Incorporation - Try Your Home State
It used to be true that "everyone" incorporated in Delaware due to its more suitable terms, but many of these terms naturally don't apply to startups, or the differences don't exist anymore. Most company professionals now propose that your first option should be your home state, or the state where your startup resides.
Incorporation - Try Your Home State
I live in Arizona, so I'll use that state as an example. If your home state is Arizona, and you plan to do company there, following is a list of five key advantages of incorporating your company in Arizona:
Incorporation fees are low. The process is simple, together with the convenience of geographical proximity. Local attorneys, if required, are more well-known with Arizona laws. Your company automatically gets an intrastate securities law exemption. No need to register as a "foreign" corporation in the state of operation.
There are still company considerations which might override low cost and simplicity. For example, if your company is likely to be large in size soon, have a large estimate of shareholders, or you have a high probability of going public, it might still be a good idea to join in Delaware or Nevada due to these two states more size-friendly laws.
For the rest of us, there are obvious advantages to staying close to home. Let's take a closer look at some of these advantages:
Arizona incorporation fees are low. Filing fees, together with supervision fees, vary from state to state, but will fall anywhere from in Mississippi to 0 in Nevada. Arizona is close to the bottom, with statutory fees of only . Even if you pick to add the expedite fee of , and consider other 0 for publication requirements, the costs to join in Arizona are very reasonable. The process is simple, together with the convenience of geographical proximity. To join a corporation in Arizona requires that you file Articles of Incorporation with the Arizona Corporation Commission, release the incorporation filing in a newspaper of general circulation three times, and submit an affidavit of publication back to the Commission. Visit their offices in Phoenix or Tucson for personal service. Local attorneys, if required, are more well-known with Arizona laws. If your company needs a involved organizational or financial structure, the aid of a local attorney may be required. He will be well-known with any unique Arizona requirements for organizational structures, report keeping, capitalization, debt financing, role of shareholders, distributions, personal liability, and state tax considerations. Your company automatically gets an intrastate securities law exemption. To qualify for the intrastate gift exemption, a company must be incorporated in the same state where it is gift the securities and carry out a very indispensable estimate of its company in that state. If you join and do company in Arizona, this item alone can save you a indispensable estimate of supervision time, paperwork, and legal fees. No need to register as a "foreign" corporation in the state of operation. Most states have laws that require entrepreneurs to re-register a Delaware company in the state where it is well doing business, and unfortunately, re-registration involves more than a few hours of paper work.
But don't forget that forming the new corporation is just the "tip of the iceberg" with respect to operating a company in the corporate form. Although it is relatively easy and inexpensive to join a company in Arizona, I propose that you don't hesitate to consult an Arizona corporate attorney when incorporating for issues that may require legal advice and action.
Now is the time to get started. With a exiguous luck, your new startup should be up and running in 30 to 60 days.
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