Incblog for Entrepreneurs

Covering entrepreneurship and business start up questions for non-residents and US citizens.


Apr 22 2009

Choice of State and expanding to new locations

by John Gordon | 11:04 GMT

Often we get asked, where should we incorporate? What’s all this about Delaware?

Here’s our rules of thumb:

  • If you just have one location, and sell locally, you’re probably best off incorporating in your state, acting as your registered agent. (Standard rule applies, of course: get a good lawyer and a good accountant first, before anything is set in stone.)
  • If you are doing business in different states things are no longer so clear, but the rule of thumb changes to: consider incorporating in Delaware. There are several advantages for doing so, among which are a competent legal system of professional judges (hence, consistent rulings that make sense), straightforward laws and very prompt service. A lesser known advantage is that Delaware protects its reputation by demanding that its registered agents be responsible, responsive and honest. If there are any consumer complaints, the Secretary of State will contact the agent to get the issue sorted out.

If you do business in different jurisdictions, or incorporate in a state different from your current location, you will have to file for authority to do business in your state. This document, which may have somewhat different names in different states, registers your company (LLC, corporation, not for profit or whatever type of entity you are) officially, and prevents any other company from using your name in that state.



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