Upton, MA asked in Business Formation for Massachusetts

Q: I live in MA but want to start an LLC in Delaware. What would I pay for taxes / fees to do business in MA and / or RI?

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1 Lawyer Answer
Kas DeCarvalho
Kas DeCarvalho

A: Living in one State but forming an LLC in another State isn't the appropriate question to be asking...the right questions have more to do with whether your business has enough of a "nexus" of activity in the non-organizing State to require qualification in the non-organizing State. In plain English, if form the LLC in Delaware, but you have significant business activity in the Commonwealth and/or Rhode Island (by way of example, meetings with clients, physical/storefront/retail presence, amount of revenue derived within the State, whether you have employees), then you may be legally required to qualify your Delaware LLC to do business in Mass. and/or R.I. If that's the case, then at minimum, you'll need to keep current with your Annual Report filings in Mass. and/or RI, and the relevant Foreign Jurisdiction (yes, including your State of residency--still a "foreign" jurisdiction with respect to your Delaware LLC) will require you to pay taxes on income derived within that jurisdiction. Ultimately, this is a very good question to ask your CPA.

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