Forming a Corporation: Where to Incorporate
One of the first considerations after a new business decides to incorporate is where to incorporate. For most small businesses, the answer may be as simple as registering in your business's home state, but questions can arise when you conduct business in another state, and when you are considering the state of Delaware as an attractive option. Following is a discussion on where to incorporate your new business.
Register in Your Home State
A standard rule of thumb is to incorporate in the state where the corporation will do most of its business. This rule holds especially true for smaller businesses that will likely not expand significantly, or that do not foresee conducting business outside of their home state. So, incorporating in your business's home state is usually the safest bet for your new business. Then if, after your corporation has been up and running for some time, it appears that you may need to conduct business in another state, you can always register in another state as a foreign corporation (see next section).
Each state has its own legal requirements and registration procedures for new businesses wishing to incorporate. To learn more about incorporating in your state, visit the Corporations or Business Services Division (or similar business filing agency) of your state's government.
Registering in Other States: "Foreign" Corporations
When a business that is incorporated in one state wishes to conduct business in a second state, the corporation is considered a "foreign" corporation and may need to register prior to doing business in the second state. For example, if a registered New York corporation wishes to become authorized to do business in Connecticut, it will likely need to obtain a Certificate of Authority for Foreign Corporation (form in PDF format) from the Connecticut Secretary of State. Most states require that out-of-state corporations pay a filing fee in order to register as a foreign corporation.
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