LLC in NJ, PA, DE, or elsewhere?

[Chris Laino]

I'm looking to file an LLC but not sure where to file or the benefits are to one state over another.

I’m located in NJ but my partner is located in PA. Our first project will be in NJ but we may venture into PA at some point. I know Delaware is very business friendly, but I’m not sure of the benefits of one vs another. I saw that South Carolina had a cheap filing fee and never a renewal fee so would that be beneficial to give me protection and be cost effective?

Also, what's the quickest way to form an LLC?

Any help is greatly appreciated, thanks!

[Chris K.]

@Chris Laino

For the LLC that will actually own the property, I typically do LLCs in the state that where the property is located. At one point in time, some states had serious advantages when it came to the LLC laws. Nowadays, competitive advantages have more or less flattened out. I think that is especially true for real-estate holding companies.

In the venture captial world and the "big business" world, many of them incorporate in Delaware. But I don't see a strong argument for why an average real-estate holding company should incorporate in Delaware. For example, you are unlikely to take advantage of the Court of Chancery in Delaware. If you are looking to do an IPO or an MA for your startup, being in Delaware could be a good idea due to the fact that majority of folks you will deal with use Delaware as the "standard." 

Filing for an LLC is easy. The harder part is for you and your business partner to agree on an operating agreement. That's especially true if you guys are looking to do a 50/50 llc.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.