The Best States for LLCs
Selecting a state to form your LLC seems easy, but there are a few states that stand out above the rest. Before we look at the pros and cons of individual states, let's look at the first big decision you need to make. Should you form your LLC in (1) your home state or (2) one of the business friendly states? If you decide not to form your LLC in your home state, what are the best states for LLC formation?
The Top States for LLCs
The most popular states for LLCs include:
- Delaware - Delaware is probably the most popular choice when forming an LLC outside of your home state. Delaware is one of the most business-friendly jurisdictions in the country and does not tax out-of-state income. Business disputes are handled in a specific court and resolved faster in Delaware than they might be in other states.
- Texas - Texas has a pro business environment. There are no annual filing fees and no franchise or privilege taxes unless the LLC makes more than $1.18MM in revenue in a given year.
- Nevada - Nevada doesn't tax business income, capital gains, or inheritance. In addition, it has no franchise taxes (although it does have nominal business license and annual fees). Nevada doesn't require much disclosure in the public documents, allowing Nevada LLC owners to remain anonymous in public filings. Lastly, Nevada does not share information with the IRS
- Wyoming - Similar to Nevada, Wyoming does not have business income or franchise taxes. It also provides a high level of privacy for LLC owners.
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