Why Incorporate in Other States?
To incorporate in Nevada and Wyoming is so effective, why incorporate in any other state? Because often incorporating in your home state can be your best business option.
There are times when the best place to incorporate is close to home. For example, if you operate a service-based business or a storefront in your home state, you may think twice about incorporating elsewhere. Even if you incorporate elsewhere, you will still have to register your company to do business in your home state. You will still pay taxes in your home state. You will still be bound by the laws of your home state. Plus, you’ll have extra filing and maintenance fees as you maintain your company in your home state as well as your incorporating state.
For some, the extra fees are worth the extra asset protection and privacy benefits of a Wyoming or Nevada incorporation. For others, the small extra fees are not material. It is a judgment call on your part.
To Determine Your Best Incorporation Options, Ask Yourself
- Where is my physical business located?
- Where do my employees live?
- Do I invest in real estate, and if so, where is that real estate located?
- Am I planning on selling that real estate and buying other real estate investments in other state(s)?
- Am I planning on moving out of the state and relocating my business?
Depending on the answers to these questions, you may be part of your home state’s tax system.
Don’t be fooled by operators claiming that by incorporating in Nevada or Wyoming, you won’t have to pay any taxes in your home state. It isn’t true and will cause you trouble down the road.
However, if you are a real estate investor interested in privacy and asset protection in your home state or seeking out and purchasing properties in other states, then you may want to consider using a Nevada or Wyoming LLC for the flexibility in moving in and out of states with no additional tax consequences. Or, as we discussed in our article on State Planning and Asset Protection, you may want to have home estate LLCs owned by a Wyoming or Nevada LLC for the extra protection.
Incorporating Offers Benefits in All States
While, depending on your home state’s law, you may not receive all the protections of a Nevada or Wyoming entity, you will certainly be better protected than if you operate as a sole proprietorship or general partnership, two means of doing business that offer zero protection.
The Sutton Law Center can assist you with entity formations in all 50 states.
Please feel free to call at 800-700-1430. We will help you get set up and start protecting assets in your home state.