April 10, 2020
Should I Form a Company in Nevada, Wyoming, or Delaware? – All Up In Yo’ Business

Should I Form a Company in Nevada, Wyoming, or Delaware? – All Up In Yo’ Business


Hi everybody I am attorney Aiden Kramer with
the office of Aiden Kramer in Colorado. Welcome back to All up in Yo Business! So I put up a video a few weeks ago about
why do so many companies form in Delaware and that sparked questions from you guys about
other states that are popular for forming businesses like Nevada and Wyoming. Those three states Nevada, Wyoming and Delaware
are all very very popular for out of state companies to register in. Whether it’s LLC, Corporations whatever a
lot of companies form under the laws of Delaware, Nevada, Wyoming even if they aren’t physically
located in those states. So I wanted to talk about Nevada and Wyoming
since it came up when we were talking about Delaware. What we are not going to do in this video
is go through all of the pros and all of the advantages that Nevada and Wyoming provide
to companies. Number one because they are pretty similar
to Delaware. If you are wondering why people form in Delaware
watch my last video about that and the advantages pretty much all apply to Nevada and Wyoming
as well. Business friendly laws, low or non-existent
taxes all three states provide similar benefits to companies. The second reason I am not going to go into
too much detail about Nevada and Wyoming is because same with Delaware it just doesn’t
really matter to most companies. These benefits that these states provide unless
your company is physically located in one of those states you are not really going to
see any advantage or any benefit to forming in a state that is not where your company
is physically located. So lets say your business your office is located
in Colorado but you read something on the Internet or one of your friends tells you
no, no you shouldn’t form in Colorado form in Nevada they don’t have any personal income
tax form in Nevada. If your company is physically located in Colorado
even if you form an LLC in Nevada you are still going to have to register in Colorado. You are still going to have to register as
a foreign LLC or foreign entity in Colorado even though your also registered in Nevada
and guess what Colorado does have income tax so you may be getting out of paying them in
Nevada but you are still paying them in Colorado. You are paying them the same whether or not
you had formed in Colorado as a domestic entity or if you formed as a foreign one. You are still going to be paying taxes in
Colorado. So now all you’ve done by forming in Nevada
is instead of Colorado is you pay two filing fees. I don’t know exactly what Nevada’s filing
fee is to form an LLC but I am assuming they charge something. Colorado charges something so now you’ve paid
two states to form an LLC and in a year Colorado is going to make you file a periodic report
and I am assuming Nevada’s going to make you file something annually also. So now you’re paying taxes, you’re filing
in two different states. If you get sued maybe Nevada’s going to provide
you some benefit but really if you are doing all of the other things that I’ve told to
avoid piercing the corporate veil you’re going to get that same protection in Colorado. The courts are probably going to decide the
same way regardless of Nevada or Colorado. So just as I said in the Delaware video unless
your company is going to be public, like you are going to be issuing an IPO and going public
on the stock exchange or if you are seeking millions and millions of dollars from investors
you are not going to get any benefit from forming in a state that is not the state where
your company is physically located. If your company is in Nevada or in Delaware
or in Wyoming then take advantage of those laws and form in that state where you are
located. But for 90% if not more small businesses normal
businesses there is not going to be any advantage to forming in Nevada or Wyoming or Delaware
or any other state unless your company is actually located in that state. You are just going to end up paying two states
and you are going to end up having to worry about the laws of some other state in addition
to the laws of your state. So to summarize in case you guys didn’t pick
up on it my position is that it’s not worth it. Don’t waste your time, don’t waste your money
form in the state where your company is located. On a completely different topic I dusted off
my old shirt, do you guys remember Twilight? Remember that thing Twilight that was really
big a few years ago? Well I dusted off my old Team Jacob shirt. I really liked Edward, really he was my favorite
but I thought Jacob was just better for Bella and he was more of a man. I thought Edward was kind of a puss, am I
allowed to say that? I thought Edward was kind of a kind of whiny
but so I was Team Jacob. Go ahead an comment below were you Team Jacob
or Team Edward? Or team none of it maybe you were a Harry
Potter fan? I don’t know. Making the decision of where to form your
company, what state to register under and if you need to register in other states as
well it’s very dependent on your states laws and your own circumstances so it is always
always a good idea to talk to an attorney about that. Don’t just willy nilly go registering in Nevada
or Delaware talk to an attorney about it first and make sure you are making the right decision. If you are in Colorado or wondering if you
should form a company in Colorado I am happy to help, feel free to contact me my phone
number and email are below. Thank y’all so much for watching I’m Aiden
Kramer and I’ll see ya next time!

