| Have learned a ton about LLC formation in Delaware + other states from working on https://startpack.io. tl;dr if you live in the US form an LLC in your home state, if you don't Wyoming is a very popular option for online, digital businesses / ecommerce businesses, and Delaware is so popular because, in my opinion, it has "prestige" but as an international resident, you won't automatically get tax savings by being in Delaware vs Wyoming for example (if you don't have a physical presence in the US) If you live in the US -> form an LLC in the state you live in. If you form an LLC outside of your home state you’ll be required to register that out-of-state LLC as a Foreign LLC in your home state. For example, if you form an LLC in Nevada (but you don’t live there), then you’ll be required to register that Nevada LLC in your home state (as a Foreign LLC) in order to do business in your home state. This means you now have 2 LLCs (one in Nevada and one in your home state) so you have to pay 2 State filing fees and 2 Annual report fees If you don't live in the US -> you can form in any state. If you are an online digital business Delaware and Wyoming are the two most popular states. Delaware is the most popular state in the US for business formation. I think part of this is because of 1) the prestige of creating a "Delaware C Corp" in the state and 2) it does have a very solid business reputation. However if you are an international, online business, Delaware might not be the best option if you are trying to save $. In Delaware there is a $300 annual payment due to the state each year. Wyoming is extremely popular for LLC formation for international residents because of the lower ongoing annual fees ($50 vs $300 in Delaware). Wyoming has also built a reputation as one of the most popular state for non-residents who are online businesses or e-commerce businesses. Also dont sleep on Wyoming's prestige as well; it has a friendly business environment and has even been called "The Switzerland of the Rocky Mountains." Again the thing here which is important to highlight is you end up creating twice the work / twice the costs if you live in the US and form an LLC outside of the state you "do business in" so be careful here! And internationally, if you're forming an LLC, you can choose any state and if you don't have a physical presence in the US, you actually might not have a US tax filing requirement, but you do have an informational filing requirement if you are a foreign owned US Single Member LLC (Form 5472/1120). If you are a foreign owned multiple member LLC, you file a partnership return. And if you are an LLC that elects to file as a C Corp you file a C Corp return! |
Lets say hypothetically someone operating IT consultancy service didn't know about that requirement, is running company 5+ years, has EIN, paid LLC Delaware annual tax but never filled those forms.
1. What in that kind of hypothetical scenario should that person do?
2. Does the penalty for not filling it would affect that person LLC only (as disregarded entity)? so basically he would not be personally liable ?
3. Does your site offer filling those forms as a service?