I live in Phoenix, AZ, I want to set up an LLC in WY in 2 months because it is a much better state to set one up in.

Asked 11 months ago - Glendale, AZ

In the meantime I need to set up a dba before hand to get paid by a company hiring me for consulting. Can I set it up also in WY or do I need to set it up in Phoenix where I live? I'd rather make it all easy and in the same state but not here.

Attorney answers (4)

  1. Douglas Garth Edmunds

    Contributor Level 13

    5

    Lawyers agree

    Answered . You appear to be creating more work for yourself. I doubt you will realize any real benefit by forming in WY; obviously hard to say for sure without knowing more about your situation and needs.

    You live in AZ, and it sounds like you will be operating your business in AZ. Thus, more than likely you will be forming the LLC in WY, then having to register that WY LLC in AZ as a foreign LLC. Now you get to deal with state agencies in two states.

    There are many websites out there suggesting that a WY, NV, AK, or DE entity are "better" for one reason or another. Most of these reasons are not really a benefit to the small business.

    To register a 'dba' in AZ you can read this handbook http://www.azsos.gov/business_services/tnt/TNTH... but in reality, it is not necessary. As for WY 'dba' laws, you'll have to wait and see if any WY licensed attorneys answer.

    Douglas Edmunds is in the business of helping people and companies file for bankruptcy protection. The bankruptcy... more
  2. Samuel Watson Eastman

    Pro

    Contributor Level 14

    4

    Lawyers agree

    Answered . In the short-term, can the company just make payment to you personally? I ask because, assuming that this is a consulting business owned solely by you, setting up a trade name (i.e., a dba) without having an entity organized is essentially the same thing, as it will be under a sole proprietorship, rather than the LLC you are contemplating. In addition, I must point out that while it is often very advantageous to set up LLCs in the state of Wyoming, if you are doing business in the state of Arizona (which it sounds like you are), you will need to register your foreign Wyoming LLC with the State of Arizona, and likely pay Arizona state taxes as well. The filing fee for registering a foreign LLC in Arizona is $150, and if you are rendering consulting services in Arizona, registration would be required to avoid penalties. In addition, you would likely have nexus in Arizona for state tax purposes, so organizing your LLC in Wyoming would probably not do very much in the way of saving on state and local taxes.

    Using a Wyoming LLC can be advantageous, but only in certain circumstances, and with the advice of an attorney experienced in such matters. I set up Wyoming entities with some regularity, but often advise my clients against doing so when it provides no real additional benefit. I highly suggest consulting an attorney experienced in both organizing Wyoming entities and state an local taxes before pursuing this course of action. Best of luck with your business.

    This advice is for INFORMATIONAL PURPOSES only and should not be relied upon as legal advice. No attorney-client... more
  3. Joseph E Holland

    Pro

    Contributor Level 10

    1

    Lawyer agrees

    Answered . I don't understand how WY is a much better state to set up an LLC. Other than for anonymity, AZ's laws on LLC's offer as much protection as any other state's. You don't have any ancillary filings in AZ and you wouldn't need to set up an outside statutory agent, like you will (at a cost) in WY. You should speak to an attorney about the consequences for setting up in AZ vs. WY.

    No one should rely upon generalized information for their specific matter unless they have consulted with a... more
  4. Michael T Warshaw

    Contributor Level 17

    2

    Lawyers agree

    Answered . There are many hidden costs and complexities involved in creating a foreign LLC, as you propose. You need to sit down with a lawyer and a CPA to discuss the pros and cons of your planned course of action, since it may not be the most advantageous one for you to pursue.
    My colleagues have given you solid analysis and reasons why you may not be pursuing the best course of action and I agree with them. You need to sit down with a business lawyer and a tax adviser to figure your best course of action. Use the find a lawyer feature to locate one near you, if neither of my colleagues are convenient to you

    The content of the this submission is intended to provide general information on the topic presented, and is... more

Related Topics

Sole proprietorship small business

A sole proprietorship is a business owned and operated by one person in which there is no legal distinction between the business and owner.

Small business LLCs

An LLC (limited liability company) is a business entity that has elements of both a corporation and a partnership (or sole proprietorship).

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