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  1. #1
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    Default Things Needed to Maintain Corp

    My question involves business law in the state of: Wyoming
    I live in California where it's cost prohibitive to start a corporation. Want to incorporate in Wyoming to protect from potential lawsuits regarding short film release on YouTube and Amazon. That's it!
    So I file with the state, I get a registered agent, I start up a bank account and capitalize the company (with I don't know how much money), and what else do I need initially? Do I need an answering service or can I use my home phone in Cali or can I at least just have a voicemail service in Wyoming? Anything else?
    Also Corp, S-Corp or LLC?

  2. #2
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Andy_Rooney
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    My question involves business law in the state of: Wyoming
    I live in California where it's cost prohibitive to start a corporation. Want to incorporate in Wyoming to protect from potential lawsuits regarding short film release on YouTube and Amazon. That's it!
    So I file with the state, I get a registered agent, I start up a bank account and capitalize the company (with I don't know how much money), and what else do I need initially? Do I need an answering service or can I use my home phone in Cali or can I at least just have a voicemail service in Wyoming? Anything else?
    Also Corp, S-Corp or LLC?
    First, understand that if you organize the business entity in Wyoming but conduct the business in one or more other states then you need to register that entity as a foreign business entity in each of the states it does business. Foreign in this case refers to any entity that was organized outside that state. This matters because if you are managing the business from your home in California, which you may do, California is going to require you to register that business entity in California anyway and you'll be subject to the state franchise tax and other fees just as if you had organized it in California to begin with. So organizing it in Wyoming may not result in the savings you anticipate; indeed, you'd end up paying fees to two states rather than one. A lot of people misunderstand this; they think that because big corporations organize in places like Delaware and Wyoming that it must be the best place for their small business to organize, too. But unless you actually do business in those states, it is likely not a good choice for the reasons I just explained. The reasons why big companies organize in those states is because it offers the management of those companies advantages versus their public shareholders that other states do not provide. Small business entities do not have that concern because management and shareholders are the same people. In short, for most small businesses it does not make sense to organize in any state in which the company will not be conducting business.

    Second, while limited liability entities like corporations and LLCs do protect you from being liable for the debts of the entity just because you own the business, they do not protect you from liability for your own acts while running the business. So, for example, if you are negligent while running the business and someone gets injured as a result, both you and the business entity would be liable for that. Corporations, LLCs, LLPs, etc, are useful, but make sure you understand that they don't protect you from everything and that you get proper insurance and take other steps to protect yourself from those things that limited liability entities don't cover.

    As for what kind of business entity you should use, there is not enough information here to make that determination. That will depend on the details of your planned business and your own personal circumstances. I recommend you see both a business attorney and a tax attorney or other tax professional familiar with business taxation for advice. The business attorney can advise you regarding how to set up the corporation and whether organizing it in some state other than California would do you any good. The tax attorney/tax professional can tell you which business set up will be most tax efficient for you.

  3. #3
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Taxing Matters
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    First, understand that if you organize the business entity in Wyoming but conduct the business in one or more other states then you need to register that entity as a foreign business entity in each of the states it does business. Foreign in this case refers to any entity that was organized outside that state. This matters because if you are managing the business from your home in California, which you may do, California is going to require you to register that business entity in California anyway and you'll be subject to the state franchise tax and other fees just as if you had organized it in California to begin with.
    YouTube and Amazon Prime each pay peanuts so I'm not worried about paying additional taxes. YouTube pays about $2,000 if you get a million views. Very few videos ever get a million views. How much would the California fees to "register" be? Something nominal like $50? I'm trying to avoid the $800 incorporation fee.
    Second, while limited liability entities like corporations and LLCs do protect you from being liable for the debts of the entity just because you own the business, they do not protect you from liability for your own acts while running the business. So, for example, if you are negligent while running the business and someone gets injured as a result,
    I'm not going to have any employees. I'm releasing a digital video on YouTube and Amazon video direct. That means YouTube ad revenue and Amazon royalties.
    Also the only "conducting of business" will be me setting up a YouTube page, uploading the video, then watching revenue pour in. Same with Amazon. Upload video, then hopefully watch revenue pour in. There is no physical product, no warehouse, no employees, no rented office space, etc.

