July 8, 2025 • 29 mins
Mark J Kohler and Mat Sorensen dive deep into the world of LLC registration, revealing must-know strategies for small business owners and real estate investors. Learn how to:
- Properly register your business across state lines
- Protect your assets with the right LLC structure
- Avoid expensive penalties and legal pitfalls
- Maximize tax benefits for multi-state operations
Whether you're a rental property owner, remote business operator, or entrepreneur looking to expand, this episode is your ultimate guide to navigating complex LLC regulations. Don't make expensive mistakes - watch now and save thousands!
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Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are bestselling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:22):
building generational wealth.
Crucial for saving more,stressing less and building
generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:33):
There's a number of problems.
If you don't register in theright state, you will not be
recognized in a court if youneed to sue someone, or you get
sued.
Secondly, most states charge apenalty for failure to register
in the state you're actuallyconducting business in.
Speaker 3 (00:47):
There's over 10 million of you out in the
country that have set up an LLCfor your small business and let
me just say this do not getsucked into the stupid Wyoming
thing, which we love in theright instance, set up in your
state, leave it there, do itright, get it compliant and
don't worry about this otherstate crap it right, get it
(01:07):
compliant and don't worry aboutthis other state crap.
Speaker 2 (01:10):
Welcome everyone to the Main Street Business Podcast
.
This is Matt Sorensen, joinedby the incredible Mark J Kohler.
We're excited to be heretalking about LLCs and what you
should be doing to do it right.
Yeah.
Speaker 3 (01:18):
I mean that one sheet of paper may not be your ticket
out of a lawsuit or an IRSaudit.
There's more to an LLC thanthat little thing you file with
the state, yeah, and what statedo you file it with is
critically important.
Speaker 2 (01:32):
Many of you might be setting up LLCs in a particular
state, but you own real estatein another state or you do
business in multiple states andwe want to talk about when do I
register that LLC into anotherstate?
We'll talk about some of thedrawbacks if you don't do it,
which we're going to say don'tscrew this up.
There's four reasons why youget jacked up if you do this
(01:53):
wrong.
We're going to go over those.
Then also talk about the commonstructures and strategies we
see people use that make sense,on how to register these and
make sure you're protected inthe states you're operating.
Speaker 3 (02:03):
Yeah, and I'm going to say we're going to jump into
it right now.
And, matt, I say we riff, youknow, like a good old guitar
band in the basement.
Let's just go for it.
I'll play a little.
You know string or two here.
Then you play a couple and thepoint is there's a lot to cover
folks in a short time here.
So we're going to jump into itand to cover folks in a short
(02:26):
time here.
So we're going to jump into itand we're going to give you some
resources where you can get aconsultation with a very
affordable little tax law boatteam firm, no matter where
you're at in the country, thatcan help you dial in your
structure affordably.
You may have been doing the DIYmethod of just setting up what
I heard I should do, andGoogling this and Googling that,
(02:47):
and you know better, you knowit's time to get it tidied up.
We'll give you some resources.
All right, I think just as muchas asking when should you
register your LLC in anotherstate is kind of like when
should I not?
And so I'm going to start there, matt, should I not?
And so I'm going to start there.
Matt, I'm going to say most LLCsand I've done the research.
(03:08):
Most LLCs are not to holdrental property.
They're the side gig, sidehustle small business owner that
all they know is.
I got to set up an LLC to startmy business.
So I just want to speak to you.
There's over 10 million of youout in the country that have set
up an LLC for your smallbusiness and let me just say
this Set it up in the statewhere you're doing business.
(03:30):
Do not worry about WyomingNevada, delaware or all that BS.
Set up your LLC and do it right.
That's a whole otherconversation.
But set up that LLC in thestate where you're doing
business and you're only goingto register it in another state
if you go get property there,open a location, get employees
there, go do a major projectthere.
(03:51):
But if you just live inOklahoma and you're going to do
a one-off consultation inAlabama, you don't need to
register in Alabama.
But if you get employees inAlabama, open an office in
Alabama, then we're going tohave to register there.
But for 98% of you smallbusiness owners out there, do
not get sucked into the stupidWyoming thing, which we love in
(04:12):
the right instance, but it's notthe case for the small business
owner with the side gig, sidehustle, trying to build a
business set up in your state.
Leave it there, do it right,get it compliant and don't worry
about this other state crap.
That's my first point.
Speaker 2 (04:27):
Yeah, and I'll say this, no matter what we're
talking about the state you setup the LLC or a state you failed
to register because you'reoperating in multiple states.
You have property in multiplestates.
There's a number of problems ifyou don't register in the right
state.
For example, you will not berecognized in a court if you
need to sue someone or you getsued, that LLC does not exist in
(04:47):
that state.
Secondly, most states charge apenalty for failure to register
in the state you're actuallyconducting business in.
The state of California is $20a day with a maximum penalty of
$10,000.
Most states have that.
So it's not like oh, I justpicked the wrong state.
No, you're supposed to registerin the state that you're
operating at and there's finesand penalties for not doing it.
(05:10):
So I want to make sure you'refocused on getting it right.
But also, why did you set up anLLC in the first place?
Asset protection Am I going toget asset protection if I don't
have an LLC in that state andthe state I'm operating in or I
got a property in?
Something happens, a tenantslips and falls?
I can't rely on my state or myLLC in Wyoming for my rental
(05:30):
property in Oklahoma, getting ajudge in Oklahoma cares.
No, we need that entityregistered into that state or
set up in that state in thefirst place because the asset
protection we're hoping for fromthe LLC we want to ensure that
we get in the state where we'reconducting business, which is
where you're going to bedefending a lawsuit.
Speaker 3 (05:46):
I like that, and I just, of course, went to one
extreme of when you shouldn'teven really worry about another
state.
I'd love your example, matt I'mgoing to use your example, matt
of that rental property.
I don't know why we choseOklahoma today.
Speaker 2 (06:00):
Yeah, Oklahoma, oklahoma, oklahoma, dirty rotten
scoundrels Come on.
Speaker 3 (06:06):
Yeah, yeah, I hear you, steve Martin.
Oh my gosh, here's the thing.
Matt's example is perfect.
When you do need to be worryingabout this most explicitly is
when you're a rental propertyowner.
If I live in California and Ihave a rental property in
Oklahoma, I need to set up myentity in Oklahoma first and
(06:29):
foremost.
Now you might choose to set itup in Wyoming from a more
advanced asset protectionconcept, but then that entity
needs to also be registered inOklahoma.
At the end of the day, whetheryou start the entity in Oklahoma
or start it in Wyoming, it hasgot to be registered in the
state where the rental propertyis, and that, again, is not just
(06:51):
$50 and an online form.
You've got to make sure thatyou've got all the pieces and
parts with your minutes, a goodoperating agreement, a corporate
book, and it has to becoordinated because you're going
to be paying annual fees inWyoming book.
And it has to be coordinatedbecause you're going to be
paying annual fees in Wyoming,annual fees in Oklahoma.
And I hate to say for yourCalifornians, if you're the
(07:12):
manager of that LLC, you alreadyknow the technical rule is you
have to be registered inCalifornia too.
