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Roger, Attorney
Category: Business Law
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Legality of setting a Nevada/Delaware corporation

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Legality of setting a Nevada/Delaware corporation

Hi, I'm curious about the legality of setting up a Nevada or Delaware corporation in Washington state.

I'm located in WA. The business I'm setting up is virtual, and only does business online. It(or I?) would be renting one physical location in WA to host servers.  It does not ship out anything or have a storefront.

The business isn't legally set up yet. I've discovered that there are numerous benefits to my business being a Nevada or Delaware corporation.


What are the legal implications of setting it up as a Nevada/Delaware LLC in this situation?


What are the (state) tax implications for WA?

Kirk Adams :

Hi - my name is XXXXX XXXXX I'm a Business litigation attorney. Thanks for using JA! I'll be glad to help.

Kirk Adams :

There's nothing wrong or improper about forming an LLC in one state and having it headquartered in another. It actually is fairly common.

Kirk Adams :

The only real issue would be that you'd have to register in Washington State as a foreign entity, which requires additional fees to be assessed to the business by the Secretary of State.

Kirk Adams :

If all income is made in Washington State, then all tax returns, income taxes, sales tax, etc. should only be assessed through that state - - and not the state of incorporation.

Kirk Adams :

You would also have to have a registered agent for process in the state of incorporation, which could be a corporation set up to do such a thing. These types of companies exist in every state and serve as the registered agent for service of process for the company that is headquartered elsewhere.


> If all income is made in Washington State,

This depends on how you define 'income is made', I think. Is there a legal definition for that concept that I could review that would apply in WA?

The income isn't technically made anywhere, depending on how THAT is defined. The 'income' is either in Bitcoins, which have no real value legally(nor do they exist), or it is in dollars when those are sold(Exclusively in other states or even countries, then transferred in).

I'm guessing since the exchange of Bitcoins to dollars happens elsewhere, and the Bitcoins don't exist anywhere, then it is reasonable to call that out of state?

(Very difficult legal question, I know).

Kirk Adams : If the income is received in Washington State and paid out there, it would likely be considered income earned there. However, I would certainly defer to a CPA on something like that. '
Kirk Adams : However, there's no problem with having an LLC incorporated in one state and being headquartered in another.
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