Starting a LLC...where

[katiekate32]

What is the name of your state (only U.S. law)? DE

Let me start by saying that the business will be NOT really be operated in just one State.
I am looking to have the manufacturing done first by individuals who would be anywhere in the USA..long term I want to have a manufacturer doing it so I can get higher volume.. maybe a company I found in Wisconsin.

Longer term my the customers are all over the USA. The early sales are exclusively in Delaware...but..my customers move all over the USA throughout the calendar year, so I will be shipping to them with future orders. The sales will be initially done in person by sales people, first in Delaware..but anywhere in the USA throughout the calendar year (because my customers move around the USA all year long). Established customers will be able to re-order through a web site.

I plan to have all finished product shipped into Delaware, from there broken down to ship to the customer.

Does it make sense to use Delaware because of the lack of sales tax?
Does it make sense to incorporate there?

As an aside... I have several logistic issues to solve...anyone know a website/chat area where I might connect with people who could give me advice? Maybe even a business contact that can just handle the logistics for me outright?

 

[Just Blue]

What is the name of your state (only U.S. law)? DE

Let me start by saying that the business will be NOT really be operated in just one State.
I am looking to have the manufacturing done first by individuals who would be anywhere in the USA..long term I want to have a manufacturer doing it so I can get higher volume.. maybe a company I found in Wisconsin.

Longer term my the customers are all over the USA. The early sales are exclusively in Delaware...but..my customers move all over the USA throughout the calendar year, so I will be shipping to them with future orders. The sales will be initially done in person by sales people, first in Delaware..but anywhere in the USA throughout the calendar year (because my customers move around the USA all year long). Established customers will be able to re-order through a web site.

I plan to have all finished product shipped into Delaware, from there broken down to ship to the customer.

Does it make sense to use Delaware because of the lack of sales tax?
Does it make sense to incorporate there?

As an aside... I have several logistic issues to solve...anyone know a website/chat area where I might connect with people who could give me advice? Maybe even a business contact that can just handle the logistics for me outright?

I will suggest you hire an attorney to assist you in this business. This site does not give referrals as that would be unethical.

 

[katiekate32]

ok.. that was just an aside... the main question is LLC in Delaware..pro/con?

Given the nature of the distribution.... does it make more sense to do the LLC in Delaware...or where?

 

[Just Blue]

Given the nature of the distribution.... does it make more sense to do the LLC in Delaware...or where?

Whatever works for you as the owner. Where you choose should be the location of the attorney to legally assist you.

BTW...If you are located in a "sales tax free" state but are dealing with other states that DO have sales tax, you are required to collect said tax and report. Hence your NEED to enlist an attorney and an accountant that SPECIALIZING in these intra-state businesses.

 

[justalayman]

when determining the state, you have to keep a couple things in mind;

you have to be able to sustain the business presence as required by the germane state. If you create the business outside of DE, would you be able to meet the rules of any other state? (physical presence of a place of business (offices) is often required)

If you organize in another state, are you willing to go to that other state to deal with legal issues? If you are sued, it would be reasonable to believe the suit could be filed in the state of organization. That would mean you would have to obtain legal counsel in that state as well as travel to that state to deal with any issues in their court.


Your mention of the tax issue is very important as well.

those are only a few of the considerations to address when making a decision. You might attempt to see if there is a local chapter of the Small Business Administration in your area. You can contact them on their main website as well. That might help you with the answers to the questions asked here as well as many others you will likely have.

 

[FlyingRon]

Incorporating in Delaware doesn't get you out of sales tax responsibility in states that you have situs in. Our company had situs in four or five states even though the offices in some states had nothing to do with the product being sold.

Unless your home state has some egregious LLC treatment (even California isn't bad), it's probably easier to make the LLC there.

 

[katiekate32]

I have no home State

I am just like my customers...I move around a 'circuit' which is not fixed in length of time or place.


I might be in Delaware for 2 months, then Massachusetts for 1 more, then off to W. Virginia for 2 more months, then back to NJ for a few weeks..then, down to Miami for 5 months..then...

Next year it might be Maryland, followed my Virginia, Penn., w.virginia ...etc.

I have no preference for any State.. and, except that I never seem to go west...don't care where I am or where the Corp is.

I could establish a short term warehouse in Delaware, and a corp. mailing address.
I think I only need Corporate space in De of not less than 6" by 6"...basically a mailbox.

 

[FlyingRon]

Actually all you need do is hire a registered agent there. I know you are nomadic but where do you consider your residence?
Most states require corporations to have a registered agent (can be yourself) whose either a resident or maintains an office. Delaware requires, for example, that that office be open for business (i.e., a mail box will not cut it).

Where do you pay your personal taxes, or is that up for grabs as well?