Because they said, if you'rethe manager of an LLC anywhere
in the country you're doingbusiness in California.
Thank you very much, gavinNewsom.
But the point is some states aremore aggressive in making sure
you're registered there.
Other states are not.
And now I know you're out there, throw up your arms and go.
(07:32):
What the hell do I do?
I'll tell you Down in thedescription.
The first call to action isjust get a call with one of our
tax lawyers for one hour.
Now we have a comprehensiveconsult where we build this
kick-ass trifecta and bring itall together.
But just get a call.
Review the tax return.
Yeah, we'll look at tax returns.
We'll bring the whole thingtogether.
(07:52):
Sorry, matt, I'm going on alittle bit, but I know some of
you out there are frustratedgoing.
You know what this is why Idon't deal with it, because it
gets so confusing.
So I just wanted to say we dohave a resource.
It's the first call to actionin the description Get a
consultation.
You will love it.
We will save you more than youpay us guaranteed, yeah.
Speaker 2 (08:14):
And the other thing that comes up let's just stick
on the rental property here.
We'll talk about an operatingbusiness in a second.
But let's say that you did theLLC in Oklahoma for that
Oklahoma rental and then you'rebuying another rental property
and it happens to be in Texas.
Well, can I use that sameOklahoma LLC?
Do I set up a new LLC in Texas?
Well, the first thing you cando is just register that
Oklahoma LLC into Texas.
It's the same LLC, it's stillXYZ Properties LLC.
(08:37):
It's just registered inmultiple states, still one bank
account, right, and so it keepsit simple.
Now, the benefit of that is Ijust have that one LLC.
It's a little cheaper filingfee to just do what's called a
foreign registration.
This is where you take an LLCfrom one state and you say, hey,
I've got an Oklahoma LLCalready, I'm not setting up a
new LLC with you.
Guys Just recognize thisOklahoma LLC to be doing
(08:58):
business in Texas now.
And the state says cool, werecognize you, thank you for the
filing fee.
We're going to charge you anannual fee too, and you need to
have a registered agent here aswell, and we help you with that.
By the way, we have theregistered agent service in all
50 states with our companyMainStreet Business Services, so
we can get you recognized inboth states.
Now the downside to thatapproach is well, I've got two
(09:19):
properties now in the one LLC.
It was easy, I didn't have toset up two LLCs.
But now something goes wrong onone property that could affect
the other and if you have a lotof equity between the properties
, you may not want to keep thesame LLC and have it registered
into multiple states.
You may actually want aseparate LLC in Texas for that
separate Texas rental propertyor portfolio you're doing there,
so you can get separateliability treatment.
Speaker 3 (09:41):
I like it.
Now let's go operational.
Now I'll be transparent.
I'll use an example.
In our organization we do havea few employees working remote
and you as a scaling businessmight just start having other
locations where you may holdmaterials, warehouse materials
(10:03):
or have remote workers in avariety.
Yeah, and when you do that,your company is now doing
business in that state.
So we have an employee thatworks out on the East Coast in
South Carolina, and so we haveto do payroll in South Carolina.
(10:24):
When we do payroll in SouthCarolina, the Secretary of State
and the Department of Taxationout there says whoa, whoa, whoa,
your little firm is now doingbusiness in our state because
you're hiring an employee outhere.
You need to properly issue aW-2 to this employee and this
means you're doing business hereand we are not going to give
(10:46):
you a payroll ID number unlessyou register your entity here.
So we were forced to registerour entity in that state as a
foreign entity, pay the annualfee, keep it in good standing,
and then we could get ourpayroll ID number so that we
could have that employee workingin that state.
Now some of you may go gosh,that's a lot of work to have an
(11:07):
employee over there.
Yeah, I mean, it was a fewhundred bucks to get it
initially going and we've got todo it, but the payroll service
it's an extra hundred bucks ortwo, you know, to issue a W-2 in
another state.
It's not the end of the world.
We may get better talent.
We actually took that employee.
She relocated out east becauseof her husband's employment and
(11:27):
we said we don't want to loseyou, we're willing to pay some
of these extra fees because itcosts us more to retrain and
find another employee of yourcaliber.
And she's been wonderful.
She knows who she is, so Iwon't say her name here, but we
just love her and so that wasworth it.
But we had to register acompany in that state because we
had a remote worker.
Speaker 2 (11:48):
Yeah, and I think the general rule of thumb for the
operational business is you knowyou have an employee in that
state.
You obviously open an office,like Mark said, you're storing
assets there, equipment orinventory.
States can be like, hey, youneed to register here that LLC
again, this is just a foreignregistration for the operational
businesses, not too complicated.
(12:08):
There's some annual fees andstuff that you'll get sucked
into there and some reporting,but not too significant.
And obviously if you're acompany going into multiple
states you should have somebodyon your team, whether it's a
controller, accountant or CFO orsomeone that can manage this
for you.
But the action of just meetinga customer, holding meetings in
(12:34):
other states, even getting salesout of other states, that
doesn't mean you've got to goset up and register that entity
foreign into that state.
So don't think just because Igot customers there, I got sales
there, I'm shipping to thatstate, I got to go register that
LLC foreign.
It's more about physicalpresence of your organization,
employees or the company'sassets.
Speaker 3 (12:52):
And we are not talking today about tax issues.
Yes, or sales tax orapportionment, yeah, and when
you're a PGA golfer, you may goto a tournament and you may come
to the waste managementtournament and play in Phoenix,
Arizona in the spring or Ishould say the winter, I think
it was February but you comeplay in the tournament and you
(13:14):
have winnings.
Well, Arizona is going to taxthat because you earned money in
Arizona as a PGA golfer.
Because you earned money inArizona as a PGA golfer, but
from a legal standpoint youweren't doing business there.
It was a one-off experience.
Now, for example, Matt and Iwe're going to speak at multiple
(13:35):
events in the countrythroughout the year.
So if I get called to go speakat a conference in where was I
recently?
Austin, Texas.
Well, I shouldn't use Texasbecause, well, yeah, I'll use
Austin, they don't have a statetax in Texas.
But was I doing business inTexas?
No, I was called in to speak atan event.
It was a de minimis or aone-time or infrequent visit.
I don't have employees there, Idon't have an office there, so
(13:57):
I don't have to register there.
Now, if I was to go camp out inTexas for a month or two, visit
a lot of clients, maybe rent alittle shared corporate space
for 60 days.
Now I'm doing business in Texasand it's gray, but this is what
.
In a consultation with one ofour lawyers, we can help you
(14:19):
identify when you need to go tothat level and when you don't.
Speaker 2 (14:20):
And I think for the operational business generally,
there's hopefully only a fewstates you need to register in
and it doesn't all come at once.
It's not like, oh, I've got togo register in all 50 states and
that's very rare.
You would even see that.
I mean you've got to be a bigmultinational to be stressing
about that.
So I would again just think ofyour physical presence,
(14:40):
employees yourself, equipment.
Again just think of yourphysical presence, employees
yourself, equipment, assets andwhere those are located.
That's generally going to bewhere you need to get registered
.
Just have that on the top ofyour mind.
