HACKER Q&A
📣 move_the_sun

Best state for starting a small hardware business (LLC)?


Hi all,

I've been looking into this for a while now but all the information online is divisive or an advertisement for one online registration service or another. I am trying to start a company providing a niche hardware product, which I expect to sell about 10 of in my first year at a price of $50,000 to $100,000 each.

I am interested in raising capital but not in the near future. In the near term, I would like to optimize for tax savings. Additionally, I don't know exactly where I am going to set up shop in the long run.

Does anyone know if it is okay to incorporate in a state other than where you are going to run a business, if your business involves hardware? And if so, which state offers the greatest advantage to someone who is not immediately taking venture capital?

  👤 taxman22 Accepted Answer ✓
If you form an LLC outside the state you run the business, then you’ll also need to register it in your home state where you run the business. This just adds overhead, fees, etc… it’s probably best to form in your home state.

Some choose to register in Delaware to make it easier to convert to a Delaware Corporation in the future. If you live in California, you’d still need to register the LLC in California and may all taxes and fees to California.