I’m going to be investing in a venture which will have CA sourced income so I was thinking of forming an LLC in California. I have never done business in CA before, so this is new to me.
As far as I can tell, CA charges $70. A managing member is located in CA, so I don’t need a registered agent.
If I go with NV, I will have to pay $75 + registered agent + $70 to do business in CA anyway.
I’m wondering what the annual fees for each state are and if anyone has additional information I may be missing. I know the NV laws are better for privacy, etc, but that might be ok if its significantly cheaper. Thanks in advance.
CA has rather punitive state taxes, and the minimum annual franchise tax is $800. These taxes will apply even if your entity is domiciled in NV, as CA imposes tax on businesses that operate in CA, not just those domiciled there.
True privacy, in the real world, is difficult to attain. Banks, title companies, credit card companies, everyone exchanges information these days.
nevada has its advantages but the whole idea of “absolute” privacy and tax protection in nevada is a bit over sold by people making money from selling products to “protect” you
taxes and asset protection are complicated, in my experience debt against property is one of the biggest protectors of a real estate asset, in most locations a recorded mortgage will trump a creditors claim against real estate
as far as taxes, if you make money on real estate, use it to leverage your way into more, if someday you have to pay a bunch of taxes, consider yourself lucky that the real estate projects went well
Good question as i may have rambled a bit in my answer, so ill ramble a bit more.
The poster has declared that thier project(real estate) is in CA. Therefore when I do business in CA as I do I am legitimately obligated to pay tax, etc in that state, unless a specific case can be made for some sort of taxation reciprocity.
“So my answer to a 2 year old would be to have some entity established in CA. Have as much of the income go to NV or another low tax place thereby minimizing the taxation on the CA entity.”
From an asset standpoint, its been my experience that layers of protection offer more privacy that location.
As far as taxation, legitimately, money earned and taxed in NV or your pick of other low or no state tax states is supposed to be utilized in those states.
CA taxes you on 1) income earned in CA and 2) income earned everywhere else if you live in CA.
If you live in, or own property in, CA you cannot (legally) escape paying CA tax, irrespective of where your entity is domiciled.
Thus, your NV entity that owns property in CA will be subject to CA minimum franchise tax of $800 a year, a CA tax return, and a NV return (no state tax - just an annual fee). If you domicile in CA, you can at least avoid the extra return; you can’t save any taxes.