Have business plans for over a year or two out, however, would like to establish the LLC now and have it sit idle until needed.

  • What characteristics should be selected for creating the LLC at this time?
  • Any difference (advantages/disadvantages) in fees or taxes?
  • If this is a terrible idea, why?

The LLC will be under just myself at this time, in the US (Washington or CA).

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    Why do you need an LLC? – D Stanley Aug 23 '19 at 23:54
  • @d-stanley: is there a better way to separate and protect personal assets when the business starts ? As for starting it early, that's this question. – Greg McNulty Aug 24 '19 at 4:16
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    @GregMcNulty -- this is oversimplified, but you can protect personal assets with insurance. The form of doing business (LLC, sole proprietorship, etc.) is mostly about taxes. – Pete Becker Aug 24 '19 at 12:33
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    @PeteBecker LLC doesn't really mean anything to the IRS, it's really just for protecting personal assets. To the IRS an LLC can be a sole-proprietorship, partnership, or corporation (S or C). – Hart CO Aug 24 '19 at 16:17
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    What will your business do? Do you intend to take on investors? – Hart CO Aug 24 '19 at 16:20

Having shell companies is a privileged situation for anyone perceptive enough to maintain one.

Your non-operating LLC is a good step in that direction. There are annual fees.

The primary advantage is that you can put the LLC's name on pretty much any asset or property or bank account or payment, and most people won't know it has anything to do with you. Some people might look it up, and if you want to further raise the bar of how few of those some people could ever figure it out, there are lots of things you can do with an LLC.

Finally, there are several tax statuses that the LLC can choose to have, some of which are permanent. As such, people don't want their personal body tied to a parallel tax code, but can easily spin up a new copy of their efforts via an LLC or other business entity type, where all the transactions to it are tied and taxed under that parallel tax regime.

Lots of other little perks. But you can direct anything through the LLC before you get to other your business idea.

If you aren't doing anything with it, why register it in Washington state? Use one of the states that offer more privacy, I know of at least 55 US semi-sovereign jurisdictions that offer LLCs, all with slightly different perks, mostly related to security, privacy, cost and speed. Big catalogue between every state, territory, district, even Navajo Nation has LLC statutes. Which one you want? Who knows. I like Wyoming.

  • what would be a good tax status to choose in this case. Once the business starts, will there be headaches if it is a "foreign LLC" registered in a different state than doing business? thanks. – Greg McNulty Aug 24 '19 at 4:20
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    @GregMcNulty You should probably ask that to whatever lawyer you are planning to employ to help start the LLC. – Money Ann Aug 24 '19 at 19:17
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    @GregMcNulty asking if u need to do a foreign LLC registration is like asking a barber if you need a haircut, they'll always say yes. The consequences can guide your decisions. The real answer is that 1st, businesses w/o tangible products and physical locations typically don't need to register where you physically r (according to the state's statutes, which you need to check), 2nd the state often lacks resources to investigate this, 3rd the state often has negligible consequences when they do notice this (such as retroactive limited liability, which is the same as not foreign registering ever) – CQM Aug 24 '19 at 20:38

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