Complex question, so please bare with me while I give the scenario: I am an active duty Army Officer and I want to form an business in the structure of an LLC. My business is a commercial Haunted House. I currently live in Virginia, but since I am in the Army I have and will continue to move every 2-3 years. For 2012 & 2013 my Haunted House will be either in Virginia or Washington DC. I have read that there are advantages to forming an LLC based in either Nevada or in Wyoming, but I do not have a physical address there and would require a registered agent (I believe). My questions are:1-Can I form an LLC in either Nevada or Wyoming and still do business in Virginia or DC or wherever the Army assigns me in 2 years when I will move again?2-Would there be any advantage to doing the above?3-Or do I have to form an LLC here in Virginia for now, and then form another LLC in whatever state I get stationed in next, etc... I would prefer to form one LLC now and have it be applicable for wherever I am living and want to do business. If Nevada or Wyoming have certain advantages when it comes to forming an LLC, all else being equal, it would seem to make sense to form the LLC in one of those two states. 4-How does an LLC that is formed in, e.g. Nevada, do business in multiple states (or have the potential to do business in multiple states) such as are my needs. I will never have to do business in more than one state at a time, but my Haunted House will be in different states as long as I keep moving due to my military service. I thank you for your time.Jon Libbesmeier
Country relating to Question: United States
Research via the internet only.
Hi Jon. Thanks for asking your question. My name is XXXXX XXXXX X will be assisting you. For most small companies, it makes sense to simply file the LLC in the state where you will reside and conduct your business. In fact, if your form a "foreign" LLC - an LLC outside the state where you conduct your business - your local state will almost always require you to register the LLC locally. Thus, even if you filed in Nevada, Virginia would require you to register your LLC to do business in Virginia, which is usually just an added level of paperwork. However, if you start in Virginia and form your LLC in Virginia, you can always leave it there when you move, so long as you register to do business in each state you move to. Or, there are also ways to convert the LLC to the jurisdiction of the new state when you move. To summarize, it usually makes the most sense to start local and then register later in each additional state where you end up conducting business.
Now, to address your original question of the advantages to forming in Nevada or Wyoming. Wyoming, for example, offers certain tax advantages to certain companies, which may or may not affect you. Wyoming also has lower annual filing rates (although the savings are minimal). Corporate formalities are minimal. Also. officers and directors may have better protection from debts of the corporation.
Anyway, while there may be some advantages to filing in a more friendly out of state jurisdiction, keep in mind that your company will still have to register locally and be governed as well by local law. Here is a very good article summarizing the differences between Wyoming and Nevada: http://www.corporateservicecenter.com/nevada-inc-whitepapers_files/wyoming_v_nevada.php
Unless any of these issues make a huge difference to your company, it would most likely make sense to keep things simple and start with an LLC in Virginia, which you can keep in Virginia and simply file for foreign corporation status in each state you end up in.
Please feel free to post follow up questions or comments if I can assist you further.
Thanks very much for your follow up. One of the formation companies on the Internet is probably not a bad thing. They charge you for the actual filing fees and costs and a fee on top of that to do the work. You may even take a stab at considering doing it yourself, if you are so inclined. An attorney is good to have available if you end up needing additional help in the future, such as drafting contracts for the business or taking in shareholders or investors. However, the Internet formation companies or even you yourself, can probably get you started just fine.
Here is the website if you want to take a look at the forms and requirements:
One last question: At present I am forming the LLC and I am the only person involved. In the future, there are a couple of specific people (already identified--my brother and my wife) who will probably be involved in the business. As I am forming the LLC now, should their names be included as Officers or members of the LLC so I can avoid having to make any changes (legally) in the future, or can you add individuals to an LLC at any time without having to make any changes (legally speaking) or having to file additional paperwork in the future when I may add someone? I am thinking it might be an advantage to add my brother, for example, because he already has a different business and and accountant. He could potentially consult that same accountant on business matters for my business and roll it up under his existing relationship rather than me going out and finding my own new accountant. Given what you know, would it probably be better to add my brother as a "member of the board" as I form it now to avoid having to do any new work / paperwork down the line? Thanks again!
I would add members when they actually become members. Traditionally, you will do that through an operating agreement - which you maintain on your own - so it is not a difficult thing to do. Nor would it require filings with the state. Thus, you start out with your simple one-member operating agreement (or no operating agreement) and then amend it later to add new members, such as your family. The nice thing about using Legal zoom or some other Internet companies is that they will most likely include a standard operating agreement for you in your startup fee, although the agreement is more important as such time as you add members to the LLC.
Corporate, Real Estate, Estate Planning, Probate and General Litigation attorney 14+ years
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).