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It is important to choose the right state to form your new corporation or limited liability company but don't make it more difficult than it is already. For the majority of start-up businesses, incorporating in your home state is the simplest and least expensive option but there are a few things to consider before finalizing your decision.
If you operate your business in several states then you may need to register your company in additional states other than your home state. This registration process is known as qualification and your corporation or LLC will register as a foreign business in the states outside of your home state. IncAssist can help you form a corporation or a limited liability company in any or all 50 states.
If you just operate in your home state, you can still incorporate a business in any state you choose, however, you may incur additional expenses in doing so. Most business owners incorporate their business in their home state because this is usually the least expensive, most convenient and the simplest option for incorporating your new business.
For example, if you lived and operated your business in Oklahoma but you chose to incorporate your business in the state of Delaware you would have to pay Delaware's state tax and filing fees of $89. Because you are registered as a Delaware Corporation, you may also have to register your company in Oklahoma as a foreign corporation (even if it's just to open a corporate checking account in Oklahoma) which would cost an additional $300 for a total cost of $389. The cost to form a corporation in Oklahoma is only $50, which would save you $339 and reduce the amount of paperwork you would have to file.
In addition, you must have a registered agent with a physical address in the state where you formed your business. In the above example, if you do not know somebody that physically lives in Delaware who can serve as your registered agent, you would have to hire a registered agent service. By forming your business in your home state, you can act as your own registered agent saving yourself even more money. A registered agent is a person or company with a physical mailing address in that state (not a PO Box) designated to receive documentation on behalf of your company.
So why would anybody incorporate in a state other than their home state? Some states offer more flexible corporate laws, corporate officer anonymity, and a business friendly state government such as Nevada and Delaware but only you can determine if those features are more advantageous than the simplicity, cost, and convenience of forming your business in your home state. For the majority of start-up businesses, your home state should meet the needs of your company. If you have reason to believe your home state will not meet your needs, you should click here to take advantage of our free start-up consultation.
IncAssist, Incorporated can help you form your corporation or limited liability company in any or all 50 states, so regardless of which state you choose, choose IncAssist, LLC.
Thank you,
IncAssist, LLC
Starting a business? Start with us!
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