57 thoughts on “Should I Form a Company in Nevada, Wyoming, or Delaware? – All Up In Yo’ Business

  1. so the moral of the story is…

    dont register your ice cream truck in those states unless you/your biz resides there

    it would be pointless…that money would be better spent restocking your orange pushups, nutty buddies, and coconut bars…duh

  2. How does this all apply to someone who travels 100% of the time and is a one-man operation where physical location is trivial? If I had a choice to incorporate in delaware vs. a state like Illinois for example (I use IL as an example because their charging order laws are – frankly – abysmal) I would chose Delaware regardless of maybe having to register as a foreign corp in IL. What are your thoughts on the "Traveling Consultant" dilemma?

  3. let's see : Property holding LLC Nevada. Corporate situs Miami Beach. Operating LLC- Bahamas Or Belize or Isle of Man. I Got it !!!!!

  4. Would Colorado courts judge the same way Nevada did in Rowland v. Lepire. They didn't have any minutes book, was BADLY underfunded, took on a project that cost more than their contractor's license allowed, was run by a couple guys, where "there was little existence, separate and apart". Their only redeeming quality was that they kept a corporate account and didn't commingle funds. http://www.leagle.com/decision/19831994662P2d1332_11989/ROWLAND%20v.%20LEPIRE (look at the alter-ego section)

  5. What about something like a Virtual Assistant? There's no telling where clients will be living, and there likely won't be any physical building.

  6. What is the case for an LLC holding Commercial Real Estate in multiple states? Would there have to be a foreign LLC formed for each state where property is held?

    Thanks for the resources by the way, they are great!

  7. Would it benefit to open an s-corp in wyoming if I wanted to sell random things on Amazon? Or how about a non-profit that teaches meditation for free (not on the internet though)? Since I live in New York, I would still be paying for and babysitting the laws and fees of both wyoming and ny? thanks Aiden!

  8. If I form a llc in Delaware and have an office in Delaware, but I live in mn, do I have to get a foreign llc certificate in mn because i live in mn and manage my business in mn?

  9. Hi Aiden
    I am starting a website that will be ad based. (I won't be selling anything other than ad space and there will be no subscription fees). I am an US citizen living in Austria, have my voter registration and Drivers License address in Los Angeles, and the servers will be located in Europe. I will be selling ad space to anyone on the planet. I want to set up the official address of the business in Delaware. Using Delaware as my corporate website address doesn't cause the issues you mention about registering in one state and business existing elsewhere does it ? Hope this makes sense. Thanks!

  10. Happy New Year Aiden and thank you for all the valuable information you share so freely. I live in PA, but I have a Wyoming LLC for my eCommerce business. I'd like to start another business that will be physically located in PA, so I'd like to incorporate that new business here in PA, but have my Wyoming company own it as the umbrella company . In your opinion, does that make sense to do for liability protection and would the Wyoming corporation have to file in PA as a foreign entity, as the owner even though it's not doing business in the state?

  11. What if I don't transact in the state I reside in? Would incorporating in one of these states be beneficial? Thanks in advance, great channel!

  12. You are funny, Aiden. I love Twilight and prefer Edward. 🙂 I am looking to set up an LLC for online business. I am a non-resident alien in Oklaholma on a student visa. Will email you.