 

[latigo]

What is the name of your state (only U.S. law)? DE

Let me start by saying that the business will be NOT really be operated in just one State.
I am looking to have the manufacturing done first by individuals who would be anywhere in the USA..long term I want to have a manufacturer doing it so I can get higher volume.. maybe a company I found in Wisconsin.

Longer term my the customers are all over the USA. The early sales are exclusively in Delaware...but..my customers move all over the USA throughout the calendar year, so I will be shipping to them with future orders. The sales will be initially done in person by sales people, first in Delaware..but anywhere in the USA throughout the calendar year (because my customers move around the USA all year long). Established customers will be able to re-order through a web site.

I plan to have all finished product shipped into Delaware, from there broken down to ship to the customer.

Does it make sense to use Delaware because of the lack of sales tax?
Does it make sense to incorporate there?

As an aside... I have several logistic issues to solve...anyone know a website/chat area where I might connect with people who could give me advice? Maybe even a business contact that can just handle the logistics for me outright?

“Incorporate” and LLC?

That would be novel. An LLC is not a corporation!

Whatever, not matter where the entity is domiciled (initially registered), in order do transact interstate business in any other state, it - an LLC or a business corporation - must first be registered as a foreign such entity – in most with the office of the Secretary of State. (Example in case of an LLC - California Corporations Code - Sections 17450-17457)

Also, all specified business activities within the foreign state will be subject to the same taxation laws that affect a given state’s domestic entities that are similarly engaged in both in and out-of-state commerce.

But do not be so foolish as to try to package this without professional help! Particularly if you wish to enjoy the benefits of personal immunity as afforded by these various LLC Acts.

Personal immunity is available, of course. However, it is a conditional protection. And available to LLC members ONLY if the business is properly organized, structured, registered and maintained as a solely independent, autonomous being!

Moreover, your odds of receiving the personal benefits of the Acts will be greatly reduced if you chose to “learn” as indicated (chatroom logistic experts, etc.), rather than paying for professional help.

 

[katiekate32]

well.. florida

I use my Florida property for my residence...although I am almost never there. (driver's lic. etc.)
Mostly just so the IRS has a place to call residence for me. The DMV doesn't care and will send my license (etc.) to me anywhere I am. Otherwise, never get mail there.

Well... of course, I misspoke..I didn't mean LLC. This business has pretty close to zero need for the owners to be protected in that manner.

I don't want this Corporation to be confused with me personally. I have ownership in an LLC already for a separate business...nothing to do with this new manufacturing business I have started.

 

[davew128]

BTW...If you are located in a "sales tax free" state but are dealing with other states that DO have sales tax, you are required to collect said tax and report. Hence your NEED to enlist an attorney and an accountant that SPECIALIZING in these intra-state businesses.

I suggest you read the Quill case before posting more incorrect advice about INTERstate sales.

 

[BigMouthWino]

I use my Florida property for my residence...although I am almost never there. (driver's lic. etc.)
Mostly just so the IRS has a place to call residence for me. The DMV doesn't care and will send my license (etc.) to me anywhere I am. Otherwise, never get mail there.

Well... of course, I misspoke..I didn't mean LLC. This business has pretty close to zero need for the owners to be protected in that manner.

I don't want this Corporation to be confused with me personally. I have ownership in an LLC already for a separate business...nothing to do with this new manufacturing business I have started.

You are all over the place (literally and figuratively) and it is difficult to advise you because you make it difficult to determine what you are trying to achieve. I will advise you that if you are going to form an entity that has pass-through taxation (i.e. LLC, S-Corp) you will find your life much easier if you form the entity where you file your state income taxes. You have a benefit in Florida since there is no state personal income tax to deal with. You would not be required to collect Florida sales tax on sales made and shipped to other states where your company does not maintain a physical presence as davew mentioned above.

 

[FlyingRon]

Sorry Wino, his migratory sales in most states WILL create situs and liability to collect sales tax EVEN if his residence/LLC is in some other state.
Believe me, our local tax people patrol flea markets and craft festivals making sure that the transients collect the tax.

 

[BigMouthWino]

Sorry Wino, his migratory sales in most states WILL create situs and liability to collect sales tax EVEN if his residence/LLC is in some other state.
Believe me, our local tax people patrol flea markets and craft festivals making sure that the transients collect the tax.

Perhaps you missed the part where I said:

You would not be required to collect Florida sales tax on sales made and shipped to other states where your company does not maintain a physical presence as davew mentioned above.

If he is in the state because of his transitory nature that would pretty much qualify as having a physical presence there. Try reading the whole post next time.

 

[FlyingRon]

Perhaps you missed the part where I said:

You would not be required to collect Florida sales tax on sales made and shipped to other states where your company does not maintain a physical presence as davew mentioned above.

If he is in the state because of his transitory nature that would pretty much qualify as having a physical presence there. Try reading the whole post next time.

I did read the full post, and your rebuttal is still wrong, neither "maintain" nor "physical presence" is required for situs.