While half the world is ordering TVs on Cyber Monday, American founders are ordering something else: their company for the new year. November and December are peak season for LLC formations, and if you understand why, you can use the most elegant timing trick in the whole formation business.
Why everyone wants to form now
The turn of the year is the natural finish line: new year, new business, clean start. For people moving abroad there is also a practical rhythm: many moves are completed at year end so that the tax years are cleanly separated. The result: from January, applications pile up at the state registers, and the same formation that sails through in summer takes noticeably longer in January, as we described in the article on honest formation times.
The December cost trap
Now the part hardly anyone does the maths on for you: an LLC formed in December can cost you a whole extra year of obligations. Three mechanisms work together. First, some states do not prorate their annual charges: Delaware's franchise tax, for example, is due for every calendar year in which the LLC exists, payable by 1 June, even if your company only came into being on 20 December. Second, the formation date starts the annual report clock, in many states on the anniversary of formation, in others on fixed dates in spring. And third, the underrated point: the stub year already requires its own US tax return, your first Form 1120 with Form 5472, even if the LLC only existed for two weeks in December and did not take a single dollar.
The trick: order today, be born on 1 January
The good news: America has the perfect solution, and it is called a delayed effective date. Most states let you set the effective date of the formation in the future, typically up to 90 days ahead. So you order in November or December, the filing is prepared and submitted, but your LLC only comes into legal existence on 1 January. That gets you everything at once: processing before the January queue, no annual charges and no tax return for a pointless stub year, a clean first financial year from day one, and the EIN and account preparation run over the holidays instead of starting in January.
Who the trick is not for: if you need to issue invoices or sign contracts right now, you need the company now, and the stub-year obligations are simply the price of starting, predictable and covered in our package anyway. For everyone else, and in November that is the majority, the January start is objectively the better order.
The maths, with an example
Take a founder who starts on 10 December instead of 1 January: depending on the state, they pay one extra round of annual charges (300 dollars in Delaware, considerably more in California), their tax return clock starts a year earlier, and their annual report rhythm is tied to December forever. Three weeks of patience, zero downside, measurable savings. Cyber Monday logic at its best: the discount is in the timing, not the price.
Your next step
If you want the January start: order now and note that you want 1 January as the effective date; we will set up the filing accordingly. If your case raises timing questions beyond the LLC, such as aligning it with the date you move abroad, 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. Considers 1 January the best formation date in America, out of experience, not romance.
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