How to Choose a State

There are really no legal requirements to incorporate in the state where you conduct your business.

In fact, a business can incorporate or form an LLC in any state or the District of Columbia, regardless of the principal place of business.

But certain states are far more popular for corporations than others. Why? Due in large part to business friendly incorporation laws and favorable tax policies, two of the most "incorporation friendly" states are Delaware and Nevada.

Incorporating in Delaware is generally less expensive than most other states and Nevada, like Delaware, has business-friendly tax laws.

What State Should I Incorporate In?
Laws and fees governing corporations can vary from state to state. While you are able to form a corporation in any state you choose, most of our customers choose to form their corporation in the state in which they are conducting business. This is typically the most simple and cost effective way to operate your business for the following reasons:

  • Any state that you do business in may require you to file a "Foreign Qualification" if you are not incorporated there, costing additional fees and paperwork. (e.g. If you form a corporation in California, but wish to do business in Arizona, Arizona will require that you Foreign Qualify).
  • If you form a corporation in one state and do business in another, you could subject your business to taxation in both states. Many states will tax a corporation that exists in their state, even if it is not doing business there.

Special Considerations for Delaware and Nevada
Delaware is recognized as having modern and flexible corporate laws, a business friendly government, and a customer service oriented staff that can process documents and requests much quicker than other states.

Nevada does not charge a state corporate income tax or a personal income tax and allows for a higher level of privacy for a business and its owner's personal information.