Where you need to stress aboutthis or not.
Don't worry about the customers, don't worry about the sales,
don't worry about where you'reshipping stuff or where people
are paying you from.
Speaker 3 (14:57):
It's not as much of an issue in terms of it's not an
issue, I should say in terms oflike, where you need to
register your LLC or yourcorporation.
I'm going to again get a littletransparent here and I'd be
interested in what you thinkMatt is.
My wife Patty and I we have boyprobably 20 LLCs for different
(15:18):
reasons operational and holdingreal estate and we have real
estate in probably, let's say,four different states
operational and holding realestate and we have real estate
in probably, let's say, fourdifferent states, maybe five.
Well, it can be a lot to stayorganized, and so I want to give
you all a pro tip.
We have a master spreadsheet inExcel where we have all of our
entities, and we also have aportal at Main Street Business
(15:39):
Services.
Main Street Business Services isa company Matt and I set up 15
years ago to help clients keeptheir address private, because
when you go register in anotherstate, they're going to say who
are you, what's your address?
We've got to have an address andclients will just put their own
address down.
All of a sudden, your homeaddress is out there to the
(15:59):
world, and so we started to say,well, we'll be your registered
agent, we can even be yourcompany address, and we will
track all of these entities foryou when you need to pay your
annual fee and are they in goodstanding, because if you don't
meet and in our calendar weissue every year probably
there's 40 different deadlinesyou know Vermont, you have to
(16:21):
register in December and inCalifornia it's in April, or oh,
it's the day you registeredyour entity in that state.
That's the month every year.
So different states havedifferent rules.
We track all of that for acouple hundred bucks a year.
We have a company complianceprogram.
So for the each entity you'renow in a portal.
We've got them tracked in ourspreadsheet and it saves Patty
(16:43):
and I a lot of time because Idon't want to track that crap.
So Main Street BusinessServices is a great resource if
some of you are looking for that.
Speaker 2 (16:51):
Yeah, I mean that's the thing is, you start growing,
whether it's businesses youhave in different states you're
operating in or you've gotmultiple rental properties or
LLCs, and that's even in onestate.
I mean that can be a lot tomanage and things that.
That's like the last thing youwant to be thinking about.
Did I renew that properly?
Did I get it registered in theright state?
Did I do my minutes?
You know, is my, is my stuffprivate?
(17:13):
If that's something I'mconcerned about, like, what are
my options there?
I mean, that's exactly what MainStreet Business Services does
every day.
We keep it simple for you.
So we just take care of it andtake it off your plate.
Go, focus on making more moneyin your business.
Don't turn yourself into yoursecretary because you don't want
to have someone else do yourLLCs and corporations.
So great tip there.
(17:34):
And, by the way, you can get afree call with the team at
MainStreetBusinesscom.
Go there to book a call withthe team to learn about those
services and how we can takethat off your plate, make sure
it's handled properly and makesure these entities are in good
standing and that assetprotection you're hoping for and
planning for by using LLCsproperly and corporations is
actually going to be there foryou.
You're registered in the rightstates, you're making sure those
(17:55):
are renewed, so you're in goodstanding.
So you get that assetprotection you paid for when you
set that LLC up in the firstplace.
Speaker 3 (18:00):
I'm just going to mention a couple last final pro
tips, if I could.
When you register in anotherstate, there's two things
they're going to ask for thisregistered agent who is going to
in that state receive notice ifsomeone's pissed off, that's
really what a registered agentis Someone's mad, whatever you
(18:22):
got.
A registered agent is Someone'smad whatever you got a rental
property there.
Someone's mad at our employeethere, whatever.
They're going to go to thestate website and look who is
the registered agent that Icontact or serve.
Our service is what is it, Matt?
$150 to be someone's registeredagent $125.
What did we decrease our price?
What the hell?
(18:42):
Maybe I got it wrong.
I'm just joking.
I did 125.
I thought it was 150.
Okay, we'll see.
You guys, you're alreadygetting a deal.
No, so that service we providein all 50 states because it has
to be an address in that state.
So don't get frustrated.
When you go to register foreign, we'll do it for you for a few
(19:03):
hundred bucks.
But if you try to DIY it, whichis fine, they're going to ask
for the registered agent.
You can say hey guys, I don'twant you to register for me, but
will you at least be myregistered agent?
Sure, just get over toMainStreetBusinesscom say I need
you to be my registered agentin Georgia and I just registered
my company there.
Okay, cool.
Second pro tip when you'reregistering in that state,
(19:26):
they're going to need thecompany address.
Now, the company address doesnot have to be in that state,
only the registered agent doesso.
Again, you can use your companyaddress in Arizona if you're
setting up an LLC in Georgiawith your rental property, but
just don't use your home address, please.
Freaking A try to use aninnocuous address.
(19:49):
We have a virtual mailboxservice that's cheaper than any
post office PO box, holy crap.
If any of you haven't been downto the post office and tried to
get a PO box, first of all youhave to give blood in your
firstborn child.
Then it is so freakingexpensive it blows my mind.
We have a virtual mailboxservice where our law firm will
be your address and they got togo through us to find out who
(20:11):
the hell you are.
So that privacy can add a lotof benefits too.
So when you go to the state toregister foreign, you can do it,
go DIY the hell out of it, butjust know we'll be your
registered agent and we can beyour address, so that you have a
little more privacy.
Your name may be out therethat's a whole other strategy
too but at least not youraddress.
Try to be careful with that.
Speaker 2 (20:34):
Yeah.
So there's a lot that can gointo this.
But we don't mean to overwhelmyou, just give you some quick
answers on what you need tostress about, what state you're
in, what not overwhelm you justgive you some quick answers on
what you need to stress aboutwhat state you're in, what not,
and then make sure that you'rebeing actively maintaining that
entity and getting it doneproperly and also knowing the
resources that you have to reachout when you need the expertise
or you want to have someonetake that off the plate for you.
But we have a lot of resources,I'll say, and I think at the
(20:57):
mainstreambusinesscom websitethere's a lot more resources
there and information At KQSLawyers.
Of course there's more.
You can learn too on our teamand how we can help.
Speaker 3 (21:06):
I've got another one that was a common question here.
I think we have two moreminutes.
This is one where people willsay let's say I'm living in
Idaho, we have an office inIdaho, I used to live in Idaho
and we're registered in.
Speaker 2 (21:19):
Idaho with our entity .
There you go.
Yeah, that's right.
Speaker 3 (21:23):
And let's say, matt calls me up and he goes hey, hey
, I got this project down herein Arizona.
It's pretty cool.
It's an operational business.
It could even be maybe it's afix and flip rehab scenario with
a lot of action.
So we're going to need to useour S corporations.
So we would.
We would choose to set up anLLC in Arizona because we're
(21:45):
going to be doing business thereand we want to funnel the
profit through our S-corps.
So that's going to be our taxstrategy.
So we set up our LLC in Arizonabecause we're doing business in
Arizona.
And Matt says well, are yougoing to own this Mark?
And I go, no, I'm not going toown it.
My S corporation is going toown it and Matt's S corporation
(22:06):
is going to own it.
