Legal Question in Business Law in California
Should I create a LLC in California or Delaware? I'm starting a social network website and I live in California. I see that California fees are much higher than Delaware so I was thinking of creating the LLC there to lower costs. Would California consider me to have 'minimum contacts' in the state thus defeating my purpose of lowering costs and having to end up registering anyway?
My business is a social network website. No employees other than myself.
Thank you for your help.
2 Answers from Attorneys
You pretty much answered your own question. If you are a california business and incorporate in Delaware, you still have to register with California and pay in state taxes.
Mr. Jefferson is exactly right. You have to pay fees and taxes on your California operations in California regardless of where you form the LLC. Forming an out of state business entity to operate in California almost invariably INCREASES expenses, and always creates two sets of annual filings and requires compliance with two sets of business laws.
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