Where to incorporate?
This is one of the most common questions for businesses wishing to form a corporation or LLC. It’s usually best to incorporate or form a limited liability company in your home state however, an entity may elect to incorporate outside the state in which the corporation conducts a majority of its business and choose to incorporate in any of the 50 states or the District of Columbia. It is typically the least complicated, if you only plan to operate the business in your home state. You avoid paying franchise taxes and filing annual reports in more than one state and it usually costs less to incorporate locally. But you may miss out of the advantages of forming a corporation or LLC in Delaware or Nevada, which are incorporation friendly states. Due to their unique incorporation laws and favorable tax policies, certain states are well known as favorable homes for corporations. If you’ll be doing business in multiple states, you may want to consider incorporating in Nevada or Delaware.
An organization may incorporate federally or provincially. This decision may be based on the location of the organization. If the organization is to carry on its activities in more than one province under the same corporate name and wishes to move its registered office around the country with ease, it may incorporate federally. A local organization that will remain in the community or province usually incorporates provincially. An organization that is incorporated federally may also be required to register provincially, depending on the nature of its activities in each province.
