What State to Incorporate In
If you want to incorporate your small business, you have to make the right decision. Basically, you have two options – incorporating in the existing state and choosing another state to incorporate.
Weigh the good and bad points before making an informed decision.
There is always room for expansion when you own a business. Small businesses can decide to incorporate but the problem now is identifying which state to incorporate in. You see, the requirements and procedures tend to vary depending on the county or state where you plan to operate the business. Did you know that it is possible to incorporate almost anywhere in the US? For instance, if you’re small business is in California, you can decide to incorporate in Nevada. However, this is not always a good option. You have to weigh the good and bad points of incorporation before you proceed.
Delaware – A Good Option
When you decide to incorporate elsewhere, the business operations will become complex. With this option, you will need to obtain a certificate of authority. This is needed to continue business operations in your current location. You probably don’t want to lose access to your market, right? When registering for the certificate, you will need to spend money. By choosing to start a foreign corporation, you should be prepared for the consequences. Make sure that you look into the tax and law structure of the state before you proceed. Today, the most preferred state is Delaware and in fact, Fortune 500 companies have chosen this place as well.
Why should you incorporate in Delaware? Even if you’re not transacting in the state, you can still incorporate there. Corporate income tax is not that hard. With the help of the appointed judges, you will better understand the corporate law system. Persons who own shares of stocks but are not actually living in Delaware will not be covered by the taxes. Before making the final decision, find out about the cost figures since this is a very big factor. You have to make sure that you can still save a lot of money in the process.
In some situations, you will be required to pay taxes in the foreign state and the current state where you’re operating. You must be aware that the laws tend to vary from one state to another. Try to be familiar with the tax laws of the state where you want to incorporate. By doing so, you can make the right choice. Another option is to incorporate in your current state. If the laws and procedures are not that complex, you can consider this option. It pays to make an informed decision especially if it’s for the good of the business. This is your chance to expand, so do it properly.