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Delaware LLC but operating in Illinois(?)

Discussion in 'Legal Issues' started by alistair80, Mar 31, 2009.

  1. #1
    I am Illinois resident. In Illinois setting up a LLC is VERY expensive which is why I have been thinking if it'd be a good idea to set up the LLC(marketing & advertising company) in DE and apply for a Certificate of Authority in Illinois. Am I overlooking any tax/hidden issues? I will be the sole proprietor of the LLC for now! The entire business will be conducted in and around Chicago, at least for the time being.
    Any feedback greatly appreciated!
    SEMrush
     
    alistair80, Mar 31, 2009 IP
    SEMrush
  2. Pixelrage

    Pixelrage Peon

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    #2
    You would then have to "foreign qualify" your business, and you should do research on Delaware taxation. From what I remember when I was thinking about starting my LLC in delaware, that state only has beneficial tax laws for corporations - not LLCs. I read a few articles about it and decided to form my LLC in my state instead.

    Keep in mind that you'd have to conform to the taxation laws of both IL & DE if you did this.
     
    Pixelrage, Mar 31, 2009 IP
  3. mjewel

    mjewel Prominent Member

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    #3
    An LLC would give you liability protection, but if you are a single-member LLC there is going to be no tax benefits as you will be taxed a sole-proprietor. If you register in Delaware, you still going to be required to file in Illinois and pay the annual renewal fee of $250 (same as if you registered in Illinois). You should really consult with a CPA and discuss the additional fees you are going to incur and if it makes sense for your situation.
     
    mjewel, Apr 1, 2009 IP
  4. harmonSmith

    harmonSmith Guest

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    #4
    Not really. Incorporating in a state other than the one where you live and work will generally involve additional costs. You must have registered office / registered agent in the state in which you incorporate. Unless you have a person (over 18) in the state of incorporation who will agree to be your registered agent, it’ll cost about $125-$200 per year to have a registered agent.

    Further, the state in which you live and actually operate your business may require that you file as a foreign corporation if you incorporate in another state (technically, your business is registered in a different state). This can cost between $50-$200 (depending on the state).

    For the home and small business person there is not compelling reason to incorporate in Nevada or Delaware, despite what you have heard. You nor your assets are any more protected by being in one of these state than you would be in your own state.clickandinc.com/
     
    harmonSmith, Jun 17, 2009 IP