Can You Have a Wyoming LLC If You Live In California?

Summary

In this video, we explore whether you can form an LLC in a state different from where you live, addressing common questions and nuances. The discussion explains how a single-member LLC can be registered in a state like Wyoming, but highlights key considerations, such as the need for a registered agent, changes to bank account addresses, and the impact of having employees. Special attention is given to California’s unique requirements, where the state mandates registration and tax payments even for out-of-state LLCs. The video provides practical advice on navigating LLC formation for freelancers and small business owners.

Takeaways

• 😀 You can form an LLC in a state different from where you live, but certain conditions apply depending on the nature of your business.
• 😀 If you have a single-member LLC and no employees, you can register it in any state, regardless of where you live (except California).
• 😀 If you elect S-corp status for tax purposes, you must register your LLC in the state where you live to get a state tax ID number.
• 😀 Having employees in multiple states requires you to register your LLC in each state where your employees live or work, for payroll tax purposes.
• 😀 Freelancers or single-member LLCs without employees can register in any state, even if they don’t live in the US, as long as they’re not in California.
• 😀 California has specific requirements, making it more complicated to form an LLC there or do business there, especially for state taxes.
• 😀 California will require you to register your LLC if you are a resident and you report income from the LLC on your tax return, even if it’s registered elsewhere.
• 😀 If you live in California, you may have to pay the state's Franchise Tax and other fees even if your LLC is registered in another state like Wyoming.
• 😀 Using a registered agent in another state (like Wyoming) for privacy reasons can be beneficial, but California may still force you to register your LLC within the state.
• 😀 1099 contractors don’t require you to register in multiple states where they live or work. Only W2 employees create the need for multi-state registration for payroll tax purposes.

Q & A

Can I form an LLC in a state different from where I live?

Yes, in most cases, you can form an LLC in any state, even if you live in a different state. However, there are exceptions depending on factors like whether you have employees or operate in other states.

What is the general rule for forming a single-member LLC in a state different from where I live?

You can form a single-member LLC in any state, provided that you don't have employees or nexus in the state where you reside. However, if you have employees or conduct business in other states, you will likely need to register your LLC in those states as well.

Do I need to register my LLC in multiple states if I have employees in different states?

Yes, if you have employees in multiple states, you will need to register your LLC in those states to handle payroll tax and other state-specific compliance requirements.

What happens if I have 1099 contractors instead of employees?

If you only have 1099 contractors, you do not need to register your LLC in every state where your contractors are located. Registration is only required for states where you have employees and are withholding payroll taxes.

Why is California different when it comes to forming an LLC?

California has unique rules for LLCs. Even if you form your LLC in another state, like Wyoming, if you earn income in California, the state will require you to register your LLC, pay franchise taxes, and comply with state tax regulations.

Can I form an LLC in Wyoming even though I live in California?

Yes, you can form an LLC in Wyoming even if you live in California. However, California will still require you to register and pay franchise taxes if you are earning income in the state.

What is the role of a registered agent for an LLC formed in a different state?

A registered agent is required for an LLC formed in a state where you do not reside. The agent serves as a point of contact for legal and official documents in the state where the LLC is registered.

Do I need a virtual address if my LLC is formed in a different state?

Yes, if you form your LLC in a state like Wyoming, you may need a virtual address for business purposes, such as receiving mail or setting up a bank account.

What is the advantage of forming an LLC in Wyoming?

One advantage of forming an LLC in Wyoming is privacy. In Wyoming, the LLC owner's name may not appear in public records, which can be beneficial for those seeking more privacy in their business dealings.

Is there a scenario where forming an LLC in another state, like Wyoming, would be beneficial?

Yes, forming an LLC in Wyoming may be beneficial if you want privacy and do not have employees in California or another state that has specific LLC registration and tax requirements. However, you must still register to do business in California if you earn income there.