Well, now here's the questionDoes my S corporation in Idaho
have to register in Arizona?
It does not.
It's simply an owner of the LLCin Arizona.
Now, for tax purposes it'spretty kick-ass.
My profit's going to go over tomy S corcorp in Idaho and
(22:28):
that'll save me onself-employment tax.
I will get a K-1 from theoperation in Arizona.
That'll go to my S-corp.
But I don't have to register myS-corp in Arizona because it's
not the one doing business there.
So for some of you that haveLLCs that invest in other LLCs,
just worry about the LLC doingbusiness in that state, not the
(22:51):
LLC that's investing in the LLC.
Speaker 2 (22:53):
Oh, I love that scenario and it made me think of
another one that I've had everyonce in a while comes up, which
is hey, I have real estate in,let's say, colorado and I own
that through an Arizona LLC.
Because I just have thatArizona LLC and it's a cabin or
it's raw land, I don't rent itout, so I'm not in business, do
I need to register in that state?
If you actually don't, moststates will say that
(23:17):
out-of-state entities can ownreal estate in their state
unless those are put intobusiness, for example as a
rental property.
That's short term or long term.
So just keep in mind you canuse an out-of-state entity to
own real estate in another stateand most states don't require
that.
Now, one caveat I've had.
Sorry, I went down the rabbithole on this.
Speaker 3 (23:36):
No, this is great.
Speaker 2 (23:36):
This is good.
One caveat I had on that isthere was a county though that
wouldn't transfer the title andthe title company's like, sorry,
just us does how it works herein this state and these, these
counties is um, they won't letyou transfer if it's an
out-of-state entity you have.
So we had to register thatclient's LLC in there, even
though in this example I can'tremember what it was, if it was
(23:59):
the cabin or the raw land orwhatever it was that wasn't
helped put in, you know, wasn'tin business or conducting
business.
So some states, will, you know,put a their foot down on that,
at least when you're trying totransfer titles.
So just heads up there.
Speaker 3 (24:11):
I like Matt's example , and I want to riff on it for a
minute.
This is kind of where we'relike.
You know, I just take off.
You know, maybe this is thedrum solo portion.
Speaker 2 (24:19):
Yeah, this is the encore too.
We came back on stage, you know, yeah.
Speaker 3 (24:23):
Yeah, okay, now everybody remember what Matt
just his scenario was Lives inArizona, bought a cabin in
Colorado.
And it's funny you say thatbecause we just had some friends
buy a little piece of land inSteamboat and they're building
out a little cabin.
They're not going to rent itout, it's kind of just their own
little personal property, butthey want it in their Arizona
(24:46):
LLC.
Now if the county in Coloradoand Steamboat is cool with it,
you can just transfer the titleinto the LLC.
Don't worry about the bank.
There's not going to be a dueon sale clause.
You're still the underlyingowner of the property if you're
on the mortgage.
But they're not doing business.
So Matt's not worried about theasset protection per se.
Now there's some people wouldargue, well, there could be.
(25:08):
People would argue, well, therecould be a random hunter or
some kids on four-wheelers thatgo in there and screw around on
the property and get hurt.
I'd like my LLC registered inColorado, okay, but you're not
doing business there.
It's more kind of a littleasset protection technique.
Now let's say Matt goes well,I'm going back to Colorado and
I'm going to buy a rentalproperty.
Down the street I saw thisproperty that'd be great for a
(25:32):
short-term rental.
It's down the street from myown cabin so I can kind of check
on it from time to time, maybeeven take some business tax
write-offs to go check on it.
Stay in my own cabin coolwrite-off strategy.
Well, I'm going to set up aColorado LLC for that.
Well, my Arizona LLC is going toown the Colorado LLC, kind of
like that S-corp to Arizona dealwith Matt.
That was operational.
(25:53):
This one's going to be theholding company strategy.
So I'm going to use my ArizonaLLC to really not own anything
directly but just own other LLCsthat own the property directly.
So I do not have to register myArizona LLC in Colorado because
I have a Colorado LLC theredoing the heavy lifting and then
my Arizona LLC is just theowner.
(26:14):
We have many, many clients thatdo that because they want that
double layer of asset protectionand a little more privacy,
because that Colorado LLC is notgoing to have their name
anywhere.
They don't want their addresson it, they don't want their
name on it and they're going touse the Arizona LLC to try to be
the front or the face, andthat's where this Wyoming
strategy comes into.
So that's next level.
(26:35):
But our lawyers can walk youthrough that and keep it really
quite affordable.
Speaker 2 (26:38):
Yeah, and that's that holding company, property
entity holding LLC, property LLCstrategy.
If you're someone that has moresignificant assets or equity in
properties, that's definitelysomething we look at for clients
and, like Mark said, wyomingwould be a popular place to do
the holding company because ofsome privacy stuff that they do
there and some charging orderasset protection that's unique
(27:00):
in that state for single memberLLCs.
Speaker 3 (27:02):
Well, I'm going to take us out with a very special
sound.
This is the sound of opening upsome Fritos bean dip.
If you don't have Fritos andbean dip on a regular basis,
you're missing out on some ofthe most special things in life.
Speaker 2 (27:17):
Oh, that was great.
Speaker 3 (27:18):
Was that nice.
This is my lunch Fritos andbean dip.
Speaker 2 (27:22):
This is an upgrade from your 7-Eleven lunch
yesterday.
Speaker 3 (27:28):
Why don't you tell everyone what you had from
7-Eleven for lunch yesterday?
They have a new egg roll that'sout, you know, and it's on the
little rotisserie.
You know it kind of goes fromstill cooking to cooked and
ready to overcooked.
Do not eat this.
I usually take them from thefront, you know.
That's really.
That's the trick.
That's where you're reallytesting your gastro, you know,
testing of your body to see howold really am I.
(27:51):
Can my body handle this?
I did okay, so you know I'mstill yeah.
Speaker 2 (27:55):
Mark told me about how good this egg roll was from
7-Eleven and I'm like I'm justgoing to take your word for it.
Speaker 3 (28:03):
You can go test it out yourself, you know I would
give it five stars out of five.
Really, wow, that's high praise.
Well, everybody, thank you forbeing here.
We try to keep it light and fun, and you know what the beauty
of the American dream is?
That you get to do business inall 50 states.
You really can.
It's funny.
Years ago I'd meet people whoare like well, I can't buy a
(28:26):
rental, there's nothingavailable in my area, what
You're freaking Southwest flightand a Hampton in a way, from a
killer deal.
You know, get out there and sothe world is your oyster.
My people, that is your.
That's our message today, andit doesn't have to be expensive.
Legally, you can do it.
We've got the resources for you.
Get a call with one of ourlawyers, get all of your
(28:46):
entities on a freakingspreadsheet and over at Main
Street Business Services.
You'll love our new portal.
We'll take care of you, matt.
Speaker 2 (28:52):
Final words yeah, Thanks everyone for tuning in.
If you like the show and you'restill listening, whether you
like egg rolls from 7-Eleven ornot, you know we could give us a
five-star review, a thumbs up.
Please share this podcast withyour friends and family.
We'll up.
Please share this podcast withyour friends and family.
