Dissolving an LLC and forming one w/ the same name

[Pipan]

What is the name of your state? Texas

Hello

I registered my first business in March 2018 in Wyoming, while I am a resident of Texas. The business did not operate in Wyoming or anywhere else, and as a result it did not make any money, but obviously I had to pay for some branding and registration fees. Soon, I am going to start operating in Texas, and I have concluded that there was no good reason for me to register it in WY. Now I need to register in Texas.

I do not think I want to register the existing company in TX as a foreign entity since 1) in TX registering a domestic business costs $300, while a foreign business $700!!. I am thinking about registering a company with the SAME name in TX, and then dissolving the one in WY, which saves me $400, and 2) I do not have to pay and submit the annual fees and report to WY for years without operating there.

I do not think Domestication option to transfer the company from WY to TX is going to cost less or be easier than forming new LLC.

Please let me know if you think what I am thinking is correct.

Thank you
Pipan

 

[Zigner]

You ought to consult with an expert in these matters.

 

[Taxing Matters]

What is the name of your state? Texas
Please let me know if you think what I am thinking is correct.
Pipan

In general if the Wyoming LLC didn't do anything, has no assets, and if you have no need to continue the Wyoming LLC for any reason then you are correct that the most simple and cost effective thing to do is terminate the Wyoming LLC and start a fresh LLC in Texas to begin your business. You have found out what I tell clients: in most cases it does not make any sense to form a corporation or LLC in some state other than a state in which the entity will actually conduct business. People get caught up in the idea that they ought to form their business entity in states like Delaware, Nevada, Wyoming, or Colorado because large corporations do it, and they think if the big guys do it that must be the way to go. But the reasons big publicly traded corporations do it are things that do not concern small privately held companies. If Texas is where you do business then in most cases, that is the best state in which to organize your business entity. There are some exceptions to that, but it's a good general rule of thumb to use. I suggest you consult a business attorney and a tax attorney for advice on the best type of entity to use and where it should be organized to really get it right since the best set up will depend greatly on the details of your business.

 

[quincy]

What is the name of your state? Texas

Hello

I registered my first business in March 2018 in Wyoming, while I am a resident of Texas. The business did not operate in Wyoming or anywhere else, and as a result it did not make any money, but obviously I had to pay for some branding and registration fees. Soon, I am going to start operating in Texas, and I have concluded that there was no good reason for me to register it in WY. Now I need to register in Texas.

I do not think I want to register the existing company in TX as a foreign entity since 1) in TX registering a domestic business costs $300, while a foreign business $700!!. I am thinking about registering a company with the SAME name in TX, and then dissolving the one in WY, which saves me $400, and 2) I do not have to pay and submit the annual fees and report to WY for years without operating there.

I do not think Domestication option to transfer the company from WY to TX is going to cost less or be easier than forming new LLC.

Please let me know if you think what I am thinking is correct.

Thank you
Pipan

Your idea to dissolve your Wyoming LLC and start anew in Texas makes sense.

Make sure that your business name does not conflict with the name of any other existing business.

 

[Pipan]

You ought to consult with an expert in these matters.

Thank you Zigner. Do you think this is a complicated situation that you think I need to consult with an expert?

 

[Pipan]

Your idea to dissolve your Wyoming LLC and start anew in Texas makes sense.

Make sure that your business name does not conflict with the name of any other existing business.

Thank you Quincy.

 

[Pipan]

In general if the Wyoming LLC didn't do anything, has no assets, and if you have no need to continue the Wyoming LLC for any reason then you are correct that the most simple and cost effective thing to do is terminate the Wyoming LLC and start a fresh LLC in Texas to begin your business. You have found out what I tell clients: in most cases it does not make any sense to form a corporation or LLC in some state other than a state in which the entity will actually conduct business. People get caught up in the idea that they ought to form their business entity in states like Delaware, Nevada, Wyoming, or Colorado because large corporations do it, and they think if the big guys do it that must be the way to go. But the reasons big publicly traded corporations do it are things that do not concern small privately held companies. If Texas is where you do business then in most cases, that is the best state in which to organize your business entity. There are some exceptions to that, but it's a good general rule of thumb to use. I suggest you consult a business attorney and a tax attorney for advice on the best type of entity to use and where it should be organized to really get it right since the best set up will depend greatly on the details of your business.

Thank you.

 

[quincy]

Thank you Quincy.

You're welcome, Pipan. We appreciate the thanks.

It should not be too difficult to dissolve your Wyoming LLC and start a new business in Texas, based on what you have described of your LLC in Wyoming.

It can be a good idea for anyone to consult with a professional when starting a new business. It is not a necessity.

Good luck.

 

[Zigner]

Thank you Zigner. Do you think this is a complicated situation that you think I need to consult with an expert?

I do think that it would be wise to consult with both tax and legal professional regarding your matter. That's not to say that it's overly complicated, but it's always wise in your type of situation.

 

[Pipan]

I do think that it would be wise to consult with both tax and legal professional regarding your matter. That's not to say that it's overly complicated, but it's always wise in your type of situation.

I agree. Thanks.

 

[quincy]

I wish you success with your new business.

 

[Pipan]

I wish you success with your new business.

Thank you.