Foreign LLC vs Domestic LLC - Wyoming & South Carolina


4

Please help. I'll make this as simple and concise as possible:

I will be manufacturing my own parts, AT HOME, in South Carolina. I intend to sell the products exclusively online with an online storefront. I will be shipping them from SC.

I am considering getting a Wyoming LLC because of the lack of business tax, lack of an annual licensing fee, free certificates of good standing, legal protection due to anonymity, etc.

My bank accounts will most likely be located in South Carolina. Perhaps if I located them in Wyoming this would circumvent legalities that profile where the 'majority of a business is located' based on transactions?

Is this legal since I am not physically conducting any business in SC; merely manufacturing parts? What are the pros/cons of this method?

Thank you!

Getting Started Ecommerce LLC Legal Business

asked Mar 23 '13 at 00:41
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George
21 points
Top digital marketing agency for SEO, content marketing, and PR: Demand Roll
  • you're manufacturing in and shipping parts from SC. as the other answers state, this would be conducting business in SC. – Jberger 7 years ago

2 Answers


1

If you are manufacturing parts in SC and shipping parts from SC, it sure sounds like you're going to be conducting business in SC. So, you'll have to register as a foreign LLC and do things like pay taxes, etc.... And that just about eliminates any benefit you'd have from being a Wyoming LLC.

I'm not familiar with either SC or Wyoming LLC law -- there may be reasons to choose one over the other. But, in general, trying to avoid taxes in your home state isn't going to work.

answered Mar 23 '13 at 01:01
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Chris Fulmer
2,849 points
  • in addition, the source of the income is from the `part` which is changing ownership more or less when you ship the `part` (from SC). you'd probably have to ship the `part` from a facility in WY to be WY-source income. – Jberger 7 years ago

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I am considering getting a Wyoming LLC because of the lack of business
tax, lack of an annual licensing fee, free certificates of good
standing, legal protection due to anonymity, etc.

Nothing of this will help you. Since you're operating in SC - you'll have to register in SC. So whatever benefits you think you'd be getting from registering in Wyoming - they're all moot, because you're still going to register in SC as well. It will just cost you more (registered agent in WY, maintaining address there, filing whatever paperwork they require to maintain status, etc).

Is this legal since I am not physically conducting any business in SC;
merely manufacturing parts? What are the pros/cons of this method?

From what you wrote, your whole business is in SC. What's "merely manufacturing parts", and how it is not "conducting any business"?
answered Mar 23 '13 at 05:09
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Littleadv
5,090 points
  • This is actually not true. If you look at the SC SOS, you will see: 88 http://sc.gov/pages/external.aspx?http://www.sos.sc.gov/Business_Filings Basically, you just need to register to do business, but you can setup a foreign entity in WY, as long as you comply with the law there. (Usually around nexus and tax) – Madd Hacker 7 years ago
  • @MaddHacker so what is not true? Isn't it what I said? You can setup in WY, but you will still register in SC, so why bother with WY? – Littleadv 7 years ago
  • => there is a difference between registering your business and registering TO DO business. What the page says is that if you're a foreign entity, you must register that you are doing business, not that you must register there. Think about companies like Google or Amazon. They are multi-national and multi-state, but they still have 1 single state they register in, then each other state treats them like a foreign entity. There are subtle but key differences in the laws governing this (also dependent on the state). – Madd Hacker 7 years ago
  • @MaddHacker again, that's what I said. You're arguing about semantics. BTW: Amazon and Google are CORPORATIONS. PUBLIC, even. I'm not sure you're aware of the difference. The OP asked about LLC. It is not the same. Just to make sure you stay on topic. That said, you're just parroting what I said - so I ask you again: what is not true? – Littleadv 7 years ago

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