(29:12):
We'll see you next time.
Welcome to the Main Street Business Podcast with
your distinguished hosts, mark JKohler and Matt Sorenson.
Both are bestselling authorsand have over 25 years of
industry experience, with 10,000client consultations, making
them the leading tax and legalexperts in the nation.
Together, they'll unpack themost complex tax, legal and
financial strategies crucial forsaving more, stressing less and
(00:22):
building generational wealth.
Crucial for saving more,stressing less and building
generational wealth.
Today they're your personaladvisors, ready to break it down
for you and make the tax andlegal game easier than ever.
Here is Mark and Matt.
Speaker 2 (00:33):
There's a number of problems.
If you don't register in theright state, you will not be
recognized in a court if youneed to sue someone, or you get
sued.
Secondly, most states charge apenalty for failure to register
in the state you're actuallyconducting business in.
Speaker 3 (00:47):
There's over 10 million of you out in the
country that have set up an LLCfor your small business and let
me just say this do not getsucked into the stupid Wyoming
thing, which we love in theright instance, set up in your
state, leave it there, do itright, get it compliant and
don't worry about this otherstate crap it right, get it
(01:07):
compliant and don't worry aboutthis other state crap.
Speaker 2 (01:10):
Welcome everyone to the Main Street Business Podcast
.
This is Matt Sorensen, joinedby the incredible Mark J Kohler.
We're excited to be heretalking about LLCs and what you
should be doing to do it right.
Yeah.
Speaker 3 (01:18):
I mean that one sheet of paper may not be your ticket
out of a lawsuit or an IRSaudit.
There's more to an LLC thanthat little thing you file with
the state, yeah, and what statedo you file it with is
critically important.
Speaker 2 (01:32):
Many of you might be setting up LLCs in a particular
state, but you own real estatein another state or you do
business in multiple states andwe want to talk about when do I
register that LLC into anotherstate?
We'll talk about some of thedrawbacks if you don't do it,
which we're going to say don'tscrew this up.
There's four reasons why youget jacked up if you do this
(01:53):
wrong.
We're going to go over those.
Then also talk about the commonstructures and strategies we
see people use that make sense,on how to register these and
make sure you're protected inthe states you're operating.
Speaker 3 (02:03):
Yeah, and I'm going to say we're going to jump into
it right now.
And, matt, I say we riff, youknow, like a good old guitar
band in the basement.
Let's just go for it.
I'll play a little.
You know string or two here.
Then you play a couple and thepoint is there's a lot to cover
folks in a short time here.
So we're going to jump into itand to cover folks in a short
(02:26):
time here.
So we're going to jump into itand we're going to give you some
resources where you can get aconsultation with a very
affordable little tax law boatteam firm, no matter where
you're at in the country, thatcan help you dial in your
structure affordably.
You may have been doing the DIYmethod of just setting up what
I heard I should do, andGoogling this and Googling that,
(02:47):
and you know better, you knowit's time to get it tidied up.
We'll give you some resources.
All right, I think just as muchas asking when should you
register your LLC in anotherstate is kind of like when
should I not?
And so I'm going to start there, matt, should I not?
And so I'm going to start there.
Matt, I'm going to say most LLCsand I've done the research.
(03:08):
Most LLCs are not to holdrental property.
They're the side gig, sidehustle small business owner that
all they know is.
I got to set up an LLC to startmy business.
So I just want to speak to you.
There's over 10 million of youout in the country that have set
up an LLC for your smallbusiness and let me just say
this Set it up in the statewhere you're doing business.
(03:30):
Do not worry about WyomingNevada, delaware or all that BS.
Set up your LLC and do it right.
That's a whole otherconversation.
But set up that LLC in thestate where you're doing
business and you're only goingto register it in another state
if you go get property there,open a location, get employees
there, go do a major projectthere.
(03:51):
But if you just live inOklahoma and you're going to do
a one-off consultation inAlabama, you don't need to
register in Alabama.
But if you get employees inAlabama, open an office in
Alabama, then we're going tohave to register there.
But for 98% of you smallbusiness owners out there, do
not get sucked into the stupidWyoming thing, which we love in
(04:12):
the right instance, but it's notthe case for the small business
owner with the side gig, sidehustle, trying to build a
business set up in your state.
Leave it there, do it right,get it compliant and don't worry
about this other state crap.
That's my first point.
Speaker 2 (04:27):
Yeah, and I'll say this, no matter what we're
talking about the state you setup the LLC or a state you failed
to register because you'reoperating in multiple states.
You have property in multiplestates.
There's a number of problems ifyou don't register in the right
state.
For example, you will not berecognized in a court if you
need to sue someone or you getsued, that LLC does not exist in
(04:47):
that state.
Secondly, most states charge apenalty for failure to register
in the state you're actuallyconducting business in.
The state of California is $20a day with a maximum penalty of
$10,000.
Most states have that.
So it's not like oh, I justpicked the wrong state.
No, you're supposed to registerin the state that you're
operating at and there's finesand penalties for not doing it.
(05:10):
So I want to make sure you'refocused on getting it right.
But also, why did you set up anLLC in the first place?
Asset protection Am I going toget asset protection if I don't
have an LLC in that state andthe state I'm operating in or I
got a property in?
Something happens, a tenantslips and falls?
I can't rely on my state or myLLC in Wyoming for my rental
(05:30):
property in Oklahoma, getting ajudge in Oklahoma cares.
No, we need that entityregistered into that state or
set up in that state in thefirst place because the asset
protection we're hoping for fromthe LLC we want to ensure that
we get in the state where we'reconducting business, which is
where you're going to bedefending a lawsuit.
Speaker 3 (05:46):
I like that, and I just, of course, went to one
extreme of when you shouldn'teven really worry about another
state.
I'd love your example, matt I'mgoing to use your example, matt
of that rental property.
I don't know why we choseOklahoma today.
Speaker 2 (06:00):
Yeah, Oklahoma, oklahoma, oklahoma, dirty rotten
scoundrels Come on.
Speaker 3 (06:06):
Yeah, yeah, I hear you, steve Martin.
Oh my gosh, here's the thing.
Matt's example is perfect.
When you do need to be worryingabout this most explicitly is
when you're a rental propertyowner.
If I live in California and Ihave a rental property in
Oklahoma, I need to set up myentity in Oklahoma first and
(06:29):
foremost.
Now you might choose to set itup in Wyoming from a more
advanced asset protectionconcept, but then that entity
needs to also be registered inOklahoma.
At the end of the day, whetheryou start the entity in Oklahoma
or start it in Wyoming, it hasgot to be registered in the
state where the rental propertyis, and that, again, is not just
(06:51):
$50 and an online form.
You've got to make sure thatyou've got all the pieces and
parts with your minutes, a goodoperating agreement, a corporate
book, and it has to becoordinated because you're going
to be paying annual fees inWyoming book.
And it has to be coordinatedbecause you're going to be
paying annual fees in Wyoming,annual fees in Oklahoma.
And I hate to say for yourCalifornians, if you're the
(07:12):
manager of that LLC, you alreadyknow the technical rule is you
have to be registered inCalifornia too.
