Selecting a State That’s Right for You and Your Business It’s only natural that you would want to incorporate where you live. If your home state has a high corporate income tax or state fee, however, or if your corporation will not be doing business in your home state, it’s often a good idea to consider incorporating in another state with more relaxed business regulations. Doing business in a state is more than simply producing or vending goods or making the occasional investment. For the most part it means inhabiting a physical space (warehouse or office) or having an active business presence, which includes conducting business with local vendors and belonging to and participating in local business affiliations.
Delaware for a very long time has enjoyed the prestige of being the state of choice for incorporating.
Delaware ’s corporate law, based on 200 years of legal precedent, is one of the most advanced in the country. The State of Delaware also has no sales tax, a low franchise tax, and no state corporate income tax as long as your business is conducted in
Delaware . No information sharing agreement in place between
Delaware and the IRS means your corporation will have plenty of privacy. There’s also no minimum capital requirement for forming a
Delaware corporation.
Business friendly and progressive,
Nevada lures new business every day with various advantages. There’s no corporate income tax, franchise tax and no taxes on the issuance of corporate shares. Employer payroll tax is minimal, and sales tax rates are competitive. Annual business renewal fees in
Nevada are modest. Information reporting and disclosures are kept to a minimum on a state level, and there’s no information sharing agreement in place between
Nevada and the IRS. Nevada also uses a business court system, similar to that of
Delaware ’s, for resolving corporation litigation quickly and fairly.
In
Wyoming , corporate filing fees are relatively low. You’ll also appreciate the fact that there’s no corporate income tax, franchise tax, gross receipts tax, or inventory tax. Plus, retail sales tax is a reasonable 4%. Because of its strong privacy rights,
Wyoming limits information requirements on a state level, and the state is not required to turn in information about your corporation to the federal government.
Wyoming has also allowed LLCs to operate since 1977, longer than in any other state. Since it protects the assets of corporations and LLCs to a high degree, it may be the state of choice for you.
If you choose to incorporate in a state other than your home state, you will likely have to pay different—possibly additional and/or more costly—fees and may have to meet a different set of requirements as far as documentation and licensing. Be sure and consult with your accountant or tax advisor before making a decision.
Incorporate in 2008! With LegalCPU.com you’ll save time, money and unnecessary attorney’s fee. Team members are standing by at 1/866-662-5467 to help set up your corporation.
LegalCPU.com—we get it done right!
