Q: I'm from NYC. I am starting an e-commerce business. Could I get an LLC in Wisconsin? What are the pros and cons?
A: There is a lot of misinformation online that is preying on the public. Generally, the best State to form an LLC is the State is where you planning to operate the business from. Here are some things that may go wrong if you open a Wisconsin LLC, while you are in NY: 1. You would have a very hard time opening a bank account in NY. 2. You would subject yourself to taxes in both Wisconscin and New York. 3. A Wisconsin LLC is subject to Wisconsin LLC Laws. An LLC that does not have a tailored made operating agreement to protect its owner it's almost useless. Here, your LLC documents would not be able to be molded to protect you. NY lawyers are not familiar with Wisconsin LLC Law. 4. If something goes down wrong in the business, it would likely take place in NY. A NY plaintiff with a NY lawyer, would easily parade the LLC in NY Courts, and say that this owner is a con man, he is not even properly registered in our State. 5. I have had 2 clients who formed Wisconscin LLCs, who came to trying to fix their mistake. In both cases, we dissolved the Wisconscin LLCs. In both cases, the owners did not do NY LLCs because of the newspaper requirements. The truth is that you can form a NY LLC for around $1,200(including publication and legal fees). NY LLCs are more expensive to set up, but they are cheaper to operate. For example, most states charge $50-$150 for an annual report. In NY, LLCs typically only pay $9 for every 2 year. In 2-3 years you have offset the publication expense, by just the report filing price differential. Hope this helps.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.