3 Questions to Ask Before Forming a Delaware Company
Delaware is Mecca for corporations.
You've probably heard a lot about registering your company in Delaware. Here's how to decide if it's the right fit for you:
1. Where do the owners work?
You always need to register your company in the state where you run your company. If you work in California, you need to register in California, which means you'll need to pay taxes and registration fees in California.
If you choose to register in Delaware for the reasons below, you'll also need to pay taxes and registration fees in Delaware. So keep that in mind.
2. Can you afford the taxes?
Each state has a different tax structure and rate. For example, Delaware has a franchise tax depending on the number of shares within the company. Is that affordable for your company?
3. Do you want investors?
Investors prefer some states to others. Delaware is a popular state for companies seeking investors because it has it's own business law that is very corporate-friendly. If attracting investors is a goal of yours, Delaware may be the best fit for you.