Where to Incorporate

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Where to Incorporate

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Question: Should I incorporate my business in Delaware, Nevada, or my Home State?

Incorporating in my Home State

For a small corporation with less than 5 shareholders, it is often best to incorporate in the state where the business will have a physical presence. In other words, incorporate a business in the state where you will have an office (including a home-based business) sales people, and/or employees.

Simply Stated: Unless a business has a physical office in Delaware or Nevada, it's easier and less expensive to incorporate in it's home state.

More importantly, while Nevada may not charge your corporation state income taxes, the state in which your corporation is physically located will come after you for those taxes sooner or later.

Where a business incorporates “Out of State” (like Delaware or Nevada), that business may be responsible for additional filings and fees such as:

  • Appointing a Registered Agent in that state
  • Paying Filing Fees in that state
  • Filing Annual Reports in that state

...then, additionally, your corporation may be required to do the following:

  • Appoint a Registered agent in THIS state
  • Pay Filing Fees in THIS state
  • File Annual Reports in THIS state
  • Qualify as a Foreign Corporation in THIS state
  • Pay taxes in THIS state

Incorporating in Delaware

Delaware is a very popular state for incorporating a business. Many larger corporations choose Delaware because it has the most developed and flexible corporate statutes in the country and is considered pro-business.

Incorporating in Nevada

Nevada has also become very popular for incorporating a business:

  • No State Corporate Income Tax
  • No Franchise Tax
  • No Personal Income Tax
  • Low Filing Fees