Because they said, if you'rethe manager of an LLC anywhere
in the country you're doingbusiness in California.
Thank you very much, gavinNewsom.
But the point is some states aremore aggressive in making sure
you're registered there.
Other states are not.
And now I know you're out there, throw up your arms and go.
(07:32):
What the hell do I do?
I'll tell you Down in thedescription.
The first call to action isjust get a call with one of our
tax lawyers for one hour.
Now we have a comprehensiveconsult where we build this
kick-ass trifecta and bring itall together.
But just get a call.
Review the tax return.
Yeah, we'll look at tax returns.
We'll bring the whole thingtogether.
(07:52):
Sorry, matt, I'm going on alittle bit, but I know some of
you out there are frustratedgoing.
You know what this is why Idon't deal with it, because it
gets so confusing.
So I just wanted to say we dohave a resource.
It's the first call to actionin the description Get a
consultation.
You will love it.
We will save you more than youpay us guaranteed, yeah.
Speaker 2 (08:14):
And the other thing that comes up let's just stick
on the rental property here.
We'll talk about an operatingbusiness in a second.
But let's say that you did theLLC in Oklahoma for that
Oklahoma rental and then you'rebuying another rental property
and it happens to be in Texas.
Well, can I use that sameOklahoma LLC?
Do I set up a new LLC in Texas?
Well, the first thing you cando is just register that
Oklahoma LLC into Texas.
It's the same LLC, it's stillXYZ Properties LLC.
(08:37):
It's just registered inmultiple states, still one bank
account, right, and so it keepsit simple.
Now, the benefit of that is Ijust have that one LLC.
It's a little cheaper filingfee to just do what's called a
foreign registration.
This is where you take an LLCfrom one state and you say, hey,
I've got an Oklahoma LLCalready, I'm not setting up a
new LLC with you.
Guys Just recognize thisOklahoma LLC to be doing
(08:58):
business in Texas now.
And the state says cool, werecognize you, thank you for the
filing fee.
We're going to charge you anannual fee too, and you need to
have a registered agent here aswell, and we help you with that.
By the way, we have theregistered agent service in all
50 states with our companyMainStreet Business Services, so
we can get you recognized inboth states.
Now the downside to thatapproach is well, I've got two
(09:19):
properties now in the one LLC.
It was easy, I didn't have toset up two LLCs.
But now something goes wrong onone property that could affect
the other and if you have a lotof equity between the properties
, you may not want to keep thesame LLC and have it registered
into multiple states.
You may actually want aseparate LLC in Texas for that
separate Texas rental propertyor portfolio you're doing there,
so you can get separateliability treatment.
Speaker 3 (09:41):
I like it.
Now let's go operational.
Now I'll be transparent.
I'll use an example.
In our organization we do havea few employees working remote
and you as a scaling businessmight just start having other
locations where you may holdmaterials, warehouse materials
(10:03):
or have remote workers in avariety.
Yeah, and when you do that,your company is now doing
business in that state.
So we have an employee thatworks out on the East Coast in
South Carolina, and so we haveto do payroll in South Carolina.
(10:24):
When we do payroll in SouthCarolina, the Secretary of State
and the Department of Taxationout there says whoa, whoa, whoa,
your little firm is now doingbusiness in our state because
you're hiring an employee outhere.
You need to properly issue aW-2 to this employee and this
means you're doing business hereand we are not going to give
(10:46):
you a payroll ID number unlessyou register your entity here.
So we were forced to registerour entity in that state as a
foreign entity, pay the annualfee, keep it in good standing,
and then we could get ourpayroll ID number so that we
could have that employee workingin that state.
Now some of you may go gosh,that's a lot of work to have an
(11:07):
employee over there.
Yeah, I mean, it was a fewhundred bucks to get it
initially going and we've got todo it, but the payroll service
it's an extra hundred bucks ortwo, you know, to issue a W-2 in
another state.
It's not the end of the world.
We may get better talent.
We actually took that employee.
She relocated out east becauseof her husband's employment and
(11:27):
we said we don't want to loseyou, we're willing to pay some
of these extra fees because itcosts us more to retrain and
find another employee of yourcaliber.
And she's been wonderful.
She knows who she is, so Iwon't say her name here, but we
just love her and so that wasworth it.
But we had to register acompany in that state because we
had a remote worker.
Speaker 2 (11:48):
Yeah, and I think the general rule of thumb for the
operational business is you knowyou have an employee in that
state.
You obviously open an office,like Mark said, you're storing
assets there, equipment orinventory.
States can be like, hey, youneed to register here that LLC
again, this is just a foreignregistration for the operational
businesses, not too complicated.
(12:08):
There's some annual fees andstuff that you'll get sucked
into there and some reporting,but not too significant.
And obviously if you're acompany going into multiple
states you should have somebodyon your team, whether it's a
controller, accountant or CFO orsomeone that can manage this
for you.
But the action of just meetinga customer, holding meetings in
(12:34):
other states, even getting salesout of other states, that
doesn't mean you've got to goset up and register that entity
foreign into that state.
So don't think just because Igot customers there, I got sales
there, I'm shipping to thatstate, I got to go register that
LLC foreign.
It's more about physicalpresence of your organization,
employees or the company'sassets.
Speaker 3 (12:52):
And we are not talking today about tax issues.
Yes, or sales tax orapportionment, yeah, and when
you're a PGA golfer, you may goto a tournament and you may come
to the waste managementtournament and play in Phoenix,
Arizona in the spring or Ishould say the winter, I think
it was February but you comeplay in the tournament and you
(13:14):
have winnings.
Well, Arizona is going to taxthat because you earned money in
Arizona as a PGA golfer.
Because you earned money inArizona as a PGA golfer, but
from a legal standpoint youweren't doing business there.
It was a one-off experience.
Now, for example, Matt and Iwe're going to speak at multiple
(13:35):
events in the countrythroughout the year.
So if I get called to go speakat a conference in where was I
recently?
Austin, Texas.
Well, I shouldn't use Texasbecause, well, yeah, I'll use
Austin, they don't have a statetax in Texas.
But was I doing business inTexas?
No, I was called in to speak atan event.
It was a de minimis or aone-time or infrequent visit.
I don't have employees there, Idon't have an office there, so
(13:57):
I don't have to register there.
Now, if I was to go camp out inTexas for a month or two, visit
a lot of clients, maybe rent alittle shared corporate space
for 60 days.
Now I'm doing business in Texasand it's gray, but this is what
.
In a consultation with one ofour lawyers, we can help you
(14:19):
identify when you need to go tothat level and when you don't.
Speaker 2 (14:20):
And I think for the operational business generally,
there's hopefully only a fewstates you need to register in
and it doesn't all come at once.
It's not like, oh, I've got togo register in all 50 states and
that's very rare.
You would even see that.
I mean you've got to be a bigmultinational to be stressing
about that.
So I would again just think ofyour physical presence,
(14:40):
employees yourself, equipment.
Again just think of yourphysical presence, employees
yourself, equipment, assets andwhere those are located.
That's generally going to bewhere you need to get registered
.
Just have that on the top ofyour mind.
Where you need to stress aboutthis or not.
