

Ask HN: Where to form an LLC - gamache

I send you this file in order to have your advice.<p>I am looking to form an LLC for software consulting purposes.  I do not expect/intend for it to grow into a VC-backed entity so I am not considering S-corp.  I am the sole proprietor of this LLC-to-be.<p>I live in Massachusetts, and I expect most of my work will be in MA too.  But I hear that it can be advantageous to form the LLC in another state; Nevada and Delaware come up most frequently.<p>I would love some tips, stats, suggestions, URLs, horror stories, relevant code snippets, or anything else that might help me on this quest.  Thank you News Hackers!
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menloparkbum
You want to form the LLC in the state where you live and do all your work.
There is no advantage to forming an LLC in a different state. Other business
entities (S, C corp) are a different story.

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hbien
I'm not a lawyer, but I definitely agree you should form an LLC in your home
state.

For CA, I thought forming an LLC in another state would save me $800/year. But
after some research, it doesn't matter where you form your LLC. If your
business is operating in California you still have to pay the $800 yearly fee.

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jhancock
Given your parameters, the thing to keep in mind is where you are incorporated
in case you need to defend yourself in a lawsuit. It is almost always better
to defend on you home turf as opposed to taking trips and hiring lawyers in
Delaware.

IANAL, but I have been involved in lawsuits. Home turf advantage can be a good
thing.

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gamache
This is a very good point, and one I had failed to consider.

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skmurphy
Someone in your situation based in CA would be better served to form a Sub-S
as the tax treatment is more favorable. You should talk to a tax accountant
(not just an attorney) about the tax implications of LLC vs. Sub-S in MA,
there may be similar issues.

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ddemchuk
I'm looking to start a LLC very soon as well, but my business partner lives in
Virginia and I live in California...What state should we choose at that point?

(don't mean to thread jack)

