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by justinludwig
1236 days ago
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If you live in the US and you're setting up an LLC just for yourself, it's cheaper & simpler to form the LLC in the same state in which you live, since a) you can act as your own registered agent, b) you'll still have to register with the state in which you live anyway, and c) it'll be easier to set up a bank account. Delaware in particular can be more pricey than most states, since their infrastructure is oriented towards enabling third-party services (DelawareInc, IncNow, etc) instead of interacting directly with your business. Prepare to wait weeks for them to mail you copies of your documents unless you pay a third-party service to expedite. The advantage of forming in Delaware is that there's lots and lots of settled business case law; but that's generally not relevant to a sole-proprietor LLC. (It is relevant, however, if you're forming a company with the aim of raising venture capital -- in which case you really want a Delaware C-Corp, not an LLC.) |
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If you're required to run payroll (to uhhh.. pay yourself since you're now an employee of a separate corporation / entity): Gusto is ~$550/yr + the cash you need to pay yourself (which you have to now pay payroll tax on as well as personal income tax). Workers comp, disability and PFL insurance, unemployment insurance, yada yada. Since you're the only shareholder / executive, the minimum wage requirement probably won't apply to you [2][3] but your state might have a minimum requirement per quarter to be eligible for payroll.
All in all, expect around $low-single-thousands in expenses just for running and maintaining a C corp per year. You can purchase business items with your personal credit card to get off the ground as long as you keep a good accounting of them and reimburse yourself later but do not do the reverse. Read your corporate docs (bylaws etc), keep meeting minutes, even if by yourself and have a yearly shareholder meeting, even by yourself :D
Also, file your 83b election!
If this sounds like a lot, probably stick with an LLC in the state you live in :) Hope this helps and feel free to reach out! GLHF
[1] https://capbase.com/no-your-startup-doesnt-owe-thousands-of-... [2] https://www.dol.gov/agencies/whd/fact-sheets/17b-overtime-ex... [3] https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/s...