Starting an LLC can protect your online business from liability and offer excellent tax benefits while getting the company off the ground.

It is also required to have a corporate entity if you want to become an authorized reseller for suppliers. In addition, an LLC grants you:

If you are based in the US, your home state is the best state to form an LLC for your online business as it simplifies administration.

You can also act as the registered agent if you’re available during regular business hours.

For example, if you form an LLC in Delaware but you don’t live there, you’ll be required to register that LLC in your home state as a Foreign LLC to do business in your home state. The states other than your home state promoting formation usually stand to benefit financially from the LLC formation.

If you are NOT based in the US, we recommend that you form your LLC in either Delaware or Wyoming.

Delaware is one of the most business-friendly states. Some business owners opt to form an LLC in Delaware if they plan to convert the LLC to a C-corp. There’s a certain perceived prestige to say your company is from Delaware.

Additionally, Delaware also doesn’t tax out-of-state income, making it an attractive option for online businesses.

The main reason online business owners choose Delaware to form an LLC is the increased privacy protection and better legal protection than other states. The Delaware Court of Chancery is specifically set up to deal with corporate and business legal issues.

Wyoming offers low tax rates, making it an attractive option to form an LLC for your online business. There’s no income tax or franchise tax. Sales tax is also lower than the national average at just 4%. You’ll also only have to pay $60 as annual reporting fees, making it an affordable location to start an LLC.

Another advantage is that the state allows LLC owners to remain anonymous on the public record. This is a benefit for business owners who want to remain private or don’t want the business to be associated with their name.

Yes, you can form an LLC in a state where you don’t reside. You’ll need to have a registered agent and registered office in the state where you form the LLC. If you plan to operate in your home state, you’ll also need to register as a foreign LLC there.

Yes, you can move your LLC to another state. In that case, you must formally transfer the LLC from one state to another. The LLC must be in good standing.

An LLC may be registered to do business in multiple states simultaneously, so you can operate your online business in multiple states.

Yes, you will need a physical address, called a registered address, in the state where you form the LLC. You can hire a registered agent service to provide the physical address if you don’t have an office in the state.