  4. #4
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Andy_Rooney
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    YouTube and Amazon Prime each pay peanuts so I'm not worried about paying additional taxes. YouTube pays about $2,000 if you get a million views. Very few videos ever get a million views. How much would the California fees to "register" be? Something nominal like $50? I'm trying to avoid the $800 incorporation fee.
    I think you mean the $800 minimum annual California franchise tax. And you can't avoid that by forming the business entity in Wyoming (or some other state) if you manage the business in California. Managing the business in that state is doing business in that state, and you'll have to register the Wyoming entity as a foreign entity in California and you'll be subject to the same registration fees and taxes. The states long ago got wise to the idea of people trying to avoid state taxes and fees simply by organizing their business entities in some other state and enacted laws that effectively put a stop to that.

    Quote Quoting Andy_Rooney
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    I'm not going to have any employees. I'm releasing a digital video on YouTube and Amazon video direct. That means YouTube ad revenue and Amazon royalties. Also the only "conducting of business" will be me setting up a YouTube page, uploading the video, then watching revenue pour in. Same with Amazon. Upload video, then hopefully watch revenue pour in. There is no physical product, no warehouse, no employees, no rented office space, etc.
    Your business will have at least one employee: you. No corporation or LLC can do anything on its own; it's just a piece of a paper. It needs a person to carry out the various things the business does. You will be creating videos, uploading them, managing the YouTube and Amazon pages, dealing with any issues with YouTube and Amazon, keeping the books and records for the business, doing the tax returns and annual reports for the business, etc. All of that is business activity for the business and is conducted where you are located. Since you live in California and presumably will be doing the management of the business from home, that means the business is doing business in California and will be subject to the state franchise tax and will have to register as a foreign entity in California.

    I know you'd like to avoid that $800 franchise tax and other fees of California. But to do that, you'll need to relocate outside of that state. Simply organizing the business in Wyoming while you stay in California won't work.


  5. #5
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Andy_Rooney
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    what else do I need initially?
    This question calls for legal advice. Please read the disclaimer at the bottom of the page.


    Quote Quoting Andy_Rooney
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    Do I need an answering service
    For what?


    Quote Quoting Andy_Rooney
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    can I use my home phone in Cali or can I at least just have a voicemail service in Wyoming?
    I have no reason to believe you lack the ability to do these things.


    Quote Quoting Andy_Rooney
    View Post
    Also Corp, S-Corp or LLC?
    Complete sentences work best.

    Given that you clearly don't know what you're doing, you would be well-advised to consult with a local business attorney. Be aware that any cost saving that you might realize by incorporating in a state in which you apparently intend to conduct no business is likely to be quickly eaten away by the costs associated with registering your foreign corporation in California and paying corporate maintenance fees (and possibly taxes) in both states.

    My guess -- and it's only a guess -- is that there is no good reason for you to form a corporation or LLC. But again, I suggest you consult with a local attorney.

  6. #6
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    Default Re: Things Needed to Maintain Corp

    I have no reason to believe you lack the ability to do these things. Complete sentences work best.
    You sir are a troll. Typical smart ass lawyer.

  7. #7
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Andy_Rooney
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    You sir are a troll. Typical smart ass lawyer.
    He may be a smart ass lawyer. But he isn't a troll.

    He also usually uses proper English. And he gave you some good advice.

  8. #8
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting Andy_Rooney
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    You sir are a troll. Typical smart ass lawyer.
    Better to be a smart ass than a dumbass, which is exactly the sort of person who would focus on this sort of thing to the exclusion of everything else.

  9. #9
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting PayrolGuy
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    He may be a smart ass lawyer. But he isn't a troll.

    He also usually uses proper English. And he gave you some good advice.
    Most of his posts are about grammatically correct English rather than about the law the OPs are asking about. If he had any incite into what was being asked (and I assume he does) he would just answer the question. But he get his jollies by demeaning people for their use of the language.

    That is his thing. Go figure.

  10. #10
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    Default Re: Things Needed to Maintain Corp

    Quote Quoting budwad
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    Most of his posts are about grammatically correct English rather than about the law the OPs are asking about. If he had any incite into what was being asked (and I assume he does) he would just answer the question. But he get his jollies by demeaning people for their use of the language.

    That is his thing. Go figure.
    And I didn't even use improper English -- It was Internet shorthand. pg1067 had a hissy fit over something trivial. pg1067 is all disgruntled because he spent a fortune to get a law degree only to find out that he can't get a job so he hangs out in a self-help forum to try to insult people. BTW go to any other forum about various other topics and trades and you will find people volunteering their time to truly help people DIY. For example I have done lots of electrical work myself with help from electricians in DIY forums.

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