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tehc0w 27th April 2007 10:11 AM

Forming An LLC In Delaware, Operating From New York, With Clients Around The World
I'm hoping for some advice on how to start my own company from those that have done so.

I've already decided to start an LLC in Delaware because it's suppose to be cheaper and easier than starting one in New York (no need to publish in your local papers), where I live. So how do I go about starting my LLC? I've googled and apparently there's sites that can set it up for you for like 100-300 bucks. Is this an appropriate way to start your business or should I use a business lawyer?

What do I need to do to conduct business in New York if my company is in formed in Delaware? I know you need some sort of certificate or something, but I don't plan on actually having a physical store location or anything. I'll mainly be doing business out of my apartment as a side job. Also, if I'm selling products to people around the world, is there anything else I need to be concerned about?

Since my business will be a side job, do I really need a lawyer or tax advisors? I'd would like to have a lawyer due to the "sensitive" and law-suit prone nature of my business, but the capital involved is just so small (less than 100k). For similar reasons, I feel I would need a tax advisor to help manage the finances and taxes of my new company (as well as advise me on how to minimize my own taxes through business expense deductions).

If I were to need professonal counsel such as a lawyer or tax advisor, where do I go about finding them? I hear yellow pages are bad. I did find one law office on that seems to specialize in what I want to do, but is it reliable to find lawyers/law firms online? I have friends that are in the law business, but they mainly know medical law and political law (not what I'm focusing on). Typically, what sort of fees should I expect? Is a "free" consultation really free?

If someone can provide me with some advice or direct me to where I can find answers to my questions, I'd greatly appreciate it.

Logan 27th April 2007 11:09 AM

Welcome aboard :standingw

I think you are making a lot of assumptions and should get professional advice. For example, you mention not publishing in your local paper ... but that is usually associated with setting up your dba (doing business as) versus the creation of the entity as a sole prop, partnership, llc or inc. I am not familiar with your area or scenario, so can't say - but my previous experiences have been different than what you describe with that.


I'd would like to have a lawyer due to the "sensitive" and law-suit prone nature of my business, but the capital involved is just so small (less than 100k).
Then I wouldn't hesitate with that. There may not be a lot of legal advice needed, and if there is ... well you should consider that as well.

Regarding where to find a lawyer, I wouldn't depend on yp/online.


I have friends that are in the law business, but they mainly know medical law and political law (not what I'm focusing on).
I wouldn't brush that off so quickly as a route. Do any of your contacts with medical law or political law know any lawyers that might work - I know many lawyers that don't practice in a particular area but know others that do.

zoobie 27th April 2007 11:30 AM

Hello there! Great to have you here. :wave2:

Just to be sure and erase doubts you have in mind, i think it is better to consult a lawyer. This is also to answer questions on legal concerns about your business.

tresmom6 27th April 2007 10:15 PM

I would hire an attorney. I am in an S corp and it was a lot easier than I thought it would be. I can't remember how we spent, but it was worth it. We also hired an accountant. I don't know if that is necessary for you, but it sure made my life easier.

SeattleCPA 27th April 2007 10:35 PM

Some ideas about forming an LLC
I'm new here (just registered) so I'll try to first give a bit of bio info to let you place my remarks in context. I'm a CPA in Seattle area, author of QuickBooks for Dummies (and a bunch of other books, too), formerly an adjunct tax professor at GGU (where I taught llc versus S corporation taxation), and also the author of do-it-yourself llc formation kits for, well, all fifty states. I won't plug the URL here, but you can easily enough google on me or llc formation to find the sites...

On to your questions/comments:

1. If you'll operate in NY, you need to either form your LLC in NY... or you can form in Delware and then register in NY as a foreign LLC. This means that you will have to go through the NY formation steps (including giving notice) one way or another. People often misunderstand this... Out here in the West, people commonly choose Nevada. But this doesn't work. If you have a presence in a state, you have to register and pay taxes to that state.

2. You can rather easily form an LLC yourself... Or you can use one of the online paralegal services... Or you can have an attorney do it. I think a general rule is, the more you spend, the less work you have to do. And if you involve an attorney, you can get your questions about liability protection answered.

3. My general recommendation about using an attorney or a do-it-yourself approach is this: If you're setting up something like an LLC or corporation for tax purposes, I think you can easily do it yourself. If you're setting up an LLC or corporation for legal liability limitation purposes, I think you want spend the money on an attorney.

4. As far as finding an attorney, llc formation is really pretty basic. Using the Yellow Pages, IMHO, would be fine. Google search would work just fine, too. A referral from one of our friends would also be a great way to do it.

Good luck!:imnew1:

Logan 28th April 2007 12:40 AM

Welcome aboard Steve :standingw

SeattleCPA 28th April 2007 09:23 AM

A bit about Delaware Corps and LLCs
Thanks for welcome, Logan,

After I posted yesterday, I thought I should have mentioned the two or three reasons that ( as I understand it) people incorporate in Delaware or form their LLC in Delaware.

Note: I'm not an attorney, but the guys I taught the graduate tax class on "choice of entity: LLCs versus S corporations" at Golden Gate University with were attorneys and so we went over all this..

But back to the reasons for forming a business in Delaware:

1. Delaware corporation laws are very business friendly. Example: I'm not sure if this is still right, but to give you an idea, I think at one time Delaware , rather uniquely, allowed corporations to indemnify their boards of directors against shareholder lawsuits...

2. The Delaware Chancery courts are probably the best corporate law courts in the country. Obviously, you can never trust completely some organizations self-evaluation, but here's the text from the court's home page: "The Delaware Court of Chancery is widely recognized as the nation's preeminent forum for the determination of disputes involving the internal affairs of the thousands upon thousands of Delaware corporations and other business entities through which a vast amount of the world's commercial affairs is conducted. Its unique competence in and exposure to issues of business law are unmatched." I hear corporate attorneys say similiar things.

3. Delaware has offered large multistate corporations some very favorable tax laws, such as (I recall) the ability to source trademark royalty income to Delaware tax free.

This things all sound great, of course, but there aren't relevant or all that revelant to a small business...

AndrewHealth 29th April 2007 06:36 PM

Hey Steve - welcome to the forum.

tehc0w 30th April 2007 01:26 PM

Thanks for all the great advice

So if I make my LLC in Delaware but operating in New York (where I live) I still have to go through the entire LLC formation process in NY and still pay NY taxes? So I really shouldn't even bother forming in Delaware? I should just form in NY?

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