Loading...
Answers
MenuCan I have an Ohio business with a California address?
I opened an LLC while living in Ohio, then I moved to Georgia. To have a more permanent address, I got a VirtualPostMail.com address in Walnut, California. I wonder if there are tax or other implications and if the IRS allows this option.
Answers
You can live wherever you want and have a business wherever you want. Especially with an LLC.
The IRS doesn't care because with an LLC, the profit flows through the business to it's Members, to the extent of their basis. So if you own 75% and another Member owns 25%, then the profits are distributed that way and reported on the "K-1" with the federal return. LLC's pay no federal income tax as it is al allocated to the Members.
The only issue is at the state level wherever you live. If you meet the residency test for that State (which you can find online), then that is where your state taxes - if any - would be calculated and paid based on your K-1 return. You certainly wouldn't want it to appear you have a CA residence with their tax level!
I would suggest that you establish residency wherever you live. I too have a virtual mailbox AND live outside of the country. Doesn't affect my LLC in the states at all.
Feel free to reach out if you need further help.
As long as you pay your taxes, I don't think any government cares. However you are just causing yourself more reporting issues and problems. You have to file corporate paperwork in both states, is it worth the paperwork. Easier to get either a new corp, or a new register agent in location where corp is. Anyway the bigger problem I see is; how do your customers see it, are you losing business because of it, are they thinking your hiding something... I see this all the time with people selling in Florida, but have a Nevada Corp. People don't trust them as much, And isn't sales all about trust.
Related Questions
-
If I have 51 percent and my partner has 49 percent of our company, what real decision making authority would I have?
On paper you have the advantage but after several startups control resides in he who knows how to execute the vision of the company.Hernan JaramilloHJ
-
Where to incorporate a new software as a service busines?
I'll keep try to keep this answer brief, but there are several factors and nuances that can be discussed in more depth. Where you decide to incorporate partly depends on what your future goals are with your company. Companies that plan to seek venture capital or go public typically choose Delaware as the state of incorporation, and usually choose a C-Corp. Delaware has a very well developed body of law surrounding corporate governance and that provides comfort and more certainty to future VC investors. If you're not planning to seek VC money any time soon, an LLC is a smart decision because of the tax benefits it can provide to you as the owner. It sounds like you want to grow your company on your own without outside financing. If that's the case, I would recommend forming your LLC in California. Regarding California vs. Delaware, one benefit to forming your LLC in California is that you can avoid paying a registered agent fee which can cost anywhere from $100-200 a year. If you plan to seek venture capital down the road, you can reincorporate in Delaware.Jared IversonJI
-
In a startup with a globally-spread remote team, does it still make sense to incorporate in U.S./Delaware vs. somewhere overseas?
Delaware C-Corp I usually Delaware is the best choice for any startup looking for fundraising with a US focus. However, if you are a remote and global team, an overseas or foreign corporation or US tax purposes might make sense. You'd have to talk to an advisor who can dive into your situation, but it would be more difficult for the US owner come tax time, as he'd likely have to file form 5471 to the IRS for any controlled foreign corporation, and form 90-22.1 for any foreign bank accounts. There are a lot of other concerns I didn't hear you raise that entrepreneurs usually have and ask me about, namely banking and merchant accounts/ payment processors. In terms of accepting online payments, any US corporation or LLC is far and away the best option for a company. It's difficult to suggest without knowing more about the company but you might explore Delaware, Wyoming, Hong Kong and other offshore jurisdictions for your legal entity. Each tend to have positives and negatives and there is no one size fits all solution. I do write about issues of incorporation quite regularly on my website FlagTheory.com - so you can read those articles for free, or we can schedule a call - Clarity.fm/incorporation when you have specific questions. Thank you and hope this was helpful!Edmund JohnEJ
-
Should I hire a bookkeeper? (what does one do exactly?)
NIcole is right. When I first started my business I thought I was saving money by doing my own bookkeeping. It took me much longer than it would take a bookkeeper - all time that I was not spending on marketing or billable activities. And in the end I made errors which made the initial work of the bookkeeper longer. I now have a consistent routine. My bookkeeper picks up all my material monthly and does my books in less than 2 hours. Very worthwhile.Richard LockyerRL
-
How can one file an EIN without an SSN/ITIN?
You should retain a lawyer, or another qualified individual, to act as the third party designee for the corporation (if you do not have a partner or co-owner who is a US citizen). The designee should prepare Form SS-4 (Application for Employer Identification Number) and Form 8821 (Tax Information Authorization) for the corporation’s president to sign and return.Matthew MeltzerMM
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.
