Where to Incorporate

Thursday, November 09, 2006

You can options when it comes to incorporating your business especially if you are doing business in multiple states. This gives you the option of choosing which state you would like to be the home to your corporation. Many businesses are choosing one state over another due to their incorporation laws and tax policies. The two most popular states are Nevada and Delaware.

Advantages of incorporating in Nevada include no corporate income tax, no taxes on corporate shares, no franchise tax, no personal income tax, no I.R.S. information sharing agreement, nominal annual fees, minimal reporting requirements, minimal disclosure requirements, stockholders are not public record, and directors do not have to be stockholders. In addition, directors, officers, and stockholders do not have to live in Nevada, hold meetings in Nevada and do not have to be US citizens. Among other reasons, officers and directors can also be protected from personal liability for lawful acts of the corporation if they are a Nevada corporation.

Advantages of incorporating in Delaware include that corporations are not subject to state corporate income tax if they do not perform in business in the state of Delaware, the liability of a stockholder is limited to the amount of their own investment, corporations can live on after the death of the owner, no income tax for non-residents, transfer of ownership of a corporation can be through a sale of stock, and obtaining capital is quite easy by selling stock to investors.

Before you start a corporation in your home state or if you choose one of the states above you will still need to complete certain tasks. Learning on the different laws, taxes that pertain to corporations in various states can be very beneficial. With this information you will be able to make an educated decision as to where you want the home base of your business and you will be able to understand the various benefits that each state offers to corporations. One thing you must also decide on is the business structure that best fits the need of your company such as Corporation, Limited Liability Company, C Corporation, S Corporation, Non Profit Corporation or Professional Corporation.

With this information in hand, you will be ready to incorporate and save money while building your business no matter where you decide for your company’s home. Be prepared by doing your homework and knowing what is really best for your company to succeed in today’s growing market.