Register LLC in WY for SaaS business?
Building a SaaS business right now and I need to register for an LLC sometime soon. I'm thinking WY is the best option as I'm in the air as to where I plan on living and I may end up living in WY. Or Maybe WI, or NH. Don't know yet.
My plan is to enact as an S corp and treat myself as an employee, if that matters.
Only issue is, I don't want to waste my time registering in WY if I'm going to get double taxed or be forced to file for a foreign entity in the state I'm living in.
Plus say I move to NH, I may only stay for a year. So it wouldn't make sense to setup as an entity there. I travel a fair bit so my residence is really up in the air.
Currently living in MN. Going to register this LLC in Jan 2020. Curious what others have done.
Trending on Indie Hackers
Honestly, I'm pushing off registering a new entity in Jan a bit longer until I hit a validation revenue goal and I move before June. I'm using my old biz LLC for tax purposes and expenses. For me, it's kind of silly to do the paperwork (and pay the state) when so much is up in the air. Plus, I realized my time, energy and talent should be focused on the customer right now to make sure I even need to incorporate.
Unless you're interested in getting investors or your business is complicated wouldn't an LLC or DBA in your home state be enough at this stage until you get situated? Both are cheaper/simpler than the other incorporations.
Plus, if you chose a state you're not a resident in... I do believe you'll have to register your biz as a foreign entity (LLC, S-corp, C-corp) in your home state too.
Thank you for this, I agree, I'm going to hold for a little bit until everything is resolved but revenue is coming in, enough to warrant and LLC. I'll be sitting down with a few CPAs soon to figure it all out.
Yeah, starting with an LLC and then switching it up to another entity shouldn't be that difficult esp if you're a solo founder. Your time is more precious than money right now. Good luck with the CPA's!
Hey Try https://www.firstbase.io/en for registration
I looked around for other options. For what they are charging they are worth the price.
They are also on IndieHackers
https://www.indiehackers.com/product/firstbase-io/followers
Thank you, I'll check them out
Controversial Opinion: But don't worry about this stuff until you are post revenue. This is especially true if you are a solo founder. When I'm starting a new business it's always just a sole proprietorship. I'm still able to write off everything I need to, and file taxes under my own name. Once you are doing more than $1,000 MRR then you can hire an accountant or attorney to help advise you.
I've started 3 businesses. Every single business it was just me doing a sole proprietorship. One business I transferred to an LLC after hitting about $5,000 MRR, another I consulted an attorney and he helped me do an S-Corp after hitting $1,000 MRR, and my very first business I ran up to $7,000 MRR and it stayed a sole proprietorship all the way until I sold it.
Just focus on building a business, the legal stuff can wait.
Agreed, I'd hold off but there is revenue coming in, enough to warrant an LLC. I'll be sitting down with a few CPAs and I'll get this all resolved. You provide a great point though. Thank you
This is a good resource that I once found on Hacker News: https://www.lawavocado.com/
Checked it out, helped answer some questions I had for sure. Thank you
If you ever plan on raising money from investors you will need to be a Delaware C corp.
That is one of the many questions I have for the CPA if I should go with a C corp. I don't think I will but I already have been in talks with investors so anything is possible.
If it's just an online business then it shouldn't matter where you file. I chose WY for my LLC because it's one of several common choices due to ease of setup and low price (DE and NV are others to consider, but WY is the cheapest). I have no plans to move to WY.
WY Secretary of State has a good website that makes it easy to apply and pay your registration fee (https://wyobiz.wy.gov/Business/Default.aspx). I used a registered agent (https://www.wyregisteredagent.net/) to handle registration and provide an address etc. If I remember correctly it cost about $100 to set up and an additional $100/yr for registered agent fee + WY registration renewal.
A single member LLC is a passthrough entity so the LLC shouldn't change your taxes. Once you are making enough money, you'll elect to be an S Corp, which is also a passthrough entity but with potentially less tax burden. By this point you will probably have an accountant anyway, but because it is still pass-through and you don't do business in WY the choice of registration shouldn't affect your taxes.
But don't you have to file for a foreign entity if living in another state?
Say I move to NH, then I have to file for a foreign entity in NH. Pay personal income state tax there. Or do I even need to file for a foreign entity?
I don't think you're using the term foreign entity correctly. You can do business across states without filing as a foreign entity. WY has no personal or corporate income tax. You'll pay all your income tax, including tax on LLC income, in whichever state you're a resident.
Everything I read up on and so far the CPAs I've talked to said, if you're registered in WY and live in CO, you will have to register a foreign entity in CO since you're technically doing business there. Even if you don't have an office. So long as you live in CO and say work from home. But if you were say living in an RV and traveling all the time, with a mailing forwarder in WY and your license based in WY, then you wouldn't have to register a foreign entity. Though some exceptions there.
Got it, makes sense and thanks for the update!