Can You Register An Llc In Florida With The Same Name Llc Indelaware

6 Reasons Why You Shouldn't Form an LLC in Delaware (for U.S. residents)

Annotation: If y'all live in Delaware, or exercise business in the land, then this data does not apply to y'all. You should form an LLC in Delaware.

If yous don't alive in, or do business organization in Delaware , and yous've heard that you should form an LLC in Delaware, let me relieve yous a lot of money and headaches: you should not form an LLC in Delaware .

The disadvantages of forming an LLC in Delaware far outweigh any "advantages" y'all may have read.

Let's look at an example:

Nathan is from Connecticut
He read online "Delaware is the best country to form an LLC"
He forms an LLC in Delaware
He is a resident of Connecticut
He already pays taxes in Connecticut
His home role is in Connecticut

Near people are unaware, but in that location are a handful of issues with this setup…

Nathan's DE LLC is doing business concern illegally in CT. The CT Secretary of State enforces its laws and will presently be sending Nathan a citation and a fine in the mail.

Needing to Register a Strange LLC

To remedy the above citation (and considering information technology's the law), Nathan must at present register his DE LLC as a "Strange LLC" in CT.

He start needs to file a Connecticut Foreign LLC Registration and pay the country filing fee ($120). He must and then keep his Foreign LLC in compliance with CT police force. That ways filing a Connecticut Annual Study every year ($20), as well every bit paying the Business Entity Tax ($250) every other year.

Call back, this is on top of already paying the $90 filing fee in Delaware, the $300 required Annual Franchise Tax in Delaware, and the $125 annual fee for his DE Registered Agent.

In brusk, Nathan at present needs to maintain 2 LLCs. A "Domestic LLC" in Delaware and a "Foreign LLC" in his home state of Connecticut.

Information technology gets worse…

Taxes Are Paid Where Coin is Made

Nathan was deceived into forming an LLC in Delaware considering he read it was a "tax-friendly state".

And while this is true, it really only applies to big, multi-one thousand thousand dollar Corporations, not small business LLCs.

And don't just take our word for it. Read what the Delaware Secretary of Land has to say about the hype:

Delaware Corporate Law: Facts and Myths

Nigh people are unaware of this i simple fact: taxes are paid where the money is made.

That means Nathan notwithstanding owes Connecticut taxes, which could include (merely are not express to) sales and use tax, business organization entity tax, withholding tax, corporate business taxation, net income tax, surtax, franchise tax, property tax, and more.

And retrieve, Nathan is a resident of Connecticut. And an LLC is a laissez passer-through entity. Which means the profits from his LLC are reported on his federal income tax return, as well as his Connecticut personal income revenue enhancement return.

In brusque, the whole reason he formed the DE LLC is defeated. It's not saving him any money on taxes. In fact, this whole "loophole" is unknowingly costing him a lot more money.

Merely What Near the Delaware Court of Chancery and Delaware Law?

I'thou sure yous've read something along these lines: "The Delaware Courtroom of Chancery is the oldest and most established business organization court in America," and "Delaware has the about robust business case law."

Who cares!

What are yous starting: some lawsuit-rampant company where you're going to court every other month?

Take a reality check. Virtually of these companies promoting Delaware don't give a crap virtually your business'due south long-term success and well-being. They only desire your money.

Don't be misled into the headaches. Focus your free energy on running a legitimate and successful company in the land where you actually live and do business.

We go painful phone calls from many of our readers virtually these bug. Recently a man from Pennsylvania who runs a trucking company (in PA) formed an LLC in Delaware.

Later, when he tried to annals his trucks with the Department of Transportation, they denied his application because he was not a resident of Delaware. This ended up costing him over $20,000 in business that month.

Instead of listing out dozens of other examples, nosotros but desire to warn you lot that you'll likely hit manufacture-specific "quirks" with LLCs registered outside the land where you reside and/or actually do business.

Takeaway

Instead of:

forming an LLC out-of-land and so later on learning that you lot need to annals your out-of-state LLC as a Foreign LLC in your home state,
paying for an extra Registered Amanuensis,
paying annual reports in 2 states,
having taxation liabilities in ii states,
and dealing with the headaches of maintaining 2 LLCs,

just form your LLC in your home country, or the state where yous are doing business organisation. If you'd like more information on why it's best to form an LLC in your home state, please see this video.

"But I Work Online!"

Even if yous run an online business organization from home, you are nonetheless a resident of your home state and you are withal transacting business in that state. You cannot get around your state'southward tax obligations simply past forming an LLC out-of-state.

Put your time and free energy into building a successful company, not wasting your time on a handful of "loopholes" you read on the internet.

If yous live in, or do business in Delaware

Then this article does not apply to your situation. You lot should class your LLC in Delaware. Become stride-by-step instructions on how to do that here: How to Class an LLC in Delaware.

Matt Horwitz

Founder & Educator, LLC University®

Matt Horwitz has been the leading expert on LLC pedagogy for the past decade. He founded LLC University in 2010 subsequently realizing people needed unproblematic and actionable instructions to starting time an LLC that other companies weren't offering. He'south cited by Entrepreneur Magazine, Yahoo Finance, and the United states Chamber of Commerce, and was featured by CNBC and InventRight.

Matt holds a Bachelor's Caste in business from Drexel Academy with a concentration in business constabulary. He performs extensive inquiry and analysis to convert state laws into simple instructions anyone tin can follow to form their LLC - all for complimentary! Read more about Matt Horwitz and LLC University.