Choosing a State
Choosing a State for Your LLC/Corp: Privacy, Fees & Compliance Fit
Most companies should form in their home state. Exceptions exist for specific strategies (e.g., venture capital, holding companies, or privacy). This guide helps you weigh privacy, fees, and compliance fit—without confusing marketing with law.
Default Rule
- If you’ll do business primarily in one state (customers, employees, office), form there.
- Forming elsewhere typically means you’ll still need to register as a foreign entity at home—doubling fees & filings.
When to Consider Another State
- Raising institutional/VC funding (often favors Delaware C-corps).
- Privacy-forward holding companies (WY/NM-style LLC strategies).
- Complex multi-state operations that benefit from a unified, well-tested corporate law forum.
Three Levers
- Privacy: What is public on your formation/annual filings?
- Fees: Formation + annual report/franchise tax + RA cost.
- Compliance Fit: Reports, publication, licensing, and how you’ll actually operate.
Privacy (Public Record)
- What names/addresses appear on formation and annual filings?
- Can you list a Registered Agent address vs. a member/manager address?
- Note: Most companies must file Beneficial Ownership info with FinCEN (CTA). This is federal and not public, but it exists separately from state privacy.
Fees (Total Cost of Ownership)
- Initial filing + any publication/initial list fees.
- Annual/periodic report and any minimum/franchise tax.
- One RA per state where you’re registered.
Compliance Fit (Friction)
- Annual report cadence/complexity; late penalties.
- Local/state business license regimes.
- Foreign qualification needs; nexus (sales tax, payroll).
- Courts & predictability if disputes arise.
Popular State Archetypes (High-Level)
General tendencies only—always verify details before filing. Numbers vary and change; we deliberately avoid quoting fee amounts.
| Archetype | Why People Choose It | Privacy Tendencies | Compliance Fit | Good For | Caution |
|---|---|---|---|---|---|
| Home State | Simplest—aligns with where you actually operate. | Varies; many list managers/officers publicly. | Single set of fees/filings. Local licensing integrated. | Most local/online businesses | Avoid double registration (foreign + home) unless strategic. |
| Delaware | Highly developed corporate law; investor familiarity. | Officers/directors may be less exposed on filings. | Predictable courts; popular for C-corps/VC. | Venture-backed, multi-state, scale-minded companies | Foreign qualification still needed in your operating state. |
| Wyoming | LLC-friendly, privacy-forward reputation. | Member/manager details often more private on public record. | Streamlined; predictable ongoing obligations. | Holding companies; asset segregation | Still foreign-qualify where you actually operate. |
| New Mexico | Lean ongoing obligations for LLCs; privacy-minded reputation. | Limited public disclosure for LLC members/managers. | Simple recurring duties for many LLCs. | Simple holding structures; low-maintenance LLCs | Check banks/vendors for address/KYB expectations. |
| Nevada | No state corporate income tax; pro-business branding. | Privacy-oriented, but filings have their own requirements. | Distinct annual requirements (e.g., officer/manager lists). | Certain holding/ops strategies | Marketing claims ≠ legal reality; still handle home-state nexus. |
| Florida | Fast processing; straightforward compliance. | Managers/officers usually visible on public portal. | Clear annual routine; broad familiarity. | Service firms; e-com with FL presence | Public transparency may reduce “privacy.” |
| Texas | Large market; no personal income tax; robust economy. | Manager/officer info typically public. | Annual requirements; franchise-tax framework. | Companies with real TX footprint | Foreign-qualify elsewhere as needed. |
🧭 Decision Wizard
Slide your priorities. We’ll suggest a starting point to research (not legal advice).
Suggested Starting Point
If you primarily operate in one state, forming there minimizes double filings.
Why This Pick?
- Strong weight on operating in one state.
- Moderate emphasis on privacy/fees/compliance.
✅ Compliance Fit Checklist (Copy/Paste)
💵 Light Cost Planner (Year 1)
Scenario A — Local Services LLC
- Pick: Home State.
- Why: You’ll need local licensing and likely public listings anyway; foreign qualification elsewhere adds cost without benefit.
- Do: RA in home state; virtual mailbox for public address; compliance calendar.
Scenario B — VC-Bound Tech
- Pick: Delaware C-Corp is the common play.
- Why: Investor familiarity and predictable corporate law.
- Do: Foreign-qualify in your operating state; RA in both states; ensure stock plan & board consents line up.
Scenario C — Holding Company
- Pick: Privacy-forward LLC state (often WY/NM-style).
- Why: Lean ongoing duties; member privacy on public record.
- Do: Keep clean separation, bank properly, document inter-company agreements.
Scenario D — Multi-State E-commerce
- Pick: Usually home state (principal ops) + register elsewhere as needed.
- Why: Sales-tax & shipping nexus drive registrations over time.
- Do: Track economic nexus thresholds; coordinate with a tax pro.
FAQ
Is there a “best state” for everyone?
No. For most small businesses, the home state is best. Alternatives solve specific goals (VC, privacy, holding structures).
Does choosing WY/NM/DE avoid my home state’s rules?
No. If you do business in your home state, you usually must foreign-qualify there and follow local licensing and taxes.
Will a privacy-forward state keep my name off everything?
State filings can be more private, but banks, payment processors, and the federal FinCEN beneficial ownership report collect identity details.
What about newspaper publication requirements?
Some states have extra steps for certain entities (e.g., newspaper publication). If that’s a concern, verify current rules before filing.
Is this legal/tax advice?
No—informational only. For your specific situation, consult an attorney or tax professional.
Want a tailored state recommendation?
Ameen Systems can map your privacy/fee/compliance priorities and build a filing plan (including foreign qualifications and RA setup).