Is It Worthwhile to Register My Business?
Some business structures don’t require state registration to operate. If you’re a sole proprietor, then zero incorporation paperwork is necessary. Then you can take advantage of the tax deduction benefits that become available from your freelancing or self-employment activities.
If you want to protect your personal assets from business litigation, then you must register your business as an LLC or corporation.
Many people think that they must incorporate their business in their home state, but that is not always the case. Because this activity falls outside of the scope of the federal government, we can help you to register your business in any state you choose.
What States Offer the Best Registration Benefits?
If your business only provides goods or services in its home state, then it is usually best to register there. When you produce online work or nothing local, you should choose the jurisdiction that offers the best value for your needs.
Some states offer formation fees that are as low as $50. If you were to choose Connecticut to register your business, then you would pay $455. That’s just one way you can look for savings. Here are a few more for you to consider.
Annual Filing Fees
After you put in a year of working hard to grow your business, states will ask you to file a report with the government. It keeps everyone informed about where your company operates, any stocks issued, and other critical information. Ohio and Alabama don’t require regular filings, but Nevada will make you pay $325. Maryland bases its fee on your income levels, with a minimum of $300 required.
Taxation is another significant factor to consider when deciding to register your business. If you choose South Dakota, Wyoming, or Nevada, then you won’t have a state income tax to pay when operating with their borders. California, Minnesota, and New Jersey have the worst tax profiles to manage. Some states use gross revenue as their evaluation figure while others use profits, so consider your costs carefully here.
Delaware has the best business laws in the United States. Issues go before its Court of Chancery for corporate cases instead of a citizen jury, and it is the only state with this option. That means your legal costs will be much lower when registering a company here. If you want an investor to come on-board with your agency, they might even require that your company incorporate it there.
Wyoming and Nevada are trying to provide similar opportunities, while Mississippi and New Mexico rank at the other end of the scale.
When you incorporate a business in most states, the government requires contact information about yourself and data about your partners, managers, and shareholders. Nevada and a few other jurisdictions offer an enhanced level of privacy so that your personal details don’t show up in casual searches. People can still find out that you’re the owner of the company, but it takes a formalized process to get that info.
The reason why Nevada’s fees are so high is that there are no franchise or personal income taxes. You won’t have fees imposed on corporate shares. Delaware offers a similar option for non-residents, and directors, officers, or shareholders can live out of state. Even stock shares owned outside of Delaware are not subject to the state’s taxes. If you know that your responsibility could be high outside of your corporation, then this issue is one to review.
If you don’t like the idea of collecting sales tax, then Alaska, Oregon, and New Hampshire are jurisdictions to consider for your corporation. Delaware also makes this list. You can reduce expenses by purchasing from local vendors with this consideration, but it also means you usually need to live there to maximize the benefits.
Where Should I Incorporate My Business?
The best state to incorporate your business depends on what your priorities are right now. If your goal is to court investors or reinforces legal structures, then you’ll want to review the states that can support those efforts.
If you worry about what the yearly obligations will be for your filing costs, then it will be worthwhile to look at states where annual reports are not necessary.
Navigating through these processes can be complex. Our expert team can help you to finish the incorporation process so that you can register your company in whatever state you prefer. The new year is the perfect time to carve out a new path in life, so take this opportunity if you’re thinking about opening a new corporation in 2020 or beyond.