Seven Best States to Start an LLC in the US


LLC or Limited Liability Company is a business structure, which is a hybrid entity that combines the features of partnerships and corporations. In such a business structure, the company and the owners are separate and the debts and liabilities of the company are not personal liabilities of the owners. The cash flow from the business to the owners is considered as personal income similar to that of partnerships and the liability of the company is limited to the amount invested by the owner, which is similar to the feature of a corporation.

One can start an LLC in any state in the country. To help you decide, here are the seven best states to start an LLC:

  • Texas 

Texas is an attractive place for many investors, especially in the real estate industry. The LLC cost in Texas may be lower compared to other states as you won’t have to worry about the management fees. This will lessen some expenses including the bookkeeping and will allow you to set your budget on other important expenses for your business.

  • Wyoming 

Wyoming is another state that is considered best when you are planning to start an LLC. They are known to be the most affordable among the states in the US. Apart from that, its individual income and business taxes are 0%. They also protect your privacy and have a “lifetime proxy” for anonymity.

  • Nevada 

Nevada is another state that has a 0% corporate and income tax rate, which makes it another business-friendly state. And if you want your business done as quickly as possible, its fast-processing time will make you please as a business owner. Furthermore, Nevada doesn’t require operating agreements or annual meetings.

  • Florida 

In Florida, although annual meetings are still needed, this state requires fewer formalities. Forming an LLC in Florida is also authorized to make subsidiaries without restrictions. They also have no restrictions on the number of members, which makes it easier to manage.

  • Alaska 

Alaska does not require a physical presence rule which can make you avoid double taxation. Its corporate tax rank is 26 and has zero state income and sales tax. These perks make it one of the best states to start an LLC.

  • Delaware 

Another well-known pro-business state is Delaware. Maintaining your legal coverage isn’t as complicated as you might think because they have a good reputation in dealing with business owners. They also offer a simplified filing process to allow you to build your business as quickly as possible.

  • South Dakota 

Last but not the least, South Dakota is another state that offers a lot of advantages when it comes to taxes. It also has no state income and corporate tax. Its energy cost, not to mention the small crime rate makes it a business-friendly state.

While it is possible to form an LLC in a different state, it is still recommended to start within your home state. Apart from having people you can connect with easily, you get to familiarize the process and laws in the state you are in. Eventually, if your business becomes stable, you may plan to work on building businesses in other states apart from your hometown.

Ieva Ofer
the authorIeva Ofer