corporate-law nevada incorporation delaware
Creating a LLC in Delaware when I am in California?
<p>If I live/work in California can I create an LLC in Delaware (or possibly Nevada)?  I've read that it's much cheaper and overall a better idea to have an LLC in Delaware. But I don't live out there, have an office out there or have any other connection - I'm all California.</p>

<p>If I created an LLC in Delaware would I receive all of the protections that being a corporation offers?  Would there be any tax implications that I should know about?</p>

<p>If your company does not have or does not plan to have a physical location in Delaware, you are required to use a Delaware Registered Agent for your LLC. A "Registered Agent" is a business in Delaware that you contract with which provides a physical address and contact information for your LLC in Delaware while you are out of state. Delaware <a href="http://delcode.delaware.gov/title8/c001/" rel="nofollow noreferrer">General Corporate Law - Title 8</a> allows for this.</p>

<p>Googling "Delaware Registered Agent" will show you many different private companies who you can hire for your LLC; they can tell you the requirements for an LLC, how using an agent impacts corporate protections, tax liabilities, and everything else you need to know.</p>

<blockquote>
  <p>If I live/work in California can I create an LLC in Delaware (or
  possibly Nevada)?</p>
</blockquote>

<p>Yes.</p>

<blockquote>
  <p>I've read that it's much cheaper and overall a better idea to have an
  LLC in Delawar[e].</p>
</blockquote>

<p>It is definitely not cheaper, indeed, it is substantially more expensive, not just to form an entity, but to maintain one year to year in annual fees from the state and from hired registered agents, and is further more expensive because internal LLC disputes would have to be litigated in the chancery courts of Delaware which would be very expensive for California based parties.</p>

<p>The argument that it is a "better idea" to have an LLC in Delaware is dubious at best. The main benefits of Delaware entities involve its case law and statutes applicable to publicly held corporations, for whom Delaware litigation forums, high formation fees and annual filing fees are trivial.</p>

<blockquote>
  <p>If I created an LLC in Delaware would I receive all of the protections
  that being a corporation offers?</p>
</blockquote>

<p>Yes.</p>

<blockquote>
  <p>Would there be any tax implications that I should know about?</p>
</blockquote>

<p>You would not be subject to Delaware state income taxes simply by having a Delaware law organized LLC.</p>

<p>Delaware does impose significant registration fees on its LLCs (hundreds of dollars a year). </p>

<p>Also, if you have a Delaware LLC you must also register to do business in California and pay California Franchise Tax Board taxes in connection with doing business in California. California and Delaware are two of the states that most heavily tax doing business as an LLC.</p>

<p><strong>Conclusion</strong></p>

<p>It is very unlikely that you would benefit in any way from having a Delaware LLC unless you intend to do something radical (and probably foolish and problematic) like eliminating all fiduciary duties of the managers to the LLC, or you have a very elaborate ownership structure, or you are a division of a publicly held company incorporated in Delaware.</p>
