• February 2019
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What are some of the best states to incorporate an online business?

I agree with Jorge – this is a question best answered in consultation with a legal professional. An attorney will provide you with expert advice about the pros and cons for incorporating in the states you’re considering. Generally speaking though, incorporating where you live and run your small business makes sense because it’s logistically easier, especially if your business is in its infancy. However, there may be real tangible benefits to incorporating in another state.

Delaware, for example, is very friendly to corporations and a well-known tax haven. In fact, all you really need to incorporate in Delaware is a business name, registered agent, and $89, plus there’s no need to identify owners or officers. Delaware also does not tax income earned from intangible assets such as trademarks (which might be important for an online t-shirt business); so many businesses park such assets in their Delaware corporations to reduce their tax obligations. In addition, Delaware has a Chancery Court which is exclusively dedicated to resolving business disputes. Check out my other thoughts on incorporating in Delaware here & here.

More recently, Nevada has become an attractive state in which to incorporate, especially because it is uses Delaware’s laws as its own model for developing its management-friendly corporate laws. (more on the advantages of incorporating in Nevada here.) Wyoming is considered to be a corporate friendly state as well, in particular because it does not levy corporate or personal income taxes.

As an aside, if you engage a lot of freelancers and independent contractors to help you operate your business, you are also going to want to have an attorney draft your contracts for engaging those types of workers. Using forms from the Internet is not a good idea because they are not specifically tailored to your business and may cause problems down the road. An attorney will also be able to help you secure any licenses or intellectual property (IP) rights for the the t-shirts and other products you sell.

LawTrades has a pre-vetted attorneys who have vast experience in helping people incorporate their small businesses and startups. Our services are cost-effective and specifically designed to help entrepreneurs. Contact us today for a free consultation and no-obligation price quote. Good luck!

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