Business owners often tend to guess and find out which US state is the most business-friendly.
In this article we’re going to share some common knowledge of most popular and widely used states for LLC creation.
One of the main premises you should remember when forming an LLC is to know where you are located and where you plan to do business. This is important in order to avoid double taxation.
So, without further ado, let’s start and find out which TOP-5 states in USA are the best to start your business considering costs and other aspects.
1. Michigan
Michigan is a low-cost state that provides a Limited Liability Company structure and is also an excellent place to start a business. It is not subject to double taxation. Furthermore, the profits from the LLC business will be taxed directly on the owner’s tax return. In short, paying a single tax responsibility will assist the business in increasing funds for continued operation.
If you do decide to form an LLC in this state, it is necessary to know its fees. The Michigan LLC cost is $50, with a $25 annual obligation. This is just for filing the Articles of Organization. There are other associated costs you’ll need to know, but forming an LLC in this state is still relatively affordable as compared to other states.
2. Montana
In Montana, the cost of forming a Limited Liability Company is $70. It has a low filing fee and an annual payment of only $20; despite being a low-cost state, it is still regarded as one of the best places to form an LLC due to the submission method. People can submit their organization’s certificate online, which is more convenient and saves money on transportation.
3. Utah
This state has a 0% corporate tax rate and a 0% individual income tax rate. It is advantageous for people who want to start a Limited Liability Company because the responsibility of every business is to pay tax. With 0%, business owners can see it as an opportunity to save more money. Furthermore, the filing fee for an LLC in Utah is $70, with an annual payment of $20.
4. Wyoming
In Wyoming, the cost of forming a Limited Liability Company begins at $100. The annual payment must be at least $50. More so, Wyoming does not have a personal income tax.
In short, the LLC cost in this particular estate is relatively low, and it is still regarded as a good location for the business.
5. California
It isn’t one the cheapest states, but it’s definitely one the most popular ones. It’s no secret that California is the wealthiest state in US, so it tends to attract a lot of new businesses. The LLC set up costs are $70 and annual fee is a whopping $800 in California.
So if you’re planning to start an LLC in California – don’t forget that it’s full of opportunities, but it’s annual maintenance costs are relatively high as well.
Conclusion
Choosing an LLC is always a good choice when planning to start a business. It’s very flexible, tax-friendly and relatively cheap compared to other legal forms of business in USA. However, if you don’t know how to set up an LLC yourself, it is highly advisable to use an LLC formation service (for example Zenbusiness) – which will form an LLC for you for a very attractive price and with a quick TAT.
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