Where to register my LLC

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bddirect

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Jan 18, 2012
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Hi,

I've been researching a lot about where to register my LLC. It seems there may be a way for a purely online business to get around the corporate taxes of the state the owner resides in. If the person isn't doing business in that state, and has it registered in a state without corporate tax (like Nevada), it is possible to not pay that states tax.

Is this true in any circumstance? Or is it a myth?
 


papajohn56 said:
LLCs don't pay corporate tax, they're pass-through entities...
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Depends on how you set it up. LLC's are not recognized by the IRS so you have to elect on Form 8832 whether you want to pay taxes like an S-Corp or have the income flow through.

Pb.com said:
Delaware has the best laws for llc's. I have no clue about foreign ones....
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No they don't. Delaware is the preferred choice for large corporations, but LLC's are a different matter altogether.
 
Unarmed Gunman said:
No they don't. Delaware is the preferred choice for large corporations, but LLC's are a different matter altogether.
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Are you that ignorant or have you never talked to a lawyer and asked his opinion? Consult lawyers when in doubt about laws. Deleware and Nevada are the best options in the U.S. currently.
 
Pb.com said:
Are you that ignorant or have you never talked to a lawyer and asked his opinion? Consult lawyers when in doubt about laws. Deleware and Nevada are the best options in the U.S. currently.
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There are two things relevant here:

1.) You will pay taxes in the state you reside in on net income, assuming that state has an income tax, regardless of your business entity. The details will vary. Not doing this is tax evasion, period.

2.) The legal construct of an LLC still has some big gray areas. Some shadier CPA's will file things one way - most won't. The reason for this is simple. Congress creates bills and the legal construct of a LLC or S-Corp is defined. The IRS though is the regulatory body for taxes and they actually make the rules. And they fucked it up with LLC's - there was a period of time in the late 90's where you could elect - if you were daring - to not pay ANY income tax on LLC income, saving you about 15% gross off the top. The IRS put out a clarification afterwards saying this was not permitted, but as far as I know they never actually changed the regulation.

The way this will be defined eventually will be in court. Someone will push the issue and the IRS will sue them in criminal court. If they win, the IRS has it's precedent defined and will go after LOTS of other people. If they do not then they'll probably appeal and it will get stuck in the courts for years.
 
If your business is 100% internet based I like Delaware and UK.

I highly recommend Delaware for US based (proved far better for me than Nevada as far as ease and maintenance) and UK for offshore.

I've had corps in a number of offshore locations and UK worked out best form me. Note: The offshore corps where not tax dodges, I actually lived and worked offshore for many years.

I would not recommend a corp vs an LLC unless you plan on having many shareholders.
 
Unarmed Gunman said:
Depends on how you set it up. LLC's are not recognized by the IRS so you have to elect on Form 8832 whether you want to pay taxes like an S-Corp or have the income flow through.



No they don't. Delaware is the preferred choice for large corporations, but LLC's are a different matter altogether.
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S-corps are still pass through.
 
Pb.com said:
Are you that ignorant or have you never talked to a lawyer and asked his opinion? Consult lawyers when in doubt about laws. Deleware and Nevada are the best options in the U.S. currently.
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I am not ignorant on matter of business my friend. I have owned two LLC's in Delaware and two in Michigan. I'm not a lawyer or a CPA but I do pay good money for legal advice from both. I can assure you that the blanket statement you made that "Delaware is best" is foolish and I would strongly advise anyone just setting up their business structure to ignore your post and do some research.

JerseyJoe said:
s-corps are flow through
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papajohn56 said:
S-corps are still pass through.
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Let me clarify - if you elect on Form 8832 to be taxed as an S-Corp you will avoid the self-employment tax that you would pay if you leave your LLC set up in the default manner. I've saved tens of thousands in taxes by electing to be treated as an S-Corp. Look at the corresponding tax rates on salary vs distributions if you guys don't know what I'm talking about.
 
Unarmed Gunman said:
Let me clarify - if you elect on Form 8832 to be taxed as an S-Corp you will avoid the self-employment tax that you would pay if you leave your LLC set up in the default manner. I've saved tens of thousands in taxes by electing to be treated as an S-Corp. Look at the corresponding tax rates on salary vs distributions if you guys don't know what I'm talking about.
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yes I know because I have the same setup for one of mine, but it's still pass through. It just means you're paying a salary and then taking a profit as a distribution to a shareholder.
 
papajohn56 said:
yes I know because I have the same setup for one of mine, but it's still pass through. It just means you're paying a salary and then taking a profit as a distribution to a shareholder.
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That's a significant difference in the way you are taxed though. Saying that the profits just "pass through" would probably confuse people that are just starting to research how to set-up their entity. There is a huge difference and people should be aware of it, particularly since the default treatment by the IRS is to tax LLC's as a "disregarded entity"...
 
LLCs will be a pass through dum ass. Meaning whatever profits or losses gets transferred to the 1040.

seo guy going global up in here.
 
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