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Virtual Consulting Business: Question about State of Incorporation?

by RS, Window Shopper

  • Created: August 20, 2009, 4:32 pm
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Hello, I'm seeking advice on starting an online services business.

 

Question: What state should I incorporate my virtual consulting business (no brick & mortar office) in?  

 

Background of company: I am looking to establish an LLC for a virtual consulting business for academic admissions consultancy. All communications with clients will be online or over the phone.

 

The four founding members of the LLC are based in MA for the next few months, but will then move to different states. I'd like to open a bank account for the LLC in MA, and have a MA address for receiving any hard mail. I anticipate that clients will be from around the country and world. We plan to engage consultants as Independent Contractors around the country to work with clients (again, through online/telephone services).

 

Issue: If I register my virtual company as an LLC in Del. due to lower initial filing fees ($90)/annual fees ($250), will I have to file as a foreign entity ($500 initial and annual fees) in MA? Will I be considered to be 'transacting business' in MA if the founding members are currently located in the state, the bank account will be in the state, and if we retain a mailing address in the state?

 

Thank you for your help!

Tags: Discuss Popular Topics, Starting & Registering a Business
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ChristineL | Former Moderator | 8/21/2009 - 4:28 pm

Hi RS, Our Massachusetts Small Business Guide and our Delaware Small Business Guide are great resources to look into when determining the legal structure of your business and operation specifics. If you haven’t already, check out our online business page to learn more about starting your own virtual services business. Delaware has special online tax laws that you might want to take into consideration. For more specific information about taxes in Massachusetts and Delaware, you can look here. To find out more about business laws and regulatory compliance for particular states, you can also look into guidelines for small businesses. You may want to check use our Permit Me tool for more information about licenses and permits that you need to apply to for Massachusetts and Delaware. If anyone has additional information, feel free to share! Message Edited by Christine_Lai on 08-21-2009 04:30 PM