3.
Re: Where to Incorporate my Business? Aug 14, 2008 11:06 AM
There are multiple reasons people choose Delaware and Nevada, but the most significant are that Delaware's state laws and court system are very favorable to corporations (as a business owner, where would you rather go to court, in a state that tended to "protect" businesses and where the outcome of commercial litigation was "predictable" -- or a state that assumed businesses were "bad guys" and that had a history of huge out-of-the-blue judgments against them?). Nevada's corporate laws were modeled after Delaware's, plus Nevada has favorable laws regarding stock issues/purchases, no state taxes, very nominal fees, and privacy (shareholders are not public record).
In most states, a foreign (formed in another state) corporation must register in another state where it has a physical presence and conducts business -- and yes, the fees and taxes for registering as a foreign corporation can be just as much as if the corporation had been formed in that state to begin with.
Assuming that you're forming a small business in CA, then founding/registering the company in CA might be easier and better than registering and operating as a foreign corporation. There are other options such as forming a corporation in Nevada, and then forming an LLC in CA with the corporation as the member/owner -- but what's best for you and your business really depends on what you're trying to achieve relative to ownership, liability protection, growth, taxes, etc. There are trade-offs with every alternative.
Hope that helps. Best wishes.
