Which state should I form my LLC in?
Short answer: form in the state where you'll be doing business. For most people, that's their home state.
The internet is full of advice telling you to form in Delaware, Nevada, or Wyoming "to save on taxes." For most small businesses, that advice is wrong. Here's why and when it actually applies.
Why form in your home state?
If you live in California and form an LLC in Delaware:
You still owe California's $800/year franchise tax because you're doing business there.
You now ALSO need to register as a "foreign LLC" in California (~$70 + $20/year), file a fictitious-name registration, and maintain a registered agent in BOTH states.
Your liability protection covers you in both states, but you've paid double the fees for no extra benefit.
The "save on taxes" pitch only works if you actually move operations to the lower-tax state. Filing paperwork in Delaware doesn't relocate your business.
When does it actually make sense to form elsewhere?
Wyoming
You're a real-estate investor with properties in multiple states (and a Wyoming LLC umbrella).
You're an online business with no physical office, no employees, and high privacy concerns.
You want anonymity — Wyoming allows nominee members.
Delaware
You're seeking venture capital. VCs almost universally require a Delaware C-Corp (not an LLC). If you're forming an LLC, Delaware adds bureaucracy without VC-readiness benefits.
You're a multi-member LLC with sophisticated operating-agreement needs — Delaware Chancery Court has the most developed LLC case law.
Nevada
Rarely the right choice in 2026. Originally pitched as "no state income tax," but Nevada has high franchise fees ($350-500/year) that erase the savings for small businesses.
Common mistakes
❌ Forming in Wyoming for "asset protection" when you live in a community-property state — your spouse can still pierce the veil.
❌ Forming in Delaware because "that's where big companies form" — those companies are C-Corps, not LLCs, and they have lawyers handling the foreign-qualification dance.
❌ Forming in Texas to avoid state income tax, then operating in California where you still owe $800/year franchise tax.
How FormationHub helps
We file in any of the 50 states + DC. State fees vary widely:
Cheapest: Kentucky ($40), Arkansas ($45), Mississippi ($50)
Most expensive: Massachusetts ($500), Tennessee ($300 + annual fees), Illinois ($150)
Our service fee is the same regardless of state. Pick the state that fits your business, not the cheapest filing fee — the $400 you save in year 1 on state fees can be eaten by foreign-qualification fees if you choose wrong.
Next steps
Ready to form? https://www.formationhub.com/
Not sure which state? Open a chat and tell us where you operate — we'll give you a recommendation in under 5 minutes.