Californians - How are you running LLCs / S-Corps? Out of State?

Berto

Berto

Movin to TX
Jan 3, 2009
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I know there's a ton of CA residents here, and I should consult a lawyer, but I'm wondering what you CA folk do with your LLCs and S-Corps.

Are you paying the $800/year franchise tax, or do you incorporate elsewhere like Nevada or Delaware?

I'm fine paying the state income tax, but I'm sick of paying $800/year.

If you have your LLC elsewhere, what about an address for creating bank accounts? Or affiliate payments that go by check? Or does this force you to become purely electronic?

I'm currently looking at Delaware Corporations : Company Formation : Incorporation : Resident Agent : Incorporating : Why Incorporate in Delaware : The Delaware Company and thinking I should do this for a new project, but not sure how the banking thing goes or if CA will hunt me down. Anyone check on the legality of this?

Here's some foreign bolt-ons for your troubles:
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Thanks!
Berto
 


And I believe there is more to it than just the $800/yr franchise tax. A lawyer buddy said it's -well- worth it to go out-of-state if you are bringing in good money, Cali will rape you.


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dsiomtw said:
You're gonna hassle with all that just to save $800?

Not sure if serious?

Focus on making more money.

Those boobs are also disgusting.
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lol MUCH more benefit than $800 for doing it in eather of those states... but i agree with how disgusting those boobs are:uhoh2:
 
I just hit my accountant since I saw him on IM. He said if your revenues are 500k or less it's only $900. If it's between 500k and a mil it's only $2,500. If your revenues are 1 mil to 5 mil it's only $6k. So not exactly a whole lot of money, and I don't see how it would be worth the hassle of setting up in another state based on these figures.

An S-Corp pays 1.5% so that can add up a little with higher revenues ... but just use an LLC and forget it.

(Technically you add $800 to each of these for the franchise tax fee)
 
you guys are all vaginas. maybe he makes 20m per year and just hates paying franchise taxes. maybe he wants to save that $800 to spend on blow and hookers. what the fuck do you care? he didn't ask "is $800 is a lot of money?", so stop telling him it's not.

i want an answer to this too -- can you incorporate in delaware/nevada without getting fucked? i'm registering my s-corp sometime this month; i'll be the first to admit i'm not super-ballin' and $800 is a lot of money to me, if i can avoid the franchise tax i'd like to, but the s-corp will save me more than $800, so i'm registering it either way, regardless of what state.
 
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Hah thanks for some of the serious responses. I love fake boobs.

Part of it is the principle of the matter. $800 for the privilege of doing business in CA kind of disgusts me. It's not a ton of money to me, but if I want to create more LLCs such as this other project, it adds up.
 
S Corp pays 1.5% tax on top of the $800 dude. It's different from an LLC.

Have you guys considered a C Corp? If you do things right your corp will have no income so you pay no income tax, and all you pay is just the $800 franchise fee. Less than with either an LLC or S Corp.
 
There's always so much fucking misinformation in these kinds of threads, it usually makes them completely worthless. As long as you're still living and doing business in California, they will still want a piece, regardless of where you may incorporate.
 
pharmhand said:
There's always so much fucking misinformation in these kinds of threads
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.. which is exactly why people should be talking with their CPA about these kind of questions instead of taking it into their own hands
 
Yes and no. The worst thing you can possibly do is just find some random CPA out of the phonebook and let them handle it. That's how people get in to big trouble.

Learning this shit doesn't take more than a few days of research. I would suggest that anyone interested learn the details themselves, then use lawyers, CPAs, etc. if necessary to implement. This shit isn't very complicated.

I answered the OPs questions with about 15 minutes of research. I'm looking to start a new llc or corp and *may* just do it here in Cali, so I was curious myself which is why I was happy to do it. But it's not a big deal ...
 
Im not in Cali, but I did my LLC in my home state. I think if I was to every do it again and do something out of state, I'd just go all out and do a corp offshore like in Panama.

Doing the corp out of state is barely easier then forming the corp offshore in a trusted country. If your trying to escape all the fee's and such, might as well go balls out and corp somewhere like Panama and take a vacation there once and a while too.

Other then that, at least corp in a tax free state.
 
If you live in CA or do any business in CA, you can't get out of it. Even if you register in another state they will go after you if they believe any portion of your business was conducted in their state. CA has huge financial problems since they gave away all their money in social programs, they are going after everyone they can and are well-known for being one of the most aggressive states in this area. Your best bet is to get out of CA if you can.
 
pharmhand said:
There's always so much fucking misinformation in these kinds of threads, it usually makes them completely worthless. As long as you're still living and doing business in California, they will still want a piece, regardless of where you may incorporate.
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This is what I was afraid of. Especially with CA in a constant budget crisis, they are going to see this LLC from another state but I'm making all this money here and probably investigate.

Looks like as long as I'm in CA, I'm paying it or taking too big of a risk. Or possibly have a relative own the business elsewhere, but I don't want to get into that.
 
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