommend to form your business entity in the state of your residence. Online businesses that are run from outside the United States have many choices before them, and the "Nevada or Delaware" parrots really don't think about all the details, they just know someone else has said "Nevada or Delaware" so many times they believed it.
Nevada and Delaware have advantages for stock corporations that have multitudes of stockholders, but for small, closely held businesses, not so much.

[Kirkman]

I realize my question contains a lot of what-ifs and research-it answers. Has anyone formalized their company outside of the US or western Europe? Would there be a benefit to creating a formal corporation in the US or Europe as opposed to elsewhere? (Specifically eastern/pacific Asia? This is where there are potentially a lot of research-it issues coming into play.)

[chadknowslaw]

A lot depends on the billing solution you want to use, and those requirements.

[HunkyLuke]

Yes, as Chad so wisely says, you need a presence in the zone where you are billing (either personal or corporate), for example, if you are billing through CCBillEU or EpochEU, you need a presence in Europe. It also depends on where you are physically located, and what your overall goal is with the corporate structure :specs:

[StunnerJesse]

I've heard (but don't know for sure) that they're cracking down on Nevada formations if the company doesn't actually conduct any business in Nevada.

I just setup a new Florida LLC for myself and it was a breeze. This time around I elected to form as an LLC but be taxed as an S-Corp. That way we won't have to pay taxes on any profits we decide to leave in the business until we take them out. Since we're treating members as W2 employees, we have to pay 2.7% of salaries to unemployment insurance but it is still worth it in the end on the tax front. Luckily, as members, even though treated as employees, we can opt-out of worker's comp coverage. I still have to send those forms in.