Hacker News Reader

Comment by biztos | Hacker News Reader

IANAL but I was looking into starting a US consulting company recently, and one of the tricky things is you have to "foreign-qualify" (IIRC) your Delaware/Nevada LLC in California if you are going to do any business there, which for a tech consultancy is quite likely. Then your tax situation suddenly becomes complex and (relatively) expensive, in case that is related to your interest in Delaware or especially Nevada.

Now, whether you can get around this by being fully remote and effectively saying "no, CaliCorp came to Nevada to do business with me, not the other way around" -- that's an interesting question.

View on HN

Hey biztos, arjun here from doola, you're 100% correct here. A common mistake people make is form an LLC in a state that they don't live in. They then have to "foreign qualify" in the state they "do business in" = the state they live in. The definition of "do business in" is essentially you have a physical presence there = you live and work there, have a physical office there, W2 employees etc.

The best advice to "what state should I form my LLC in?" is: - IF you live in the US: form in the state you live in (to avoid the foreign qualification in another state). - IF you don't live in the US: you can choose any state. The most popular states we see at doola are Delaware and Wyoming but Wyoming is the most popular due to the lower ongoing annual fees ($50 to WY vs $300 to DE) and Wyoming has demonstrated it's willingness to innovate when it comes to regulation (like the DAO LLC legislation passed on 7/1/21.)

For more on DAOs check out this blog post: https://www.doola.com/blog/what-is-a-dao-llc-your-complete-g...)

And for a complete answer to "Best state to form an LLC in" check out this blog post: https://www.doola.com/blog/what-is-the-best-state-to-form-my...

It's 100% normal for cali companies to contract non-cali companies. Especially DE/NV corps.

As long as your corporate residency is in check, you file annual reports and pay taxes you are 100% in the clear.

Yup, we at doola have a Delaware C Corp but because we "do business" in NYC (physical office, HQ is there, employees there) we have to do the "foreign LLC filing" to stay compliant and in the clear.

Reply on news.ycombinator.com