Basics of Incorporation
Knowing a few of the basics of where and when to incorporate will provide you with needed insight to avoid unnecessary pitfalls, fees, and legal issues that befall many as a result of their failure to have a rudimentary understanding of the issues. There is a lot of hype out there about where to incorporate that may well lead you to discover that the steps you made to protect your business while in good faith, have caused complexities that hurt rather than help your business. In general there are several criteria to evaluate when considering where to originally incorporate/domicile your business. All the criteria should be looked at in aggregation to consider including:
Core Business Operations - Where your business actually earns money and produces income is a critical component to consider in determining where your business should legally domicile and register. For example if your headquarters is in Georgia, you would incorporate in GA absent any other substantive issues. Then if your business transacts business operations in other states you would want to consider registering your corporation as a foreign corporation in another state. This designation does not register you as a foreign corporation to the U.S. but to the state where you are transacting business and have substantive business operations.
Employees - For all states where you have employees you will want to be sure to register and incorporate in those states whether you have an office in that state or solely have employees who work out of their homes in those states.
Physical Location - For all locations that your business has a physical location and on-going physical presence, you will want to register your corporation as doing business in that state. Having a sound risk management plan is an integral part of the incorporation/registration process and is tantamount in making wise and informed decisions.
Working with your CPA and attorney on these issues before you incorporate is your best defense to ensure that you make wise and informed incorporation and registration decisions so contact us today.
