Mid-December, the year is tipping over, and the loop in your head keeps playing: form quickly this year, or start cleanly on 1 January? We gave the general answer in the November article: for most people, a January start with a delayed effective date wins. But "most people" may not be you. Here are the five questions that decide your case, in order of impact.
Question 1: When is your move abroad?
The most important question isn't in company law at all. If you plan to move abroad at the turn of the year, the iron rule applies: residence first, then the active company. An LLC that is already invoicing in December while you are still fully tax resident in the country you are leaving produces exactly the tangle we described in the article on legality: attributable, reportable, unnecessary. You can form beforehand, effective 1 January; you should only start trading once your residence supports it.
Question 2: When do you need to send the first invoice?
The one legitimate reason for December: a real contract or client that won't wait. If an engagement has to be signed on 15 December, forming immediately is the right call, and the consequences of a short first year are simply a cost of success. If your first invoice falls in January anyway, that reason doesn't exist, and December only buys you obligations.
Question 3: What does December cost you in your state?
States treat short years differently: Delaware charges the full franchise tax for the year you started in, California does the same with its annual charge, while New Mexico, for example, with no ongoing state charges, asks for nothing extra even with a December start. The same decision costs nothing or several hundred dollars depending on the state; the pricing logic for your candidate is set out transparently on the costs page.
Question 4: When do you need the account?
Count backwards: the EIN and opening the account take their weeks, whatever the calendar says. If you want to be able to take payments in February, place the order now, effective 1 January: the preparation runs over the holidays, and you overtake the January queue instead of standing in it. The latest sensible moment to order for a ready start in Q1 is not January but the December before.
Question 5: Do you want a tax return for two weeks of existence?
Finally, the quiet cost item: every calendar year in which your LLC exists requires its own Form 1120 with Form 5472, even for a December stub year with no revenue. It is not a drama, but it is one more filing, one more deadline and one more chance for error, for zero benefit. 1 January wipes this item out entirely.
The short formula
December only wins if question 2 shouts "now". In every other situation: order today, be born on 1 January, with clean residence timing, no stub year, ahead of the queue. The year-end rush then happens exactly where it belongs: in the preparation, not in the register.
Your next step
Order now, effective 1 January; you'll find the right state in the atlas. And if question 1 is complicated in your case, family, a staggered move, book a consultation with Sebastian: one hour, held in English, honest feedback, 15-minute guarantee.
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ZeroTax LLC is a service of Mount Bonnell Advisors in Austin, Texas.
Founder of Mount Bonnell Advisors, Austin, Texas. Answers the December question a hundred times every year, mostly with: January.
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