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Although you may be a resident of one state, you may, as many do, consider incorporating your business in a different state such as Delaware or Nevada. There are many advantages to incorporating in these statesadvantages that many feel make it worth their time and effort. Over 50% of the Fortune 500 and public companies are incorporated in Delaware. However, most of these advantages apply to smaller businesses in Delaware.
Delaware provides some excellent tax advantage in that they are no corporate income taxes for the companies that are not doing business in Delaware. All corporations in Delaware are required to pay a corporate franchise tax each year but there is no personal income tax in Delaware for nonresidents. Your business will be much more credible as an investment source and as a business as a whole when it's incorporated. The laws in the state of Delaware are corporation friendly as well as the court system providing security and asset protection. The business laws in Delaware are very flexible and rely on business laws with the assistance of judges as opposed to juries. In fact, the Delaware court systems often play a large part in deciding to incorporate a business in Delaware.
Members and directors of the corporation can remain anonymous if they so desire as Delaware does not require their names to be on the corporation documents. There are no taxes charged to shares and stocks owned by members that do not live in Delaware. There is not a minimum capital requirement for incorporating your business. As you can see, there are many advantages to incorporating your business in Delaware. The directors of a Delaware corporation business can determine the value or worth of the stocks in the company, regardless of if the stock is in the form of liquid funds, capital value or property, etc. The corporation can also purchase, sell or transfer stocks from its own company. Many feel that having their business incorporated in Delaware has increased the number of investors showing interest in them.
Nevada is another state that many choose to incorporate in because of all the advantages. If you like not paying taxes, and who doesn't, Nevada is the state for your corporation. In Nevada, not only are there no taxes on corporate shares but there is also no corporate income tax, personal income tax or franchise tax. The I.R.S. Information Sharing Agreement is unnecessary when incorporating in Nevada. Although certain reporting of certain disclosures is required, the amount is minimal.
Another huge benefit of incorporating in Nevada is that directors, officers or stockholders not only do not need to live in Nevada but they don't need to have their meetings there or even be citizens of the United States, nor are the directors required to be stockholders. The directors and officers of a corporation in Nevada are protected against a personal liability suit stemming from unlawful acts by the corporation. In fact, in some cases, a corporation is formed in the state of Nevada for the purpose of lessening an individual's liability in a business venture that's unlawful. Often Nevada is chosen as a state for incorporating their business not just because of the many obvious advantages mentioned here but also because it's a state the members frequent from time to time.
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