Magnify Your Wealth

Where Should You Form Your LLC? Home State vs. Nevada, Wyoming, and Delaware

Episode Summary

Should you form your LLC in your home state—or in a “preferred” state like Nevada, Wyoming, or Delaware?

Episode Notes

The right state of incorporation can mean the difference between strategic protection and unintended legal risk. This episode breaks down where business owners should form their LLC or corporation to optimize for privacy, asset protection, and compliance—while avoiding costly missteps like tax evasion or improper structuring.

Quote

“Most of the time, you’re going to be formed in your home state or wherever the work is getting done. And as appropriate, you’ll use Nevada and Wyoming as privacy companies to shield ownership or to hold wealth over there.” – Aaron

Highlights

• Is Delaware really the best state to incorporate? Learn why it’s ideal for public companies—but likely overkill for small business owners.
• Wyoming or Nevada: What’s the deal? Discover how these states offer privacy protections and tax benefits when used strategically—not deceptively.
• Where are you actually doing business? Find out why the state where work is performed typically must be your official jurisdiction—and how ignoring this can lead to noncompliance.
• Don’t get burned by “offshore thinking.” Misusing out-of-state entities to dodge taxes could lead to serious penalties; learn how to stay smart and legal.
• The power of multi-state strategy. Hear how Aaron structures businesses across state lines to maximize tax advantages while staying fully compliant.

Key Concepts

• Home State Incorporation: Forming your business in the state where you physically conduct operations, ensuring compliance with local laws.
• Preferred States: States like Delaware (public market-friendly), Nevada, and Wyoming (privacy and asset protection) often used for strategic structuring.
• Privacy Jurisdiction: States that allow anonymity of owners, useful in litigation protection when used in accordance with the law.
• Holding Company: A business entity—often in Nevada or Wyoming—used to hold assets like equipment or intellectual property that are then leased to operating companies.
• Tax Evasion vs Tax Strategy: Illegally dodging taxes by misusing entities is a crime, but legally leveraging different state rules for protection is smart and ethical.

General Notes

This episode clears up one of the most misunderstood issues in business formation: where you should incorporate or organize your entity. While states like Delaware, Nevada, and Wyoming are often marketed as “business-friendly,” the truth is more nuanced. Aaron breaks down why most business owners are best served by incorporating in the state where they operate—and how advanced strategies involving other states can provide privacy, protection, and tax advantages only when done properly. The key is strategic compliance, not clever loopholes.