The answer to this question depends entirely on your preferences and the specifics of your business. Just as I stated in another thread the choice between CA or DE incorporation would be viewed as a detriment only if it adversely affected your startup’s ability to generate revenue or that incorporating in one state or the other exposed your company to unnecessary legal risk or excessive tax liability. When looking into this question consider the following:
- Formation fees. When you form a corporation or LLC, how much do you need to pay as a one-time filing fee to the state’s secretary of state office?
- Annual fees and filings. How much does the state charge as an annual fee to maintain an LLC or Corporation?
- Franchise taxes. How much does the state charge as a franchise taxes on top of annual fees?
- Legal and court system. How much protection and privacy does the state of incorporation’s laws offer businesses. The amount of liability and privacy offered corporations varies by state, therefore it is important to consider if a particular state’s laws are beneficial to your business goals.
- State corporate income tax. Corporate income taxes vary by state, bottom line, find the state that provides the least amount of tax liability.
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