Did you know that you don’t have to register your limited liability company (LLC) in your home state? Instead, you can file in one of the states below, and save considerably on fees and state income taxes.

There are also advantages to keeping all the paperwork close to home. Before you decide which way to go, check out these pros and cons.

Benefits of Filing in Your Home State

For those who have a brick and mortar location and conduct most or all of their business in the state where they live, convenience will probably be a major consideration. It’s easier to do business when all your customers, suppliers, contacts, and government offices are near at hand.

When you form the LLC in any state other than your home state, you must register as a foreign LLC — requiring a fee and extra paperwork you would avoid by filing at home.

Another added expense involved in an out-of-state LLC is that you must hire a registered agent to represent your company and accept the service of process in the state where your LLC is registered.

Benefits of Filing in a Business-Friendly State

If your business does not have a set location, for example, a consultancy, the convenience of home filing may not be that significant for you.

Income taxes and business fees can be thousands of dollars less than those in your home state. And there are other factors which may swing the convenience vote in their favor, too.

Here’s a run-down of each state’s advantages.

Delaware

The most well-known business-friendly state offers:

• Simple filing process, so you can start doing business quickly

• No tax on out-of-state income, a huge deal if most of your business happens in other states

• Low filing fees and franchise taxes

• A separate court for business cases (Chancery Court), so your case will get resolved faster, and you’ll be heard by judges experienced in business law

Nevada

In addition to being a great state for combining business with pleasure, Nevada offers:

• Fairly fast filing times

• No tax on business income, capital gains or inheritances

• No franchise tax (there are fees for business licenses and annual filing)

• No requirement to create an operating agreement or hold annual company meetings

• No information-sharing agreement with the IRS (if privacy or anonymity is your priority)

• Not much state disclosure required either, allowing LLC owners to file public documents anonymously

Wyoming

A relative newcomer to the business advantage arena, Wyoming is now an equally good choice, offering:

• No business income tax

• No franchise tax

• Lifetime proxy — you appoint a permanent representative for your company stock and votes while you remain anonymous

If you don’t already know your home state’s tax rates, business fees, and red tape hassles, do some research. Then see how they compare to the 3 most popular states for LLC registrations. You may not have known these options existed, but one of them could be the perfect choice for your company.