The Honest Truth
For most small businesses, your home state is the best place to form your LLC.
Here is why. If you form in a different state but do business in your home state, you will need to register as a foreign entity in your home state anyway.
That means paying fees in two states instead of one. Plus two registered agents, two annual reports, and double the paperwork.
The popular states like Delaware and Wyoming make sense for specific situations. Let us look at when each option is the best choice.
Side-by-Side Comparison
| Feature | Delaware | Wyoming | Nevada | Home State |
|---|---|---|---|---|
| Filing Fee | $90 | $100 | $75+ | Varies ($50-$500) |
| Annual Fee | $300 | $60 | $150+ | Varies |
| State Income Tax | None (for out-of-state LLCs) | None | None | Usually applies |
| Privacy | Good | Excellent | Good | Varies |
| Court System | Specialized (Court of Chancery) | Standard | Business-friendly | Standard |
| Annual Report | Not required for LLCs | Required ($60) | Required ($150) | Usually required |
| Foreign Qualification Needed? | Yes, if operating elsewhere | Yes, if operating elsewhere | Yes, if operating elsewhere | No |
When to Choose Each State
Choose Delaware if...
You are raising venture capital, planning to go public, or want access to the specialized Court of Chancery. Most Fortune 500 companies are incorporated in Delaware.
Choose Wyoming if...
You want maximum privacy, low fees, no state income tax, and strong asset protection. Wyoming is affordable and business-friendly.
Choose Nevada if...
You are already in Nevada or want no state income tax with solid privacy protections. Note: Nevada is more expensive than Wyoming.
Choose your home state if...
You are a small to mid-size business operating primarily in your home state. This is the simplest and often cheapest option.
Do Not Forget the Hidden Costs
Forming in another state adds costs that people often overlook:
Compare all state fees on our filing fees comparison page.