ICIncorporate Counsel

Step 1

Where should the company exist on paper?

Formation state controls your filing fee, annual upkeep, how public your ownership is, and which courts decide a dispute. It does not let you skip taxes in the state where you actually work — you foreign-qualify there and pay anyway.

StateLLC filing feeYearly upkeepFranchise taxOwnership privacyBest for
Wyoming$100 (online $102)$60 minimum annual report license tax (based on in-state assets) + registered agentNone (annual report license tax instead)Members and managers are not listed in the public filing.Solo owners, real-estate holding companies, bootstrapped online businesses.
Delaware$110 minimum$300 LLC franchise tax, or corporate franchise tax from $175 + $50 annual reportYes — flat $300 for LLCs; assumed-par-value or authorized-shares method for corporationsMembers/managers not listed for LLCs; corporations list directors on the annual report.Startups raising priced rounds, multi-party joint ventures, companies planning an exit.
Nevada$425 total to start ($75 articles + $150 initial list + $200 state business license)$350/yr for LLCs ($150 annual list + $200 business license), $650+/yr for corporationsNo franchise tax; the state business license fee functions similarlyManagers/managing members appear on the annual list; beneficial owners can be shielded.Owners who prioritize asset protection and privacy and can absorb higher annual fees.
Texas$300No annual report fee; franchise tax report required (no tax due below the revenue threshold)Yes — margin tax, but no tax due under roughly $2.47M in annualized revenue (threshold is indexed)Governing persons (managers/members or directors) are disclosed in public filings.Companies with Texas customers, employees, property, or a physical location.
Florida$125 ($100 filing + $25 registered agent designation)$138.75 LLC annual report ($150 for corporations), due by May 1No franchise taxManagers, members, and officers are published in the public record.Florida residents, service businesses, short-term rental and property owners in-state.
New Mexico$50$0 for LLCs — no annual report required (registered agent fee only)Corporations owe a franchise tax; LLCs taxed as partnerships generally do notNo member or manager names in the public filing, and no annual report to refresh them.Privacy-focused solo owners and passive holding entities with tight budgets.

Fees change. Confirm the current amount on the state's own page before filing — every state card links straight to it.

Wyoming

The low-cost privacy favorite for small LLCs.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: Online filings often same day to 2 business days

Pros

  • Cheapest realistic total cost of ownership among the popular states
  • Strong anonymity — no member/manager names in the public record
  • No state income tax and no franchise tax on ordinary operating LLCs
  • Strong charging-order protection, including for single-member LLCs

Cons

  • Very little corporate case law, so novel disputes are less predictable
  • Institutional VCs rarely fund a Wyoming LLC without a Delaware conversion
  • If you actually operate elsewhere you still must foreign-qualify and pay that state
  • Privacy is not absolute — federal beneficial-ownership reporting still applies where required
Wyoming Secretary of State — Business Center Business name search File an LLC online

Delaware

The default for venture-funded startups and complex ownership.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: Standard 1-3 weeks; 24-hour, same-day, and 1-hour expedited options available for a fee

Pros

  • Court of Chancery and mature case law make outcomes predictable
  • Investors, banks, and acquirers already know the documents
  • Series LLCs and flexible LLC contract terms are well supported
  • Fast expedited filings when a deal is on a clock

Cons

  • Highest ongoing cost of the popular states for a small business
  • $300 LLC franchise tax is due whether or not you made money
  • Corporate franchise tax can surprise you if you authorize a lot of shares
  • You still register and pay tax in the state where you actually operate
Delaware Division of Corporations Entity name availability search How to form a new business entity

Nevada

Strong liability shield and privacy, at a real price.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: Online filings 1-2 business days; expedited options available

Pros

  • No state income tax and no information-sharing agreement with the IRS
  • Strong statutory protection for directors and officers
  • Good charging-order protection and established asset-protection reputation
  • Business court docket for commercial disputes

Cons

  • Among the most expensive states to maintain year after year
  • Annual list discloses managers or managing members
  • The tax savings usually vanish if you operate in a taxed state anyway
  • Marketed heavily by incorporation mills; the benefits are often oversold
Nevada SilverFlume business portal Business entity search Secretary of State — start a business

Texas

Best when Texas is where you actually do business.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: SOSDirect online filings typically 1-3 business days

Pros

  • No personal income tax and a large, business-friendly economy
  • New Texas Business Court adds specialized commercial adjudication
  • No annual report fee — only the franchise tax report
  • Avoids the cost and hassle of foreign-qualifying if you operate in Texas

Cons

  • $300 formation fee is high relative to Wyoming or New Mexico
  • Public disclosure of governing persons — little privacy
  • Franchise tax reporting obligation every year even when no tax is owed
  • Some local jurisdictions add their own permits and gross-receipts style fees
Texas Secretary of State — business filings SOSDirect filing system Taxable entity search / name search

Florida

Cheap to start, easy to run, if you are based there.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: Sunbiz online filings often 2-5 business days

Pros

  • Low startup cost and a genuinely simple online filing system (Sunbiz)
  • No personal income tax
  • No franchise tax and a modest flat annual report fee
  • Excellent for real property and service businesses physically in Florida

Cons

  • Essentially no privacy — ownership and management are public
  • $400 late fee if the annual report misses the May 1 deadline
  • C corporations owe 5.5% Florida corporate income tax
  • Weaker asset-protection reputation than Wyoming or Nevada for single-member LLCs
Sunbiz — Florida Division of Corporations Search Florida business records Start an LLC online

New Mexico

The quiet option: anonymous LLCs with no annual report.

Full walkthrough
Low cost
Privacy
Investor fit

Speed: Online filings typically 1-3 business days

Pros

  • Lowest filing fee among the popular states at $50
  • No annual report and no annual state fee for LLCs — lowest maintenance anywhere
  • Anonymous ownership: no members or managers in the public record
  • Attractive for a passive parent or IP-holding entity

Cons

  • Thin case law and little name recognition with banks and investors
  • Not investor-friendly — expect to convert before a priced round
  • New Mexico gross receipts tax if you actually sell into the state
  • Corporations face franchise tax and more reporting than LLCs
New Mexico Secretary of State — Business Services Corporations and Business Services online filing Business name search

Not sure which one is yours?

Answer eleven questions and the AI recommender will pick a state and entity type, show the runner-up, and estimate your first-year cost.

Run the recommender