I run a small online store selling handmade candles and soaps. Last year I read a bunch of blog posts saying that registering my LLC in Wyoming was the best move for privacy and taxes. So I did it, even though I live and operate in California. Now I'm second-guessing myself because I just got a notice about foreign qualification fees in CA, and it seems like I'm paying double. Did I mess up? Should I have just registered in my home state? Any advice would be appreciated.
Business Strategy
I chose a state based on online advice and now have doubts
Ugh, those blogs are everywhere. Wyoming is great if you actually live there or have a real reason. For a small candle business? You probably drank the Kool-Aid. Foreign qualification is a pain.
Oh no, not another Wyoming victim. Welcome to the club. Next you'll be telling us you bought a course on dropshipping.
Hey, I'm in Wyoming and I can tell you the privacy thing is overblown for most small businesses. Unless you're a celebrity or hiding from someone, it's not worth the hassle. Have you talked to a CPA about the tax implications? Because CA is aggressive.
I sell candles too! I just registered in my home home state. Way less headache. Sorry OP, but you might want to dissolve the WY LLC and start fresh in CA. Might be cheaper in the long run.
Dissolving isn't always cheap either. You still have to pay fees and file final returns. But yeah, probably better than paying $800/yr to CA for nothing.
Actually, Wyoming has no state income tax, which can be beneficial if you're not physically operating there., But since you're in CA, you likely have to pay CA taxes anyway on income earned there. The main benefit of WY is privacy and asset protection, but for a small e-commerce business, it's often unnecessary. I'd recommend consulting with a tax professional to evaluate your specific situation.
TheConsultant, you sound like one of those blogs. OP, don't lIsten to generic advice. Get a local CPA.
I agree with Sue. TheConsultant gave a decent overview, but every situation is different. Also, consider the cost of maintaining a registered agent in WY. It adds up.
If you do dissolve, make sure you file all the final reports. I've heard horror stories of people getting fined for not closing properly.
Thanks everyone. I think I'll look into dissolving and registering in CA. Lesson learned: don't trust random blogs.