What are the associated costs relating to starting and maintaining a single owner or multi-operator Limited Liability Company? I realize that costs vary by state and by type, but what is a ballpark or more general cost benchmark? Would it be prudent to start an LLC prior to doing any deals to protect myself or do a couple deals and hope everything goes well. I am starting REI doing short sale deals on pre-foreclosure/ NOD’s.
In Rhode Island you have to pay $500 a year weather you show a profit or not just to maintain the LLC status. You also have extra money to spend when doing taxes because the accountant has to do a separate filing besides your personal filing. Probably another $300 to $800 more depending on the number of transactions being done inside the entity.
An LLC isn’t going isolate your personal assets from the business if you are actively managing the LLC, especially in the single member case. An LLC is not a good use of resources unless you are in a low cost state that allows the manager to represent the LLC in court.
it doesnt matter which state your llc is registered in for you to do business. if your state’s fee’s are too high, consider a cheaper state. just as long as you have a registered agent (an instate resident for reporting, like an attorney, family member or friend), you’ll be fine.
It does matter though. You always have to register with the state you operate out of as well.
So for example, I’m in Massachusetts. If I registered my LLC in Delaware I would have to pay the Delaware annual fees, PLUS the Massachusetts annual fees.
There may be some states where there is some kind of reciprocity or write-off but you are still always going to pay at least the most expensive state (e.g. let’s say it’s $200 a year in Delware and $500 a year in MA, i might be able to “deduct” the $200 a year from my MA ones and only pay $300 to MA but I’m still paying the $500 a year total).