On company registration:

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April 03, 2023

by a searcher from Bard College in New York, NY, USA

Hi folks, a little market research here. If you have a VC, PE, or alt investment fund, in which state have you registered your management company and what was/were the reason(s) for that decision, e.g. taxes, legal structure, geography, market, fund focus, etc? Thank you.

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Reply by a professional
from Villanova University in West Chester, PA, USA
Hi ^redacted‌ - it's a cost benefit analysis of a lot of those components you mentioned. It will generally cost $1,000+ per year to maintain a business in a state outside of where you have a physical presence since you'll need registered agents + annual filing fees + perhaps registrations to do business in other states wherever needed. Generally, this is a decision made with your attorney and accountant.

The cost comes from taxes, initial setup and annual maintenance, etc. Benefits come from tax savings, the law that will apply (Delaware is well known for having robust law to handle any disputes between owners and interpretation of organizational documents, duties of managers, etc.), etc. Geography plays a role in that you'll need to register to do business (in addition to filing if you don't file in the state) in each state where you have a physical presence and have sales above the amount required by such state to register, which differs state by state. Legal structure plays a role in that some states offer certain legal structures that others don't - an example is a series limited liability company which is popular for fund formation that is only offered by a few states. I have some guides on this at https://www.deanstreetlaw.com/dean-street-law-legal-guides and would be happy to discuss this further.

Tagging ^redacted‌^redacted‌ since they're interested in the answer on this as well.
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Reply by a searcher
in San Francisco, CA, USA
Following.
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