Independent guide, not a government website. Official records are always linked.

Which state to form your LLC in

For most small businesses the best state to form an LLC is the state where the business actually works. A company doing business in a state has to register there anyway, so forming somewhere else often means two sets of fees and reports.

Which state should you form in?

Three questions. The answer follows one rule most owners miss: a company that does business in a state must register there, so forming somewhere else often means paying two states.

Last updated

How to use the chooser

Answer the questions above: where you live, where the business will have an office, staff or customers, whether you plan to raise money from investors, and whether you are a US resident. The chooser then suggests a state to form in and shows where you may also need to register. Each suggestion links to the state guide and its fees.

Treat the answer as a starting point. It applies the general rules below to your inputs. It does not know your full situation and it is not legal or tax advice.

The foreign registration rule

This rule shapes almost every answer. A company that is doing business in a state has to register in that state, even if it was formed somewhere else. The registration is called a foreign registration or certificate of authority, and the company becomes a foreign LLC there.

Once registered, it pays that state's registration fee, keeps a registered agent with an address there, files its reports and pays its fees. It also keeps doing all of that in its home state. So an LLC formed in one state and run from another pays two sets of state costs every year.

If a company should register and does not, many states charge penalties and bar it from bringing a lawsuit in their courts until it registers. Our foreign LLC registration guide covers the filing.

Why your home state is usually the answer

If you live and work in one state, forming there means one formation fee, one registered agent, one report schedule and one register to keep current. Forming elsewhere adds a second state on top, because the foreign registration rule still applies where you work.

When another state can make sense

  • No physical base. An online business run by owners outside the US, with no office or staff in any state, may not be doing business in any one state. Then the choice is more open. See LLC for non-residents.
  • Investors. Companies that plan to raise venture money often form in Delaware because investors and their lawyers know its law well. That is usually a corporation, not an LLC.
  • Holding companies. An LLC that only holds assets and does not trade may have more choice.

Even then, compare the yearly costs and rules. The Wyoming vs Delaware vs Florida guide sets three common choices side by side, and the LLC cost calculator adds up state fees for any state.

Before you decide

Check the name is free in the state you pick with our LLC name search. Then read that state's guide for its filing office, fees and report rule. An attorney or tax adviser can confirm the choice if you work in more than one state.

Once you choose, open that state's formation guide, such as Wyoming, Delaware or Nevada.

Good to know

Questions people ask

Is Delaware or Wyoming the best state to form an LLC?

For some companies. They appeal to businesses that raise outside money, hold assets or have no physical base in any state. If you work from one state, you will usually have to register there too, so the benefit can shrink.

What does doing business in a state mean?

Each state defines it in its own law. An office, staff, a shop or regular sales in person usually count. Many states list activities that do not count on their own. An attorney can confirm where you stand.

I live outside the US. Which state should I pick?

If the business has no office or staff in any state, you have more freedom to choose. Look at the state fees, the report rules and what your bank and payment providers ask for. Our guide for non-residents covers the steps.

Can I move my LLC to another state later?

Many states allow a conversion or domestication that moves the LLC's home state, but not all, and both states have to allow it. Forming a new LLC and closing the old one is the other route.

Does forming in another state lower my taxes?

Not by itself in most cases. States tax income earned in them and can apply their fees and taxes to a registered foreign LLC. A tax adviser can check your situation.

Start your LLC