When starting a new ecommerce business, one of the first legal steps is forming a limited liability company (LLC). But entrepreneurs face an important question — which state should I form my LLC in? There are several key factors to consider when making this decision.
The easiest option is to form your LLC in your home state where you live and operate your business. This creates a "domestic" LLC that is governed by and registered in that state. Your home state is ideal because:
Forming your LLC in a state other than your home state creates a "foreign" LLC. This requires registering in both your home state and the foreign state, meaning:
Online businesses without a clear physical location have more flexibility. In this case, form your LLC in the state where you have the strongest residency ties such as:
Non-US citizens can form a US LLC in any state, with Delaware, Wyoming and Nevada popular options. These states offer benefits like privacy protection and low fees.
In summary, forming a domestic LLC in your home state is simplest for most startups. But online and real estate businesses should weigh factors like physical presence and property location. Consult advisors to determine the optimal LLC state for your situation.
If you’re ready to start an LLC for your ecommerce business, PeachPay Ignite helps you file the paperwork and maintain compliance in a few easy steps.
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