So I run a tiny handmade soap business out of my garage. Last month I registered an LLC in Wyoming because everyone said it's cheap and privacy-friendly. I live in Ohio. Now I've got a registered agent, a foreign qualification, a separate annual report, and possibly a franchise tax I didn't know about. My filing folder went from a dozen pages to a binder. Is this normal or did I overcomplicate? I'm tempted to just dissolve and start over at home.
Registration
Registering outside my home state created more paperwork than expected
If you’re running the soap operation from Ohio, then Ohio is your home state for doing business purposes. Registering in Wyoming first was like getting a library card in a town you’ve never visited.
“Privacy-friendly” usually just means the filing doesn’t show your address, but the registered agent gets maiil there anyway. Did you at least get a shiny certificate?
Wyoming is popular for holding companies and asset protection scenarios. A garage soap business with actual customers in Ohio? Different story. You may also be on the hook for the Wyoming annual report annd license tax regardless of being based elsewhere. Double-check what the registered agent is required to collect.
Yeah the annual report is what surprised me. I thought I’d pay one fee and forget it. The registered agent has been helpful at least, but every email adds a new form.
I did the same thing with my Etsy store. Wyoming LLC, I live in California. The first year was fine. Then I got a letter from California about foreign qualification and a $800 minimum franchise tax. That was a fun Tuesday.
Could you just operate as a sole prop and avoid the whole mess?Soap from your garage doesn’t exactly scream liability exposure, unless you’re making lye-heavy batches and selling to strangers.
An LLC isn’t a get-out-of-jail card for fraudulent or negligent activity anyway. The entity is useful for certain contracts and branding, but people oversell the “protection” angle.
I’m leaning toward dissolving the Wyoming entity and refiling at home. The paperwork savings aren’t worth the extra headache. Though now I’m worried dissolving mid-year creates even more forms.
Dissolving will absolutely generate a few more forms. But it’s probably less ongoing than maintaining both states. Check if Wyoming requires a tax clearance before you can close