  13. thanks for the video,please tell me,what state do you recommend for online trading on Amazon,without opening a physical office.all of the work online only.1 owner is not a resident..they Say that Wyoming,Nevada and Florida like each other,but Florida is much more expensive in terms of content, LLC,annual renewal and services annual accountant..which option do you recommend?

  14. Question: If I established my LLC in one state that I don’t live in, do I need to register the state that I currently live in as a foreign LLC? I was confused on this because I own an online business. I am not sure how this applies when it comes to an online business. Please help.

  15. +The Law Office of Aiden H. Kramer, LLC

    After watching this video of yours Attorney Kramer, I must ask:

    What are your thoughts and feelings of Garrett Sutton, Esq. advocating for business owners to set up and utilize particularly Nevada and Wyoming business entities for business owners whose businesses are based outside of these two states?

    By the way, Garrett Sutton, Esq. is the lawyer for "Rich Dad, Poor Dad" author Robert Kiyosaki and Attorney Sutton's website are corporatedirect, sutlaw, and successdna (dot com for each).

    Attorney Sutton especially has articles in his corporatedirect website pertaining to the use of Wyoming entities especially (slide to RESOURCES and ARCHIVES to find them if you're interested.

    UPDATE: To be more specific on my original question, if I'm a Maryland business owner for example and my business is an LLC in MD, what are your thoughts and feelings if I have a Nevada or Wyoming LLC own my Maryland LLC for asset protection purposes particularly?

    Again, this is something Attorney Garrett Sutton advocates.

  16. Team Star Wars here
    By the way, I watched five of your videos and subbed to your channel. There is awesome content.

  17. am not a huge Twilight fan, I was more into Harry Potter, but am definitely on team Jacob!!! I think the Twilight series cheapened the vampire name, only respectable vampires were the veldt Tori lol

  18. When I sign up for an llc in Wyoming, should I put myself down as a private member, secretary, or is it best to have a lawyer set it up for me???

  19. Why does Colorado make it more expensive to do business, work or retire in Colorado? Colorado taxes SSI correct?

  20. Aiden, I live in Michigan but have a virtual business wholesaling houses in California. Would forming a Nevada Corp in this case still not be worth my while? Thank you

  21. So as it relates to a non-brick and mortar business (i.e. internet based) does it really make a difference where you form a LLC?

  22. However a ‘remote online business’ has different rules. You are able to use your physical address in a differing state ?

    Yes ! or No !

    As I have been informed for. A Russian business guru that a Delaware, Wyoming etc That a Remote Online Business Model NAICS Code: 454100 can be run from any physical business address as no physical business transactions are happening / taking place on the premises. Not just the state the LLC was formed in ?

    Correct ? Yes ! Nor No !

  23. So I live in CA and plan to do business in CA. I was thinking about registering an LLC out of state like Delaware, but then I read that you would have to still register as a California foreign LLC. Would I have to pay TWO franchise taxes if I decide to register out of state?

  24. What if we’re running an online business while traveling? I currently reside in California, but due to my current job, I pass through many other states including Nevada every now and then. Do I have the choice to register in Nevada and opt out of registering in California if I can get a physical address in Nevada?

  25. I don't live terribly far from Forks, WA where "Twilight" was based, but was in college (in Hawaii) when those movies came out and didn't get a chance to see them. I came back to visit my hometown and was wondering why stores were selling Forks High School branded things since we had our own high school. Someone had to explain it to me lol.

  26. This isn't very informative. Some people have online companies without a physical location. For people that have online companies and work for themselves, many move to other countries. So what then? haha.

  27. If I shoot music videos and live in California, but I want to form an LLC in Nevada do I have to register in CA? I do not have a physical office in California, all my music videos are booked online and I shoot them on location anywhere. Just wondering 🤔

  28. What about identity protection? In Arizona, anyone can look up the members but in Delaware that information is not public. Thing that sucks about Delaware is their $300 annual tax.

  29. How does this apply for a online ecommerce business shipping worldwide? Essentially I can operate in any state/country in the world.

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