Best State to Form an LLC

The Delaware, Wyoming, and Nevada myth

You may have read that an LLC formed in Delaware, Wyoming, or Nevada lowers your taxes or keeps your name private. It’s a reasonable thing to want, and those states do have real features. The catch is where the business runs.

If you live and operate in one of those three states, forming there is just forming at home. If the work happens somewhere else, your home state treats the LLC as a foreign LLC doing business there and expects a second filing, called foreign qualification. From then on you pay two states: two filings, two annual reports or franchise taxes, and a registered agent in each one. Registered agent service, when you order it here, is $74.25 a year per state, through Registered Agents Inc, not through Vermilion Vitez. For most owners who operate at home, the second state brings no privacy or tax benefit.

• $2,110Delaware, five years, filing fee included. The filing fee is $110. The annual item is an LLC tax of $400, due June 1, and there is no annual report for LLCs.
• $403Wyoming, five years, filing fee included. The filing fee is $103. The annual report is $60 minimum, a license tax based on in-state assets.
• $1,836Nevada, five years, filing fee included. The $436 filing fee covers the first annual list and business license; after that it is $350 a year ($150 list, $200 license). Home-state registration is extra.

Each state’s own site does list some real differences. Delaware’s LLC formation form does not list members or managers, and Delaware has a dedicated business court, the Court of Chancery. Wyoming’s articles of organization do not list members or managers, and Wyoming has no individual or corporate income tax. Nevada’s formation filing does list members or managers (NRS Chapter 86), and Nevada does not tax individual income. Texas has a business court too, and its formation filing does list members or managers. Illinois states standard processing of 10 business days. None of these cancels the home-state foreign qualification, or the home state’s tax, when you live and operate at home.

California shows how this plays out in dollars. An LLC that does business in California owes the Franchise Tax Board’s $800 annual LLC tax even at $0 income. That includes an LLC formed in another state, and one whose only California activity is owning and renting out real property. The first payment is due four months after formation or foreign registration, and a calendar-year LLC then pays on April 15. LLCs formed in 2024 or later owe the $800 in year one. Our annual schedule also lists a $20 Statement of Information every two years, separate from the $800. California’s filing fee on the schedule we use is only $70, so the annual line is the one to plan around.

If a venture investor has already named a formation state in writing, price both filings before you agree. A round you only hope to raise is not a reason to file twice.

Filing fees and five-year totals are from the state schedule behind the table (fees traced to the formation schedule and annual-fee notes). The $800 figure is also in the California LLC tax record, which cites the Franchise Tax Board. Privacy, a business court, and standard processing time appear only where that state’s own site states them.

How to decide in five minutes

1. Write down the state where you live and the state where the work happens. If they’re the same, price that state first.
2. Add any other state where you’ll own property or have employees. Each of those needs a registration no matter where the articles are filed.
3. If a venture round is only a hope, don’t form for an investor you don’t have yet. If a round is actually planned, ask the investor which state the documents require, then price your home state next to it.
4. Check what your home state’s formation form publishes, including whether member names are on it. The table on this page shows privacy, a business court, and standard processing time only where the state’s own site states them.
5. Run your state through the calculator to compare five-year totals: your home state alone, or Delaware, Wyoming, or Nevada plus a foreign registration at home with two registered agents.

This page compares published state fees. It’s general guidance, not legal or tax advice, and no formation state guarantees a privacy or tax result. If investors, property in several states, or employees elsewhere are part of the plan, talk to a licensed attorney or CPA before you file.