llc, business-registration, new-york, delawareI have a Delaware LLC, but I currently live in the NYC area because of my full time job. The LLC was created before I ever got to NYC. What I am trying to do is figure out whether I should get rid of my Delaware LLC and create an NYC LLC or just register my LLC to do business in NYC (while having a virtual office)? Which one is better and why?
Believe this is the analysis that you're looking for, Practical Considerations for Forming LLCs in New York and Delaware:
At first blush, LLC formation in New York seems costlier than in Delaware, and Delaware has certain other advantages. As stated above, I often advise my clients to form in Delaware, determine next where they will be "doing business" and proceed to qualify their entity in those jurisdictions. This is not the lowest-cost approach, but does provide the best protection of the laws.
Although New York's fees are higher than Delaware's, a foreign LLC doing business in New York will not be able to avoid the fees by forming their business outside of New York State. An LLC's members will also be taxed according to the location of income-earning activities, so forming outside of New York to avoid tax will not achieve the desired effect.
A foreign LLC doing business in Delaware, on the other hand, does not have to register until it needs to bring suit. The LLC must pay back fees, however, and an additional $200 for each year of doing business without registration. Delaware's taxes similarly apply to LLCs based upon the location of the income-earning activity.
One wishing to form an LLC at lowest cost should therefore look first to where its business activities will occur; if the LLC will do business in only one state, then it should form in that state. If New York is chosen, the county named in the articles of organization will be the county where publication will take place and this choice will impact the publication costs. In the event an LLC will be doing business in multiple locations, it is generally my recommendation that the entity be formed in Delaware and qualified in the appropriate jurisdictions based on the relevant jurisdiction's doing business test.
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