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Ask HN: What's the cheapest way to maintain a corporation?

9 points by uptownhr ↗ HN
End to end, from Filing entity, keeping up with franchise taxes and tax filings.

If you wanted to form an entity for the purposes of limiting your personal liability, what is the cheapest Corporation stack available to create and maintain a corporation, year over year?

13 comments

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giantg2
I use an LLC. The complexity and cost vary from state to state. For me, it cost about $300 to set up, and about $70 every 10 years to maintain. As a single member LLC, you can even file the taxes under your own return.
jtchang
Which state do you use?
giantg2
I'm in PA. It does get more expensive if you're doing an out of state LLC due to registered agent options. It can also make things like taxes and certain business licenses more difficult - basically doing paperwork for both the registered state and your operating state while knowing the laws for both.
xyzzy21
LLC is cheapest but sometimes it's not good enough - it's pass-through for taxes which means your personal taxes are impacted by business profits. You may need to have more tax assistance because this - YMMV of course. The "file the taxes under your own return" is a double-edged sword. I've been burned in the past on this.

I've created LLCs in the past but my next company is starting as a C-corporaion just to avoid the tax entanglements since I already need the same tax people either way, so why not take the added advantages and greater protection.

Where you start your LLC matters a lot. E.g. CA is one of the worst - you have to pay minimum tax at founding and then every year: $800+ last time I formed one. NY was far easier - there's a minimum annual but then no minimum tax so no revenue no tax.

giantg2
The biggest tax issue for me (which is basically unavoidable) is that it's considered self employment, so it's subject to those fun taxes.
uptownhr
Where did you incorporate? I live in cali and llc or not the $800 minimum that goes to the tax board is bonkers.

Outside of dollar cost, what is involved in doing the paperwork every year?

wsh
If you’re in California, it’s difficult to avoid the state’s $800 annual minimum tax, regardless of where the entity is formed or who does the initial or ongoing paperwork.

Even if a corporation or LLC is organized in Delaware or another state, if it does business or has employees in California, it has to register with California and pay the tax, which in some situations is waived for the first year.

Spooky23
Probably a domestic LLC in your state.

Usually the costs for registration of a foreign entity are the same or more, so you pay twice.

If you’re registering a Delaware company for a particular reason, that reason makes cost irrelevant.