Published on Nov 7, 2013
When deciding whether to form a corporation or LLC, you should also consider options for the state in which you plan to incorporate. Cost, taxation and corporate laws vary from state to state, making some states advantageous for certain small business owners.Choosing home or another state Incorporating a business in the state where your company is physically located is called home state incorporation. Whether your business is a C corporation, S corporation, LLC, LLP, LP or nonprofit corporation, you must pay filing fees to the state when incorporation documents are filed, and will be subject to ongoing requirements and fees imposed by that state. Some business owners mistakenly believe they can save money by incorporating in a state with low fees, even if their company is neither located nor conducts business in that particular state. Companies incorporated in one state but doing business in another state(s) must register to transact business in those state(s) through foreign qualification. Which state is best for you? When determining your company’s state of incorporation, research states’ corporate or LLC statutes to determine which is best for you.