How to Start a Business in The USA by MyUSACorporation - HTML preview

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Are you launching a technology startup with the goal of raising investment from angels/VCs?

 

If the answer to this question is "yes" then you probably should consider registering a Delaware C-Corporation specifically, since this is the most popular tool for companies with this profile.

 

Will you have a real office/store/warehouse in a specific state?

 

If the answer to this question is "yes" then you should consider registering your company in this state, even if it's not the friendliest or cheapest of all states.

 

The reason is simple - having real presence in a given state creates what is called "strong nexus", requiring your company to be registered in that state. That means if you register in one state but have real physical presence in another you would be forced to register a foreign entity in that state, which means the whole thing will cost you double or more.

 

Incorporation-friendly states

 

If your business is conducted online and/or run remotely from Europe, without any physical presence in the U.S. (having clients doesn't make your business U.S.-based) then you should consider registering in one of the incorporation-friendly states.

 

There are 3 states that are traditionally considered to be incorporation-friendly: Delaware, Wyoming and Nevada. Of the three we typically recommend Wyoming, because Nevada is quite expensive to register and to maintain your company in, while Delaware comes with high franchise tax, steep penalties for late fees and relatively high maintenance fees. Wyoming easily compares to the other two states, while being relatively cheap and easy to work with.

 

You can learn more about the difference between the three and see why we recommend Wyoming for most business types by checking the comparison between Delaware, Wyoming and Nevada.

 

If I register in one state, can I do business in another?

 

Per U.S. constitution, company registered in any U.S. state or territory is immediately recognized by all other states and territories, so for example you can take your Wyoming company formation documents and go to New York to open a bank account. Also, your clients can be anywhere in the U.S. or the world for that matter.

 

That being said, there are at least two cases in which additional registration might be required:

 

  1. If your business sells tangible goods that are typically taxed (sales tax) and it uses distributors in states other than the state of registration, then it might be creating "soft nexus", meaning you would need to register for sales tax collection in those states.