Don't worry about the customers, don't worry about the sales,
don't worry about where you'reshipping stuff or where people
are paying you from.
Speaker 3 (14:57):
It's not as much of an issue in terms of it's not an
issue, I should say in terms oflike, where you need to
register your LLC or yourcorporation.
I'm going to again get a littletransparent here and I'd be
interested in what you thinkMatt is.
My wife Patty and I we have boyprobably 20 LLCs for different
(15:18):
reasons operational and holdingreal estate and we have real
estate in probably, let's say,four different states
operational and holding realestate and we have real estate
in probably, let's say, fourdifferent states, maybe five.
Well, it can be a lot to stayorganized, and so I want to give
you all a pro tip.
We have a master spreadsheet inExcel where we have all of our
entities, and we also have aportal at Main Street Business
(15:39):
Services.
Main Street Business Services isa company Matt and I set up 15
years ago to help clients keeptheir address private, because
when you go register in anotherstate, they're going to say who
are you, what's your address?
We've got to have an address andclients will just put their own
address down.
All of a sudden, your homeaddress is out there to the
(15:59):
world, and so we started to say,well, we'll be your registered
agent, we can even be yourcompany address, and we will
track all of these entities foryou when you need to pay your
annual fee and are they in goodstanding, because if you don't
meet and in our calendar weissue every year probably
there's 40 different deadlinesyou know Vermont, you have to
(16:21):
register in December and inCalifornia it's in April, or oh,
it's the day you registeredyour entity in that state.
That's the month every year.
So different states havedifferent rules.
We track all of that for acouple hundred bucks a year.
We have a company complianceprogram.
So for the each entity you'renow in a portal.
We've got them tracked in ourspreadsheet and it saves Patty
(16:43):
and I a lot of time because Idon't want to track that crap.
So Main Street BusinessServices is a great resource if
some of you are looking for that.
Speaker 2 (16:51):
Yeah, I mean that's the thing is, you start growing,
whether it's businesses youhave in different states you're
operating in or you've gotmultiple rental properties or
LLCs, and that's even in onestate.
I mean that can be a lot tomanage and things that.
That's like the last thing youwant to be thinking about.
Did I renew that properly?
Did I get it registered in theright state?
Did I do my minutes?
You know, is my, is my stuffprivate?
(17:13):
If that's something I'mconcerned about, like, what are
my options there?
I mean, that's exactly what MainStreet Business Services does
every day.
We keep it simple for you.
So we just take care of it andtake it off your plate.
Go, focus on making more moneyin your business.
Don't turn yourself into yoursecretary because you don't want
to have someone else do yourLLCs and corporations.
So great tip there.
(17:34):
And, by the way, you can get afree call with the team at
MainStreetBusinesscom.
Go there to book a call withthe team to learn about those
services and how we can takethat off your plate, make sure
it's handled properly and makesure these entities are in good
standing and that assetprotection you're hoping for and
planning for by using LLCsproperly and corporations is
actually going to be there foryou.
You're registered in the rightstates, you're making sure those
(17:55):
are renewed, so you're in goodstanding.
So you get that assetprotection you paid for when you
set that LLC up in the firstplace.
Speaker 3 (18:00):
I'm just going to mention a couple last final pro
tips, if I could.
When you register in anotherstate, there's two things
they're going to ask for thisregistered agent who is going to
in that state receive notice ifsomeone's pissed off, that's
really what a registered agentis Someone's mad, whatever you
(18:22):
got.
A registered agent is Someone'smad whatever you got a rental
property there.
Someone's mad at our employeethere, whatever.
They're going to go to thestate website and look who is
the registered agent that Icontact or serve.
Our service is what is it, Matt?
$150 to be someone's registeredagent $125.
What did we decrease our price?
What the hell?
(18:42):
Maybe I got it wrong.
I'm just joking.
I did 125.
I thought it was 150.
Okay, we'll see.
You guys, you're alreadygetting a deal.
No, so that service we providein all 50 states because it has
to be an address in that state.
So don't get frustrated.
When you go to register foreign, we'll do it for you for a few
(19:03):
hundred bucks.
But if you try to DIY it, whichis fine, they're going to ask
for the registered agent.
You can say hey guys, I don'twant you to register for me, but
will you at least be myregistered agent?
Sure, just get over toMainStreetBusinesscom say I need
you to be my registered agentin Georgia and I just registered
my company there.
Okay, cool.
Second pro tip when you'reregistering in that state,
(19:26):
they're going to need thecompany address.
Now, the company address doesnot have to be in that state,
only the registered agent doesso.
Again, you can use your companyaddress in Arizona if you're
setting up an LLC in Georgiawith your rental property, but
just don't use your home address, please.
Freaking A try to use aninnocuous address.
(19:49):
We have a virtual mailboxservice that's cheaper than any
post office PO box, holy crap.
If any of you haven't been downto the post office and tried to
get a PO box, first of all youhave to give blood in your
firstborn child.
Then it is so freakingexpensive it blows my mind.
We have a virtual mailboxservice where our law firm will
be your address and they got togo through us to find out who
(20:11):
the hell you are.
So that privacy can add a lotof benefits too.
So when you go to the state toregister foreign, you can do it,
go DIY the hell out of it, butjust know we'll be your
registered agent and we can beyour address, so that you have a
little more privacy.
Your name may be out therethat's a whole other strategy
too but at least not youraddress.
Try to be careful with that.
Speaker 2 (20:34):
Yeah.
So there's a lot that can gointo this.
But we don't mean to overwhelmyou, just give you some quick
answers on what you need tostress about, what state you're
in, what not overwhelm you justgive you some quick answers on
what you need to stress aboutwhat state you're in, what not,
and then make sure that you'rebeing actively maintaining that
entity and getting it doneproperly and also knowing the
resources that you have to reachout when you need the expertise
or you want to have someonetake that off the plate for you.
But we have a lot of resources,I'll say, and I think at the
(20:57):
mainstreambusinesscom websitethere's a lot more resources
there and information At KQSLawyers.
Of course there's more.
You can learn too on our teamand how we can help.
Speaker 3 (21:06):
I've got another one that was a common question here.
I think we have two moreminutes.
This is one where people willsay let's say I'm living in
Idaho, we have an office inIdaho, I used to live in Idaho
and we're registered in.
Speaker 2 (21:19):
Idaho with our entity .
There you go.
Yeah, that's right.
Speaker 3 (21:23):
And let's say, matt calls me up and he goes hey, hey
, I got this project down herein Arizona.
It's pretty cool.
It's an operational business.
It could even be maybe it's afix and flip rehab scenario with
a lot of action.
So we're going to need to useour S corporations.
So we would.
We would choose to set up anLLC in Arizona because we're
(21:45):
going to be doing business thereand we want to funnel the
profit through our S-corps.
So that's going to be our taxstrategy.
So we set up our LLC in Arizonabecause we're doing business in
Arizona.
And Matt says well, are yougoing to own this Mark?
And I go, no, I'm not going toown it.
My S corporation is going toown it and Matt's S corporation
(22:06):
is going to own it.
Well, now here's the questionDoes my S corporation in Idaho
have to register in Arizona?
