A limited liability company or LLC features some of the attributes of a sole proprietorship, partnership, and corporation in the state in which it is formed.
For example, Wyoming LLC benefits often appeal to business people, as they are flexible, if not lenient.
When you form an LLC, you must consider the type of business, the risk of liability, and your assets. Limited liability allows the owners or members of an LLC to avoid personal responsibility for LLC lawsuits or obligations.
If an LLC files bankruptcy, the members of the business do not have to pay for the company’s debts from their bank accounts. If members are sued, they do not risk the loss of their home to settle the lawsuit.
The IRS considers LLC taxation in the same way as it does taxation for partnerships or sole proprietorships – a pass-through entity. This means that taxes pass through the business to the owner, and he or she is responsible for reporting the profits and losses on his or her tax return.
I get this question asked ALL THE TIME (especially from my non-US clients).
If you’re a U.S. resident, you should definitely form your LLC in the state where you’re physically located.
However, if you’re not physically located in the U.S. and won’t be doing business in the U.S. then you have a choice of where you can form your LLC… in this case, I definitely recommend forming your LLC in Wyoming.
Short answer: you should register your LLC in the state where you are doing business(the state where you have a physical presence). For example, if you will be operating your business in California, then we should register your LLC in California.
However, if you are not planning to have a physical presence in the US (meaning that you will be operating solely from OUTSIDE the US), then we should form your LLC in Wyoming, the best and cheapest state for non-US residents.
Wyoming LLCs offer the best asset protection laws, no state or capital gain taxes, very low annual fees of $50,