I'm Moving: Taxes and Business Structure

[Rerun]

I'm speaking with tax and small business attorneys, but know there are some smart, experienced people in here that might be able to offer some tips. Hoping GlobalWealth may be able to chime in, as he seems to be the expert here...

I have a Single-Member LLC, elected as an S-Corp. I'm moving across the border to another state, and from what I've gathered so far it seems the best option is to dissolve my existing LLC and start a new one. Otherwise I have to register as a foreign corp and end up filing in both states.

One issue with this is that I've built a pretty substantial line of credit. By starting a new business will I have to re-establish and build credit all over again? Or will my history follow me?

The other consideration I have is if I'm going to go through the trouble of forming a new company, I'd like to possibly do it a little differently. Two things come to mind specifically..

1. Currently I'm very exposed. You can search the state LLC databse online, and my name is right there as the registered agent. Secondly, you can drill down to see I am also the sole member... where my home address is listed (in addition to the business address). While this has yet to be an issue, this frightens me.
2. As a Single-Member LLC, I don't believe my personal assets are entirely protected as well as they should be.

Would forming an LLC as a "holding company" of sorts, which in turn own the LLC that actually does business solve these issues? In other words, would an LLC owned by an LLC provide an added level or privacy and personal asset protection.

If so, can an LLC elected as an S-Corp be owned by an LLC?

I have some other business ventures I'd like to pursue within the next 6 months, so having these new businesses owned by the holding LLC may have an advantage as well.

 

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[GlobalWealth]

I almost never recommend registering an LLC in your home state. Most states have no regard for privacy and you are fully exposed creating potential liability issues.

This is typical as most people attempt to save money thru the DIY route, but unless you know what you are doing (ironically most people think they do...) you are creating potential future problems. Remember, if you are serious about your business then you need serious advice.

In you case, I would probably re-domisticate the LLC in some place like Wyoming and create a Private Wyoming LLC. You may need to register it as a foreign entity in your home state (but maybe not depending on the nature of the business).

Wyoming also has the best laws protecting single member LLCs.

 

[wade1mil]

I almost never recommend registering an LLC in your home state. Most states have no regard for privacy and you are fully exposed creating potential liability issues.

This is typical as most people attempt to save money thru the DIY route, but unless you know what you are doing (ironically most people think they do...) you are creating potential future problems. Remember, if you are serious about your business then you need serious advice.

In you case, I would probably re-domisticate the LLC in some place like Wyoming and create a Private Wyoming LLC. You may need to register it as a foreign entity in your home state (but maybe not depending on the nature of the business).

Wyoming also has the best laws protecting single member LLCs.

Interesting. Are there cases in which you would not recommend Wyoming, or is that pretty much standard? I live in California now and will be moving to Texas early next year. Are there any complications when moving your business to a different state? Thanks for the advice.

 

[Rerun]

Speed+++

Thanks for that! So it looks like I can keep my existing company, tax id, credit, etc. by re-domesticating to Wyoming. That's perfect!

Even though I do not currently have clients in Wisconsin (my new state), I'll have an office and employees there so I believe that qualifies me as doing business in WI, and therefore have to register as a foreign corp. Sound right?

It also seems like because of the superior Wyoming laws, that there is no need to create a shell/parent LLC to further protect my privacy and assets?

 

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[GlobalWealth]

Are there cases in which you would not recommend Wyoming,

Each situation is different. A Private Wyoming LLC is great for many types of businesses; owning assets, real estate, IP, websites, etc. I mention Wyoming because you can re-domestic there making your life a bit simpler.

 

[GlobalWealth]

therefore have to register as a foreign corp. Sound right?

yes.

It also seems like because of the superior Wyoming laws, that there is no need to create a shell/parent LLC to further protect my privacy and assets?

Not necessarily.

 

[MrChill]

This is an older thread, but worth a bump. Does anyone have a law firm they recommend using (or avoiding) in Wyoming to create an LLC? I'm considering buying residential (and perhaps commercial also) property within the state such that I can:

1. Take advantage of the no personal income tax
2. Take advantage of the no business taxes, low filing fees and other business-friendly incentives

Any pointers would be most welcome.

 

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