Hi. Lee Phillips here. I'm an attorney-- and like I always say, don't hold that against me.
What I want to talk about with you for two seconds is
Where are you going to form your corporation or your LLC -- your company?
and I run into this all the time.
People attend seminars and you got to have it in Nevada
you gotta have it New Mexico that's the new one
you gotta have it in Colorado or Wyoming
Wyoming is where LLC's were created so you might as well have it in the hometown.
Where do you form your LLC or your corporation?
Never sucker for the Wyoming the Colorado the New Mexico the Utah or anyplace else.
Let me tell you why.
Because no matter where you create your company
Oh Nevada has more privacy I forgot about that
Nevada doesn't have any taxes
Well actually they do have corporate LLC taxes now,
some anyway
let's see
oh I don't know why you should form your corporation LLC in these other states
but they all have a good reason.
Here's the problem.
You form your LLC your corporation in Nevada.
Fine. You got a Nevada corporation.
what you're doing is you're paying your 350 bucks a year or whatever it is in Nevada
plus
the state that you actually file in
you need a registered agent.
Now that could be you
if you happen to be a resident of that state
or it could be the office
where you actually have a business.
It has to be someplace where the sheriff can show up,
give you service
and say you're sued
and that's all it has to be.
But if you own a rental unit in Tennessee
and that's all you have in Tennessee
you know what, that could be the address.
Because the funny thing is, who's going to be suing you? It's the tenant.
If the tenant gets service he might forget to give you the service, don't you think?
So you have to have a registered agent
and so this whole industry has grown up
--started in Nevada--
where you have registered agents.
They promote the state for some reason.
There's a big group going around now saying you should have your LLC in Utah
and they only charge you $8000 and you get five LLC's.
One, Utah's one of the poorer states in the Union to have your LLC
and I'm from Utah, I know that.
Why would you do it?
Because they say you should, that's why.
As soon as you incorporate or put your LLC in one of these other states
so you have your LLC in Nevada
and then you have your rental unit or your company in Florida.
Well you're gonna have to register that Nevada company in Florida
and you're gonna have to pay all of Florida's fees
you're gonna be subject to all Florida's laws.
They're never gonna sue you in Nevada.
The tenant that's in the unit in Florida is always gonna sue you in Florida
they got you in Florida
and guess what guys
if you don't register in Florida I ain't gonna pay my rent
and there's nothing you can do about it
because as a Nevada company, a Nevada LLC or corporation
you have no legal standing--no rights in Florida
you're not a resident of Florida
and you can't foreclose on the tenant in Florida
you can't collect on the tenant in Florida
you can't sue the tenant in Florida
you can't do anything
you have no rights in that state.
So you have to register in the state.
It's just as expensive to register in the state
as if you originally formed your LLC or your corporation in Florida
and you still do have to have a registered agent
but you probably live in Florida,
so you can be the registered agent.
And you don't have to pay the guy his $500 in Nevada every year
or his $1500 or his $5000, or whatever it is.
They have a registered...you know, you can get the big package.
and so
as soon as you register in Florida you're subject to all Florida's laws
I don't care if you have "privacy" in Nevada
oh you know the registered agent can actually own the corporation in Nevada.
Guess what?
When that registered agent actually owns the corporation in Nevada
they own the corporation.
And I've seen several cases where the company was going good
and they decided, "Yeah we own this company. We like it."
You don't own the company.
You have no rights to the company. They own it.
Oh that's the ultimate privacy, isn't it.
So, now let me let me think again.
No taxes Nevada, that's right.
But wait wait a minute wait a minute.
If you're collecting the rent or you're selling the widgets
in Florida or Tennessee or New York or wherever it is
Guess what?
That's where you pay the taxes.
I don't care about Nevada. Yeah, I have to file a Nevada tax return
but all the taxes are gonna be paid in the state where you are doing business
or where the rental unit is, the property is,
that's where you pay the taxes.
I could care less about Nevada.
They don't have to come to Nevada to sue you.
You pay the taxes in the other state.
Now exactly why did we incorporate in Nevada?
I don't know.
Now I'll give it to you, 50 years ago when I first started out
Nevada had some pretty good laws and you could take advantage of some of the Nevada stuff.
But everybody else in the nation has pretty much caught up with them
and there's no use going to Nevada
to even do business because it's almost as good to do business in Florida
and why go to all expense of going to Nevada
and and by the way there's some cute little bippies.
If you are in California, for example
and you have your company in Nevada and you own your...
well, you don't even have to own a rental unit in Florida you don't have to own anything in Florida.
If you have your company in Nevada
it does all of its business in Nevada
makes all of its money in Nevada
has nothing to do with California, guess what?
California law says if you own more than 25 percent of that company
you have to register it in California and pay the 850 bucks a year and everything else
because the sheer fact that you are an owner of the company means that you are a California citizen
and that company is now doing business in California
and if you don't pay the $850 year fee,
they have a $3,000 fee penalty that they catch up with you on.
And they get it because you get a K-1 from this company that's in Nevada.
The sheer fact that you own it, you register in California.
So why did I ever do anything in a state
where I one, don't own property,
or two, don't do business?
There is absolutely no reason.
It's a scam.
Would you like me to sugarcoat it for you now or tell it to you bluntly?
Don't.
This is Lee Phillips.
Where are you going to put your corporation your LLC?
In the state where you're doing business or where you own the property.