Where Should I Register My LLC

Question

Hi, any thoughts on where to create an LLC? I've heard Florida is is one of the states that is landlord friendly and that it would be a good place. I've also heard that Utah and Montana are good for anonymity.

I currently live in Illinois and I have an Illinois registered LLC, but I am looking to relocate to Florida and invest in Florida, Georgia or maybe Texas. Should I register a new LLC in Florida, or should I consider Utah or Montana for the aforementioned reasons?

Thank you for your help.

George Skidis · Answer

Disclaimer: I am not an attorney, nor do I play one on television. I am an insurance agent, income tax preparer, landlord and President of the Illinois REIA.

First, the new Federal Business Entity Transparency laws that took effect in January 2024 blow most of your hide in plain sight planning out the window. Review FinCEN.gov to see how it impacts your choice of entity.

Register the business where you want. Just remember you must also register it in the state where you are doing business. Even though you have a Wyoming LLC, Florida state law prevails in a legal dispute in that state. That will also ruin most of your strategic planning and privacy wishes.

Let's say you went to a Busted Pockets seminar and spent $6.000 for one of their "SPECIAL" LLC packages in Wyoming, but you plan to do business in Florida. You will need to file two state tax returns, pay for two registered agents, file and pay one annual Domestic (resident) LLC registration in Wyoming and pay a second Foreign (out of state) LLC Registration in Florida thee state where you do business. There are also several other duplications. So, can you afford an extra $1,000 to $2,000 a year to support some out-of-town guru's pipe dream?

Asset protection is like building a castle. You need a moat, drawbridge, high walls, parapets, soldiers, an inner keep and more. But even that can fail. Just look at the number of times Jerusalem fell to foreign invaders.

As you can imagine, almost no one owns a castle anymore. However, we can build one out of combining the following: Getting a good attorney that practices this area of law, own property in land trusts, obtain property and casualty (liability) insurance, pay for umbrella liability insurance, personal property trusts, proper maintenance, documenting all property maintenance requests and completions, screen all future residents over the age of 18, screen all contractors, collect W-4s from all hires and file 1099s, change the locks between residents and the list goes on. Solid business practices will build that fortress you are looking for.

Before you start complaining about the expense of insurance just remember you were considering paying an extra $1,000 to $2,000 a year to have a business in two states.

Good asset planning starts with your attorney and insurance agent. Don't have either one PM me for a referral. Just remember your cousin/brother-in-law the attorney, who practices divorce law or speeding tickets, is not the attorney you want for asset and estate planning.

If you did buy an LLC at a seminar and they set up your tax ID, look at the form that you received from the IRS. That response to an SS-4 tells you when the first tax return is due, EVEN if you didn't make any money.

Good Luck and Good Investing!

George

Brent Charles · Answer

Hi George,

Thank you very much for the insight and the details. You must be a gifted mind reader because it sounds as though you know of the journey I've been on down to the weekend seminars. I'll reach out regarding the referrals.

Thanks again George.

Brent

Brent Charles · Answer

Thank you Melody. I appreciate the advice. I will look Mark up.

Melody Dawson · Answer

My suggestion is to look up Mark Kohler and LLC on YouTube and get educated. He is a lawyer and answers lots of legal questions without expecting you to buy a bunch of LLC's in multiple states like some do.

Best of luck