I live in NY but want to start an LLC for a small online business. I keep reading that Connecticut is easier/cheaper for formation. Can I actually form a CT LLC while being a NY resident? What are the catch-22s?
LLC Formation
Can I form a Connecticut LLC while living in New York?
You can form an LLC in any state regardless of where you live. The issue is you'll likely need a registered agent with a CT address, and you may also have to register as a foreign entity in NY since you operate from there.
The 'cheaper' part is misleading. CT has an annual report fee, and if you're doing business in NY, you'll pay NY fees too. Double the paperwork.
What kind of online business? If it's purely digital and you have no physical presence in CT, you might not even need to register there. But then why CT?
I looked into this last year. The CT annual report is $80, due by March 31. NY LLC publication requirement can cost hundreds but only if you register in NY. If you form in CT and don't register in NY, you might be fine until you get caught. Not advice, just what I found.
You'll also need a CT registered agent, which is an extra cost. And if you ever get sued, jurisdiction could be a mess.
Just form in NY. The publication requirement is annoying but at least you're not dealing with two states.
Actually, NY publication requirement only applies to LLCs formed in NY, not foreign LLCs. But foreign LLCs still have to register and pay fees. It's not a free pass.
If you're the only member, maybe consider a sole prop until you're sure. Less overhead.
So the consensus seems to be it's allowed but probably not worth it if I'm operating from NY. I'll look more into the foreign registration part. Thanks for the reality check.