How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Law Educator, Esq. Your Own Question
Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Business Law
Satisfied Customers: 110577
Experience:  All corporate law, including non-profits and charitable fraternal organizations.
Type Your Business Law Question Here...
Law Educator, Esq. is online now
A new question is answered every 9 seconds

Is there any benefit to incorporating (as an LLC) a service

This answer was rated:

Is there any benefit to incorporating (as an LLC) a service business in Wyoming, if we will be doing business in Florida and Texas?
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

It all depends on what type of business you are conducting as to whether or not you would gain an advantage to the NV or WY LLC. What type of service? Is it physical service that is conducted physically in FL and Texas?
Customer: replied 3 years ago.

It would be a roofing business, so yes, the business would physically take place in those states. I've read different kinds of things, some stating that you will be paying fees to register within those states anyway, so just bypass WY and register in one of those states and that if you did encounter any lawsuits that it would be the judges decision on which state's laws would be enforced. One aspect, however, that looked particularly interesting in our situation was that (supposedly) no matter what percentage of shares a person owns, that you can distribute profits in whatever percentages the company would like. We do have alot to consider, so your input is valued, but also what professionals would be the best to speak with in this situation? A tax attorney, a cpa, or some other expert? Thanks!

Thank you for your response.

In this type of business, forming a WY or NV LLC is not very helpful because in addition to the WY or NV LLC you would have to then register as a foreign LLC doing business in both Texas and FL and incur additional fees. You also do not really save on taxes because you have to pay any applicable tax in both FL and TX for work done there and as FL or TX has no personal income tax you are not saving there either. It is best to register in FL or TX and then register as a foreign LLC doing business in the other state.

In both Texas and FL, with a written operating/membership agreement for the LLC, you can still distribute profits in whatever percentages stated in that membership agreement. This is not just something unique to WY or NV. Thus, if you would form your LLC in Texas, for example, with your foreign LLC registration in FL, you would have a written membership agreement designating among other things percentage of membership and distribution of profits or distribution of losses and even pay for work done.

The CPA can advise you best on the taxes paid. However, be cautious. Many CPAs will say it is best to take profits from the LLC and not take pay as a salary, but what happens in that case is that if you have a period where there is no business and you are not an employee of the business taking a salary or wage and paying unemployment taxes on the members who are working for the LLC you would not be able to collect unemployment benefits. It is a trade off and while you might save some in taxes by taking only profits from the business as a member (like gains from shares), you would lose the ability to collect unemployment in event of an unforeseen circumstance if business drops off and you have no work (owners of an LLC can collect unemployment contrary to belief of some, as long as they can prove there is no work through no fault of their own and have sought work to no avail).

Thank you so much for using I truly aim to please you as a customer, but please keep in mind that I do not know what you already know or don't know, or with what you need help, unless you tell me. If I did not answer the question you thought you were asking, please respond with the specific question you wanted answered. PLEASE use REPLY to EXPERT if you would like more information or if you feel something was not included in your answer.

Kindly remember the ONLY WAY experts receive any credit at all for spending time with customers is if you click on OK, GOOD or EXCELLENT SERVICE even though you have made a deposit or are a subscription customer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT, if not the site keeps your money on deposit.

Also remember, sometimes the law does not support what we want it to support, but that is not the fault of the person answering the question, so please be courteous.

Law Educator, Esq. and 4 other Business Law Specialists are ready to help you

Related Business Law Questions