A lot of people will just incorporate their business in the state that they live in and or do business in. Unfortunately that isn’t always the best choice, some states are simply more business friendly than others and if you choose the best state to incorporate in you will save yourself some money as well as give yourself a lot of extra little perks.
Filing fees, legal issues, corporate and personal taxes, personal liability, these are just some of the issues you need to keep in mind when deciding on which state is best. I’m not a lawyer and I can’t give you legal advice (always check with your lawyer first when it comes to any legal matter) but I can give you a brief overview of some of the things you need to take into consideration when trying to decide which state is best for your business.
The state that is usually on everyones list when it comes to being business friendly and a good state to incorporate in is Delaware. Delaware has a long standing reputation for being business friendly, with such unique things like the Delaware Chancery System. Where business legal matters are decided by business savvy judges; instead of corporate hating juries.
Officers of a company can remain anonymous and there are no income taxes to pay as long as you aren’t doing business in the state. It’s also quite inexpensive to file all the incorporation papers in Delaware. These are just a few of the many reasons why you should look further into incorporating in Delaware to determine if it’s the right fit for your business.
Next up is Nevada. Thanks to the revenue generated by the legalization of gambling there are no corporate or income taxes that have to be paid in the state. There is no tax on shares that are bought and sold and there is no franchise taxes either. You don’t have to actually live in the state and the shareholders meetings don’t even need to be held in Nevada, though I personally think a trip to Vegas for a meeting sounds like a good idea! The fees to incorporate are very low and the names of stockholders are not public so you can insure investor privacy.
One of the states with the smallest population is also one of the most business friendly, Wyoming. This state makes doing business in the state very effortless and profitable. Wyoming doesn’t have a personal income tax, a corporate income tax, an inventory or franchise tax. There is no limit to the amount of stock you can issue in a Wyoming corporation and there are no requirements to disclose the names of the shareholders. A business owner can maintain their anonymity by appointing another person to act on their behalf while still maintaining full control of the company.
Use this information as a jumping off point when you sit down and meet with your lawyer to discuss the best state to incorporate in for you and your business.