The *best* state in which to incorporate isn't necessarily an easy
question to answer, because of the individual factors which must be
considered.
Incorporating Decisions
=======================
When making the decision of where to incorporate, three factors should
be weighed:
(1) The location of the business' physical facilities,
(2) The cost of incorporating in the state of operation versus
qualifying in another state and then doing business as a foreign
corporation in the state in which the business is located,
(3) The advantages and disadvantages of each state's corporate laws
and tax structure.
Usually the consideration is between the state of operations and
Delaware or Nevada.
If the corporation is a closely held corporation that does business
primarily within a single state, local incorporation is typically the
best decision. The cost of local incorporation will usually be less
than incorporating in another state and qualifying to do business as a
foreign corporation in the state of operations.
A Nevada Corporation
====================
The advantages to incorporating in Nevada are:
(1) Privacy
(2) Asset Protection
(3) Tax Savings
(4) Only one incorporator necessary
See: http://www.nchinc.com/whynv.php
A Wyoming Corporation
=====================
Just for the fun of it, I wanted to see what Wyoming might offer that
a Nevada corporation wouldn't, and I came across this site - Wyoming
Corporations.
- http://www.corporationstoday.com/
Their marketing strategy includes avoiding the "stigma" of a Nevada
corporation. They also state:
* No State Taxes
* Nothing to be shared with IRS
* Privacy allowed
* Shareholders are private
* Best Asset Protection Laws
* Bearer Shares allowed
* Nominee's officers are okay
* Citizenship not required
* State Tax not being considered
* Wyoming draws little attention
* No Nevada "Stigma"
* Lower Startup Costs
And point out that their startup costs are 50% less than Nevada's and
you aren't obligated to file and pay the fee for the officer's
information.
I suspect this is why you saw the advertising for a Wyoming
corporation, and I must admit that compared side-by-side, it would
appear there are advantages to filing in Wyoming.
Common Incorporation Protections
================================
The basic purpose of incorporation is to separate and protect the
assets of the directors, officers and employees of a corporation from
the liabilities the corporation may incur. (See Nolo Law For All,
"Choosing the Best Ownership Structure for Your Business")
- http://www.nolo.com/lawcenter/ency/article.cfm/ObjectID/2C1A52D5-9364-4F92-AD191B56DF9D4CE6
See also: Nolo's "Should I incorporate in Delaware?"
http://www.nolo.com/lawcenter/auntie/questions.cfm/objectID/337D5285-8011-4B09-A998089A04E631AE/catID/B491956E-A152-424B-A2342A5861B5EACF
Summary
=======
The actual advantage of incorporating in a state with very low or no
corporate income tax, such as Nevada, Delaware or Wyoming, is not as
great as it might appear, if the business must still qualify to do
business in its state of operations and pay taxes in that state as
well. As stated above, there may not actually be a *best* state,
because considerations include close look at what works best for any
corporation's particular circumstances.
Search terms used
=================
- incorporating + best state
- Nevada corporations
- Delaware corporations
- Wyoming corporations
Thanks for the chance to dig into this subject - as you can see, what
is best for one corporation may not work for another, so the answer
would have to include the particular circumstances on a case-by-case
nature.
Serenata |