It does not.
It's simply an owner of the LLCin Arizona.
Now, for tax purposes it'spretty kick-ass.
My profit's going to go over tomy S corcorp in Idaho and
(22:28):
that'll save me onself-employment tax.
I will get a K-1 from theoperation in Arizona.
That'll go to my S-corp.
But I don't have to register myS-corp in Arizona because it's
not the one doing business there.
So for some of you that haveLLCs that invest in other LLCs,
just worry about the LLC doingbusiness in that state, not the
(22:51):
LLC that's investing in the LLC.
Speaker 2 (22:53):
Oh, I love that scenario and it made me think of
another one that I've had everyonce in a while comes up, which
is hey, I have real estate in,let's say, colorado and I own
that through an Arizona LLC.
Because I just have thatArizona LLC and it's a cabin or
it's raw land, I don't rent itout, so I'm not in business, do
I need to register in that state?
If you actually don't, moststates will say that
(23:17):
out-of-state entities can ownreal estate in their state
unless those are put intobusiness, for example as a
rental property.
That's short term or long term.
So just keep in mind you canuse an out-of-state entity to
own real estate in another stateand most states don't require
that.
Now, one caveat I've had.
Sorry, I went down the rabbithole on this.
Speaker 3 (23:36):
No, this is great.
Speaker 2 (23:36):
This is good.
One caveat I had on that isthere was a county though that
wouldn't transfer the title andthe title company's like, sorry,
just us does how it works herein this state and these, these
counties is um, they won't letyou transfer if it's an
out-of-state entity you have.
So we had to register thatclient's LLC in there, even
though in this example I can'tremember what it was, if it was
(23:59):
the cabin or the raw land orwhatever it was that wasn't
helped put in, you know, wasn'tin business or conducting
business.
So some states, will, you know,put a their foot down on that,
at least when you're trying totransfer titles.
So just heads up there.
Speaker 3 (24:11):
I like Matt's example , and I want to riff on it for a
minute.
This is kind of where we'relike.
You know, I just take off.
You know, maybe this is thedrum solo portion.
Speaker 2 (24:19):
Yeah, this is the encore too.
We came back on stage, you know, yeah.
Speaker 3 (24:23):
Yeah, okay, now everybody remember what Matt
just his scenario was Lives inArizona, bought a cabin in
Colorado.
And it's funny you say thatbecause we just had some friends
buy a little piece of land inSteamboat and they're building
out a little cabin.
They're not going to rent itout, it's kind of just their own
little personal property, butthey want it in their Arizona
(24:46):
LLC.
Now if the county in Coloradoand Steamboat is cool with it,
you can just transfer the titleinto the LLC.
Don't worry about the bank.
There's not going to be a dueon sale clause.
You're still the underlyingowner of the property if you're
on the mortgage.
But they're not doing business.
So Matt's not worried about theasset protection per se.
Now there's some people wouldargue, well, there could be.
(25:08):
People would argue, well, therecould be a random hunter or
some kids on four-wheelers thatgo in there and screw around on
the property and get hurt.
I'd like my LLC registered inColorado, okay, but you're not
doing business there.
It's more kind of a littleasset protection technique.
Now let's say Matt goes well,I'm going back to Colorado and
I'm going to buy a rentalproperty.
Down the street I saw thisproperty that'd be great for a
(25:32):
short-term rental.
It's down the street from myown cabin so I can kind of check
on it from time to time, maybeeven take some business tax
write-offs to go check on it.
Stay in my own cabin coolwrite-off strategy.
Well, I'm going to set up aColorado LLC for that.
Well, my Arizona LLC is going toown the Colorado LLC, kind of
like that S-corp to Arizona dealwith Matt.
That was operational.
(25:53):
This one's going to be theholding company strategy.
So I'm going to use my ArizonaLLC to really not own anything
directly but just own other LLCsthat own the property directly.
So I do not have to register myArizona LLC in Colorado because
I have a Colorado LLC theredoing the heavy lifting and then
my Arizona LLC is just theowner.
(26:14):
We have many, many clients thatdo that because they want that
double layer of asset protectionand a little more privacy,
because that Colorado LLC is notgoing to have their name
anywhere.
They don't want their addresson it, they don't want their
name on it and they're going touse the Arizona LLC to try to be
the front or the face, andthat's where this Wyoming
strategy comes into.
So that's next level.
(26:35):
But our lawyers can walk youthrough that and keep it really
quite affordable.
Speaker 2 (26:38):
Yeah, and that's that holding company, property
entity holding LLC, property LLCstrategy.
If you're someone that has moresignificant assets or equity in
properties, that's definitelysomething we look at for clients
and, like Mark said, wyomingwould be a popular place to do
the holding company because ofsome privacy stuff that they do
there and some charging orderasset protection that's unique
(27:00):
in that state for single memberLLCs.
Speaker 3 (27:02):
Well, I'm going to take us out with a very special
sound.
This is the sound of opening upsome Fritos bean dip.
If you don't have Fritos andbean dip on a regular basis,
you're missing out on some ofthe most special things in life.
Speaker 2 (27:17):
Oh, that was great.
Speaker 3 (27:18):
Was that nice.
This is my lunch Fritos andbean dip.
Speaker 2 (27:22):
This is an upgrade from your 7-Eleven lunch
yesterday.
Speaker 3 (27:28):
Why don't you tell everyone what you had from
7-Eleven for lunch yesterday?
They have a new egg roll that'sout, you know, and it's on the
little rotisserie.
You know it kind of goes fromstill cooking to cooked and
ready to overcooked.
Do not eat this.
I usually take them from thefront, you know.
That's really.
That's the trick.
That's where you're reallytesting your gastro, you know,
testing of your body to see howold really am I.
(27:51):
Can my body handle this?
I did okay, so you know I'mstill yeah.
Speaker 2 (27:55):
Mark told me about how good this egg roll was from
7-Eleven and I'm like I'm justgoing to take your word for it.
Speaker 3 (28:03):
You can go test it out yourself, you know I would
give it five stars out of five.
Really, wow, that's high praise.
Well, everybody, thank you forbeing here.
We try to keep it light and fun, and you know what the beauty
of the American dream is?
That you get to do business inall 50 states.
You really can.
It's funny.
Years ago I'd meet people whoare like well, I can't buy a
(28:26):
rental, there's nothingavailable in my area, what
You're freaking Southwest flightand a Hampton in a way, from a
killer deal.
You know, get out there and sothe world is your oyster.
My people, that is your.
That's our message today, andit doesn't have to be expensive.
Legally, you can do it.
We've got the resources for you.
Get a call with one of ourlawyers, get all of your
(28:46):
entities on a freakingspreadsheet and over at Main
Street Business Services.
You'll love our new portal.
We'll take care of you, matt.
Speaker 2 (28:52):
Final words yeah, Thanks everyone for tuning in.
If you like the show and you'restill listening, whether you
like egg rolls from 7-Eleven ornot, you know we could give us a
five-star review, a thumbs up.
Please share this podcast withyour friends and family.
We'll up.
Please share this podcast withyour friends and family.
(29:12):
We'll see you next time.
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