The honest answer for most people is the state you already live and work in. Here is why, and when the exceptions actually apply.
Start here: the foreign qualification trap
The advice to form in Wyoming or Delaware is everywhere, and for most people it is wrong. If you form an LLC in Wyoming but live and operate in California, California still considers you to be doing business there. You must register as a foreign entity in California, which means:
- Two filing fees instead of one
- Two annual reports instead of one
- Two registered agents instead of one
- California's franchise tax regardless
The out-of-state LLC did not save you anything. It roughly doubled your ongoing cost and added a filing you can forget and get dissolved over.
Form in your home state unless you have a specific reason not to.
When another state is genuinely right
Wyoming — $100 to file, $60 a year
No state income tax. Members are not listed in the public record. Strong charging-order protection, meaning a creditor who wins a judgment against you personally generally cannot seize the LLC itself or force a sale of its assets.
Use it when: you are forming a holding company for real estate or investments, you genuinely operate from no single state, or privacy of ownership is a real requirement rather than a preference.
Delaware — $90 to file
The Court of Chancery and a century of corporate case law. Institutional investors expect it, and some term sheets require it.
Use it when: you are raising venture capital, or expect to. Otherwise you are paying for a courtroom you will never enter and a franchise tax you did not need.
New Mexico — $50 to file, no annual report at all
The cheapest ongoing option in the country. No annual report means nothing to forget. Members are not public.
Use it when: you want low cost and privacy without Wyoming's annual report, and you are not operating from another state.
Nevada — $75 to file
No state income tax and historically marketed hard on privacy. Ongoing costs are higher than Wyoming once business licence fees are counted.
Use it when: you actually operate in Nevada. Otherwise Wyoming does the same job cheaper.
The expensive states, so you are not surprised
Filing fees range from $40 in Kentucky to $500 in Massachusetts. Tennessee and Texas are $300. Washington and New York are $200. None of this is our fee — we pass state fees through at cost — but it is worth knowing before you choose, because the first-year difference between the cheapest and most expensive state is more than our service fee.
Privacy, stated accurately
In Wyoming and New Mexico, members are not in the public record. In many other states the organiser or members appear in a searchable state database for anyone to find.
A registered agent address or privacy address keeps your home address off the public filing. It does not make you anonymous. Courts, the IRS and state agencies can still identify and reach you, and we comply with lawful orders. Anyone selling true anonymity is describing something they cannot deliver.
You can change your mind later
None of this is permanent. You can form in one state and later register in another, redomesticate to a different state, or dissolve and reform. It costs filing fees and some paperwork, but choosing imperfectly now is not a trap.