My entertainment company hosts food and beverage festivals, music events, and procure entertainers for events. We host events and hire entertainers in different states, and eventually, internationally. Should I create a corporation then create a separate LLC for the hiring of entertainers as well as separate LLC's for each event?
If so:
How do I create an LLC in the name of a corporation?
Should I incorporate in Delaware?
Do the LLC's get filed in the states the events are held/where the entertainers are hired or are the LLC's filed in the same state as the corporation?
Thank you!
If your business is located in Florida, there is no reason, at least at the outset, to incorporate in Delaware. Should your business grow to the extent that Delaware incorporation benefits your entity, you can always change it down the road.
I strongly advise you to speak with a local business attorney in order to ascertain whether a corporation or LLC is better for you and whether separate entities should be formed for each production.
Best of luck.
The foregoing discussion does not establish an attorney-client relationship, is qualified by the limited facts presented above, and should not be relied upon as legal advice. To obtain definitive legal advice upon which one can rely necessitates retaining an attorney who is qualified in this particular area of the law. Any comments are merely suggestions for you to think about in discussing your situation with your local attorney.
I would not go to the expense and effort of creating separate LLCs for hiring entertainers or for conducting events in different States, at least initially. It sounds like you have a single business that is conducting activities in numerous jurisdictions and, at most, you might need to qualify the LLC to do business in those additional jurisdictions. For an entity that does business in numerous jurisdictions, Delaware is always great place to form the entity, but Florida also is an option if that is the site of your management activity.
I have represented a number of multistate entertainment companies. The problem is, each state wants to have you license in their state, pay sales tax and other business taxes. In addition, they will fight whether the people who work at an event are employees or independent contractors. Even though this may sound like a simple business to you, for tax and legal purposes is quite complex.
I would not suggest setting up a corporation to the be the parent of several LLCs. Unless you are a foreign citizen or resident, an LLC as a parent would probably make the most sense. You definitely should check this out with a good tax and business lawyer.
If you do events in multiple states, it may be easiest to have a separate LLC for the main jurisdictions where you have the events. Once again this is a combination of business and legal call.
My clients that if been involved in the multistate transactions find that each state wants to tax the same income and there can be a lot of arguments. One of my clients has been audited by the New Jersey Department of Labor four times, the New Jersey Division of Taxation twice, the IRS, and two other state tax agencies. They came to me already structured as one entity authorized in multiple states. I work with them to restructure so that the main states where they are doing business have separate entities.
I hope this gets you towards the right direction!
Ron Cappuccio
