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03 - Accounting & Taxes Accounting Help & Tax Strategies

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Old 06-17-2008, 11:34 PM
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Default Start-up Help please


I am currently located in Massachusetts and planning to start my home based business to provide the following web related services in Massachusetts, New Hampshire, New York and New Jersey.
• Web site design and development
• Web hosting
• Software as a service
• IT Consulting (as independent contractor)
Not planning to hire fulltime employees for atleast couple years.

Could you please advice on the following?

Should I register a LLC or DBA?
Is there any Tax benefit for registering in Delaware or Nevada?
If I register in Delaware, do I need to register a Foreign Limited Liability Company in MA, NH, NY and NJ for the above type of business I am planning?

Thank you.
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Old 06-18-2008, 01:08 AM
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1) Where will you be physically doing the business. Register in that state. Also, unless you plan on doing business in those states specifically, there is no need to register.

2) LLC or DBA taxation is the same, just whether you want legal protection. LLC is registered with the Secretary of State's office (or Commonwealth). Usually best to do it in the state your business is located out of. You WOULD need to register as a foreign LLC in the states you do business in if you got another state (such as DE or NV) involved. So you may end up paying more in taxes that way just in fees.

4) Are you going to have random clients in these places, or are you physically going to be advertising there and have offices?
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Old 06-18-2008, 11:31 PM
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Thank you Evan, appreciate your response.
4. Yes, I will be providing web development services to clients in NH, NJ and NY. The development work will be done remotely from my home office in MA. I am not going to advertise or have offices in NH, NJ and NY.

In this scenario, considering I am registering my LLC in MA, am I required to register Foreign LLC in NH, NJ and NY?

Best Regards.
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Old 06-20-2008, 04:44 PM
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I'll be curious to see this answer too as my business is in a similar situation. My business is based out of Kansas and we recently landed a deal to make a website for a client in Ohio. I called the OH secretary of state office and they said we would need to register as a foreign corporation. That wouldn't be so bad except we have to pay a fee to file the form ($125) AND get a registered agent in the state.

Doing business in more than a handful of states could get expensive.
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Old 06-27-2008, 01:17 AM
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You may want to check the laws of those states. That becomes a legal issue.

I'm tempted to say no because you do not have a physical presence in that state and aren't doing business in that state, it's all being done online. Your physical business is in your home in MA. I'd say you're safe following that general strategy. Of course a state may have a law which differs from that.

There are many companies that do business online and are only registered in the states they have a physical presence. But the question becomes the volume of business you're doing. In any case, consult with a lawyer for legal advice.
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Old 06-27-2008, 04:33 PM
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I found some more information on this topic.

I looks like congress tried to stop states from taxing businesses without an in-state employee or other physical presence.

Unfortunately, the bill never passed:
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Old 07-08-2008, 09:35 PM
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Here's your answer for NY...

They even give a link to their opinion on what consitutes "doing business in NY".

Hope that helps...

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Old 08-17-2008, 11:04 AM
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if you are starting a new venture. there is not much of difference in different types of company formations. i would advice you if you are starting alone, more or less like freelancer then dont go for any registrations at the start, if you want to form a company then LLC is a better option
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Old 02-23-2013, 04:30 AM
adrian_in9@yaho adrian_in9@yaho is offline
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Join Date: Oct 2007
Posts: 316
Default Re:

In managed hosting services the organization leases the whole server for the business specific purpose, which provides them the facility to manage certain elements of the server, together with the ability to manage the applications, hardware and also the software system that accompanies the server.

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