Business Formation

Each state charges different filing fees for incorporation. California is three times the cost of New York State because an $800 initial minimum tax payment is required in addition to other charges. The fee your CPA charges for incorporating usually includes these disbursements made on your behalf.

Most small businesses choose their home state to incorporate or the state they are doing business in. Delaware and Nevada have laws that protect corporation officers and directors from various litigation. Also, some other states have higher taxes on capitalization. However, if you incorporate in Delaware or Nevada, you will still be required to file and register as a foreign corporation with the Secretary of State in the state you are doing business. This will result in increased incorporating fees charged by your CPA. If you intend to maintain your business in only one state and do not anticipate going public or raising money through a private placement, then incorporate your company in the state you are doing business and forget about Delaware or Nevada for now!