If you’re starting a business in U.S. – it’s very important to know what state should you choose.
Is it the one you’re living or planning to live in? Or should you choose the one with the lowest taxes? These and much more we will review in this article.
You might also think that forming an LLC might be difficult and you’re almost right. Fortunately, there are professional services that can form and LLC for you. For example, one of the most-used ones is IncFile and you probably heard about them. They can start an LLC and do all the hard work for you for a very attractive price. In case you want to know if it’s worth it using them and how much will it cost – take a look at their review on llcguys.com: https://llcguys.com/reviews/incfile-review/.
So let’s not waste any more time and dive in to the best US states for your LLC.
By the way, it’s worth to mention, that it’s not a “ranked” guide. Meaning 1st place doesn’t mean the state is the best. All of them have some pros and cons of their own.
1. Florida
Florida is a perfect state for new businesses. To start off – taxes there are great – they’re one of the lowest in U.S. Plus, there is no personal income tax. That’s why you see quite a lot of people from West coast moving to Florida.
To start an LLC in Florida will cost you only $125 for filing fees making it a really attractive deal.
2. Texas
Texas seems to be a new “Mecca” for business startups, especially the city of Austin.
Taxes there are pretty attractive and the state’s economy is actually booming so it’s definitely a good choice to start an LLC there. Forming a Texas LLC will cost you $300 to file and $0 (yes, $0) of annual fees. The incorporation process is also pretty slick and simple.
3. Utah
This state has a 0% corporate tax rate and a 0% individual income tax rate. It is advantageous for people who want to start a Limited Liability Company because the responsibility of every business is to pay tax. With 0%, business owners can see it as an opportunity to save more money. Furthermore, the filing fee for an LLC in Utah is $70, with an annual payment of $20.
A Utah LLC offers easy maintenance without the need for required meetings, minutes, or the need to establish a board of directors.
4. Colorado
The state of Colorado can definitely boast its strong cannabis industry. So if you’re planning to start a CBD business or etc. – Colorado LLC is the way to go.
Now talking about LLC fees – Colorado is a superb state in that regard. Its filing fees are only $50 and yearly LLC maintenance fees are just a mere $10. So if you’re on a budget – Colorado might be your favorite state for your startup.
5. California
Cali isn’t one the cheapest states, but it’s definitely one the most popular ones. It’s no secret that California is the wealthiest state in US, so it tends to attract a lot of new businesses. The LLC set up costs are $75 and annual fee is a grandiose $800 in California.
So if you’re planning to start an LLC in California – don’t forget that it’s full of opportunities, but it’s annual maintenance costs are relatively high as well.
In addition, here’s a quick video explaining how you can form an LLC in California on your own:
6. Delaware
For a start, Delaware has some of the most business-friendly laws in the country. These laws are also regularly updated, meaning that they are always up to date and the state is at the forefront of business law developments.
Delaware state offers some big tax advantages for out of state businesses that are organized as Delaware LLCs. There is no income tax if the LLC does not do business in Delaware, there is also no sales tax if the LLC does not do business in the state and there is also no tax on intangible income.
It is one of the minority locations in the US where you can remain relatively private.
Conclusion
Limited Liability Company is a way to go for most businesses. It will protect your personal assets and liability and give you great tax benefits compared to other biz forms.
However, if you don’t know how to set up an LLC yourself, it is highly advisable to use an LLC formation service. Here you can see a list of best LLC services.
Hopefully, this guide helped you to move closer to a smarter choice!
