If you have decided to incorporate your business, you undoubtedly have a lot on your mind. One question that should not be overlooked is which state to actually incorporate in. Many people mistakenly think that they must incorporate either in their own home state, or in the state where they do the bulk of their business. Sometimes this may be more beneficial, especially if you have your primary place of business in California, but the fact is, in many cases a business can be incorporated in any state that the owners would like.
There are a number of factors to consider when making this decision, including the following three key factors that you will want to think through.
Tax Rates
One of the most important things to look at is the tax rates in each of the state. Some states such as Delaware and Nevada have very favorable business tax rates. If you can save even just one or two percent on business taxes, that can add up to thousands of dollars saved per year simply by choosing to incorporate in the right state.
Fees and Regulations
Every state also has a wide range of fees and regulations that businesses incorporated within them must pay and follow. Finding a state that is friendly toward your type of business is well worth the effort. Keeping in compliance with regulations can be very costly and time consuming for businesses, so finding a state that makes it easier for your business to operate will save you a lot of hassle over time.
Liability Protection
The legal climate of a state is another big thing to think about. Some state’s legal systems are setup to protect businesses from frivolous lawsuits, which can save your company a lot of problems down the road. In Nevada, Delaware and Wyoming, for example, companies are much less likely to be targeted by lawsuits than similar companies in many other states.
Taking the Time to Research Up Front
Incorporating a business is an exciting time, and you may be tempted to just push through each step quickly in order to get it completed. Rushing now, however, could cost your business thousands of dollars and lots of wasted time in the future. Take a step back and invest the time needed to figure out which state is the best fit for your business before moving forward. Call the attorneys at Integrated General Counsel today and we can help you do just that, and much more!
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