Should I Form a Company in Nevada, Wyoming, or Delaware? – All Up In Yo’ Business

Hi everybody I am attorney Aiden Kramer with
the office of Aiden Kramer in Colorado. Welcome back to All up in Yo Business! So I put up a video a few weeks ago about
why do so many companies form in Delaware and that sparked questions from you guys about
other states that are popular for forming businesses like Nevada and Wyoming. Those three states Nevada, Wyoming and Delaware
are all very very popular for out of state companies to register in. Whether it’s LLC, Corporations whatever a
lot of companies form under the laws of Delaware, Nevada, Wyoming even if they aren’t physically
located in those states. So I wanted to talk about Nevada and Wyoming
since it came up when we were talking about Delaware. What we are not going to do in this video
is go through all of the pros and all of the advantages that Nevada and Wyoming provide
to companies. Number one because they are pretty similar
to Delaware. If you are wondering why people form in Delaware
watch my last video about that and the advantages pretty much all apply to Nevada and Wyoming
as well. Business friendly laws, low or non-existent
taxes all three states provide similar benefits to companies. The second reason I am not going to go into
too much detail about Nevada and Wyoming is because same with Delaware it just doesn’t
really matter to most companies. These benefits that these states provide unless
your company is physically located in one of those states you are not really going to
see any advantage or any benefit to forming in a state that is not where your company
is physically located. So lets say your business your office is located
in Colorado but you read something on the Internet or one of your friends tells you
no, no you shouldn’t form in Colorado form in Nevada they don’t have any personal income
tax form in Nevada. If your company is physically located in Colorado
even if you form an LLC in Nevada you are still going to have to register in Colorado. You are still going to have to register as
a foreign LLC or foreign entity in Colorado even though your also registered in Nevada
and guess what Colorado does have income tax so you may be getting out of paying them in
Nevada but you are still paying them in Colorado. You are paying them the same whether or not
you had formed in Colorado as a domestic entity or if you formed as a foreign one. You are still going to be paying taxes in
Colorado. So now all you’ve done by forming in Nevada
is instead of Colorado is you pay two filing fees. I don’t know exactly what Nevada’s filing
fee is to form an LLC but I am assuming they charge something. Colorado charges something so now you’ve paid
two states to form an LLC and in a year Colorado is going to make you file a periodic report
and I am assuming Nevada’s going to make you file something annually also. So now you’re paying taxes, you’re filing
in two different states. If you get sued maybe Nevada’s going to provide
you some benefit but really if you are doing all of the other things that I’ve told to
avoid piercing the corporate veil you’re going to get that same protection in Colorado. The courts are probably going to decide the
same way regardless of Nevada or Colorado. So just as I said in the Delaware video unless
your company is going to be public, like you are going to be issuing an IPO and going public
on the stock exchange or if you are seeking millions and millions of dollars from investors
you are not going to get any benefit from forming in a state that is not the state where
your company is physically located. If your company is in Nevada or in Delaware
or in Wyoming then take advantage of those laws and form in that state where you are
located. But for 90% if not more small businesses normal
businesses there is not going to be any advantage to forming in Nevada or Wyoming or Delaware
or any other state unless your company is actually located in that state. You are just going to end up paying two states
and you are going to end up having to worry about the laws of some other state in addition
to the laws of your state. So to summarize in case you guys didn’t pick
up on it my position is that it’s not worth it. Don’t waste your time, don’t waste your money
form in the state where your company is located. On a completely different topic I dusted off
my old shirt, do you guys remember Twilight? Remember that thing Twilight that was really
big a few years ago? Well I dusted off my old Team Jacob shirt. I really liked Edward, really he was my favorite
but I thought Jacob was just better for Bella and he was more of a man. I thought Edward was kind of a puss, am I
allowed to say that? I thought Edward was kind of a kind of whiny
but so I was Team Jacob. Go ahead an comment below were you Team Jacob
or Team Edward? Or team none of it maybe you were a Harry
Potter fan? I don’t know. Making the decision of where to form your
company, what state to register under and if you need to register in other states as
well it’s very dependent on your states laws and your own circumstances so it is always
always a good idea to talk to an attorney about that. Don’t just willy nilly go registering in Nevada
or Delaware talk to an attorney about it first and make sure you are making the right decision. If you are in Colorado or wondering if you
should form a company in Colorado I am happy to help, feel free to contact me my phone
number and email are below. Thank y’all so much for watching I’m Aiden
Kramer and I’ll see ya next time!

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