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Incorporating A Company In Different States Then Current Risidence?

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Hello,

So, I'm looking into doing this for our group, to start an LLC, however I'm not sure how to proceed.

I am currently in TX for a job, but  my primary residence, and wjhere I dod most of my work, was in CA.

 

I'd prefer to set up the LLC under CA law, but don't know for sure when I'll be back there.

 

My prospective business partner lives in LA, between these 3 stated, CA seems to be the best in understanding game dev startups.

 

Is it possible to manage, form, and base an LLC from where I am.

TX isn't as palpable to tech companies as CA of of course.

 

Any help in navigating this would be helpful.

 

 

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TX isn't as palpable to tech companies as CA of of course.


Really? I have heard a lot lately that California is comparatively unfriendly to businesses.
Anyway, for your questions, you should consult a professional.

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You will need to talk to a business lawyer for some details, but as I understand it, you can set it up anywhere you have a legal presence.

 

If your business partner living in LA has LA meaning Los Angeles instead of LA meaning Louisiana, then set him as the legal contact in California.  If LA means Louisiana then you'll need a legal contact in California.  Some lawyers are willing to serve as the legal contact for a relatively small fee.

 

 

As for which state is more friendly to business, I'd guess Texas is the better option. Texas has a $40 annual fee, California is $800 annually plus another $20 every other year.  Laws tend to favor businesses in Texas and many IP laws tend to originate out of Texas because the judges tend to fit the "trespassers will be shot" model rather than the "lets all share and get along" model.

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It (and much more) is very possible in some way or form, like for example State of Delaware has over 50% of Fortune 500 just incorporated in it (and almost 300k businesses in this one building: https://en.wikipedia.org/wiki/Corporation_Trust_Center_(CT_Corporation) ) but for concrete details and options you should consult someone who deals with corporation law.

Edited by FRex

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Long story short, you need to read the statutes of the state you're looking to incorporate in. As you will probably want a lawyer to do a once-over of any incorporation documents in the first place, it's probably best to figure it out with them right off the bat.

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Well, a legal body is in the federal state of things all equal, but practical things very depend on where you base it, this will be the state/district with the first judges/judge that will aprove of any of the company more legal moves (selling a share, appointing a CEO, etc.) . Berous differ, payments differ.

 

I cannot speak from my experience as to what state to recommend, but the reccomendations that you have heard here I would take as very very advicing. 

 

And I gues, it is very unwanted to not have the issues get handled by first level judgement, (in case you do not accept decision, etc.).

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Ok so to answer your first question. I haven't looked specifically into the California requirements, but it shouldn't really be a problem to incorporate in California because most states have pretty similar requirements.  All you need is a physical address, an agent who can receive mail for you, and to file to proper paper work.  Please note that if a registered agent receives a legal notices (like a court summons) it is considered proper service, and the Cali court will have jurisdiction over you. 

So as far as Texas goes, its actually pretty tech company friendly. Like Frob said there are fee with each state.  And if you think that Cali is more tech friendly because of Silicone valley, think again.  Almost all of those companies are incorporated in Delaware.   So why is Delaware so popular?  Well the short answer is that it is popular because everyone uses it.  That seems redundant but its not.  

When investors are looking at companies they like familiarity. Since so many companies incorporate in Delaware the laws and limitations are pretty well known. Also people know what to expect from the special Delaware business law court. So when a company is incorporated in Delaware it makes an investor more comfortable because they are familiar with it. 

If you are leaving Texas you should probably just use Cali. If you are going to be in Texas for almost the whole project what I would recommend is look at the incorporation fees and state business taxes for both California and Texas. Whichever state charges you less over all, use that one. 

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Well, a legal body is in the federal state of things all equal, but practical things very depend on where you base it, this will be the state/district with the first judges/judge that will aprove of any of the company more legal moves (selling a share, appointing a CEO, etc.) . Berous differ, payments differ.

 

I cannot speak from my experience as to what state to recommend, but the reccomendations that you have heard here I would take as very very advicing. 

 

And I gues, it is very unwanted to not have the issues get handled by first level judgement, (in case you do not accept decision, etc.).

What? States and judges don't get involved in company decisions and the things you listed don't require outside approval.

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Well, a legal body is in the federal state of things all equal, but practical things very depend on where you base it, this will be the state/district with the first judges/judge that will aprove of any of the company more legal moves (selling a share, appointing a CEO, etc.) . Berous differ, payments differ.

 

I cannot speak from my experience as to what state to recommend, but the reccomendations that you have heard here I would take as very very advicing. 

 

And I gues, it is very unwanted to not have the issues get handled by first level judgement, (in case you do not accept decision, etc.).

What? States and judges don't get involved in company decisions and the things you listed don't require outside approval.

 

Yeah I would ignore JohnnyCode's statement Promit. There are a lot of things wrong with it. 

 

GeneralJist one thing I forgot to mention in my last comment is that forming an LLC is usually considered super simple, formation wise. If you wanted to form a partnership or corporation i would suggest you use a lawyer, but for just an LLC you can use legalzoom or something cheap and should be just fine.  That won't tell you which state is best but it is relatively cheap. 

Edited by N1njaSt0rm

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Well,

We're forming an LLC partnership.

 

IDK how much longer I'll be here in Texas, and when I'll go back to CA, all depends on my day job...

So encase I move, I'm trying to figure what's what.

 

The other option is to file in Louisiana, where my Artist partner is, I'm rather sure he won't be moving any time soon, and if he did, he'd be moving to TX, given his family ties.

 

Doing it in LA would then be on him, and he'd need to do all the paperwork, which I don't imagine him wanting to bother with.

 

Still looking into options.

Edited by GeneralJist

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