Hi all,
My situation is this:
* I have several websites that are starting to generate revenue via subscription models.
* I would like to form an LLC to shelter myself from legal liability. Doubt VCs would be interested, so no C-Corp.
* I need to choose a state to incorporate it.
* I'd love to incorporate in my 'home state,' but I don't really have one. I usually move every year or so.
My objectives are:
* Simplify the process as much as possible. I hate filing forms and dealing with legal hassles.
* Pay as little income tax as legally possible.
So my questions are:
* Do you have any advice on where to incorporate?
* Given the virtual nature of my business, in what states would I be considered to have a "nexus," and thus have to file taxes? (Paid) subscribers will be from every state.
* Do any of you have thoughts or anecdotes on the Vermont Virtual Corporation?
* Do you have any recommendations on books I can read to give myself a better background?
Thank you!
Going against that suggestion, my next suggestion is don't register in California, as you'll pay the $900 LLC tax each year just to exist. The $900 varies based on how much the corporation earns each year, but that's the minimum.
That said, you don't have to live in the state where you incorporate, but it does make things easier, as you have to have some place with a physical, non-P.O.Box-like address to send corporate documentation to. If you are not located in the state of incorporation, you'll need to have a registered agent. This agent will receive your corporation documents and forward to them for you. Most agents charge about $200 for the service -/+.
Since you move frequently, having a registered agent will probably work just fine for you, as your corporate mailing address wouldn't change unless you change agents.
You file taxes in the corporation's state, then apply the profits to your own taxes, as a pass-through. Note that, if you set up the corporation with pass-through taxes, you'll pay taxes on the corporation's profits, even if you don't pay yourself the money (as in, if you end up with $20k in a savings account at the end of the year, you'll pay taxes on that $20k, even if you aren't paid the $20k).
Hire an accountant, too. And a bookkeeper who can show you the books at any point (say, using a site like http://netbooks.com/ ).
I've used http://mycorporation.com/ a couples times in the past for incorporations, one S corp, one LLC. They've since been bought out by intuit.com, so I don't know how they are now, but I was good with the service I received.