Forming an LLC

Hi,

I and my partner are thinking of forming an LLC. We live in different states: Massachusetts and Rhode Island. Does it matter which state (either of the two or perhaps another state entirely, like Nevada or Wyoming, those being tax-friendly and not requiring residence) we register as an LLC? Do we also have to file in either of our two states for a "foreign registration?"

Leo

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Permalink Reply by Victoria Ring on February 1, 2010 at 5:43pm

Leo --

I am a paralegal who has worked with attorneys who formed LLCs. My suggestion is to go to Google and type in the search words: "How to form a LLC in Massachusetts" AVOID all the rip-off companies who want to charge you upwards of $300 or so to help you. Go directly to the state website (normally the Secretary of State) and read the requirements for yourself. Every state is different; but normally, the state where the business is formed is the state where the LLC is filed. For example, I filed an LLC in Ohio, but when I moved to Colorado I filed another LLC. The cost is very minimal; some states are as low as $25. So don't get ripped off. I hope this helps.

Here is the direct link to the Massachusetts Secretary of State:
http://www.sec.state.ma.us/cor/corpweb/corllc/llcinf.htm

Victoria Ring
Graphico Publishing

Permalink Reply by Leonid Korogodski on February 2, 2010 at 10:00am

Thanks! The fee for Massachusetts is $500, though. And $155 for Rhode Island. That's why I am asking. Does it matter which state the LLC is registered in, if the members live in different states?

Leo Korogodski
Silverberry Press

Permalink Reply by Ron Lawrence on January 21, 2011 at 5:28pm

Wow! $500 to register an LLC in Massachusetts? I was just checking out the filing fees page:

http://www.sec.state.ma.us/sec/cor/corfees.htm#dompro

That's high. It's been a while since I dealt with any of this stuff, but there used to be an open secret that Deleware was the state to register a corporation. Apparently, they are particularly friendly.

FWIW, I owned a corporation at one time, but found it onerous to keep up with the requirements (e.g. annual meeting minutes, annual report, not to mention the numerous tax returns). The advice I was getting said that if I didn't keep up with those requirements, and a law suit was brought to bear, it's a fairly simple matter to "pierce the corporate veil" and the principles are held liable anyway. That pretty much negates the benefit of incorporating.

If you are worried about $500 for the registration, I'm not sure that incorporating is necessarily the way to go. If it's not about the money, then I would recommend talking with a good business lawyer.

Permalink Reply by Brad Poulson on July 26, 2011 at 12:00pm

This is a great discussion and it pertains to SPAN’s continuing work on Publishing Best Practices, so I’ve linked it to the following discussion: Fundamental Business Best Practices (Business Structure, Copyright,...

Thanks to all the participants, and I encourage your on-going involvement in any of the PIP Best Practices Threads.