Many small businesses prefer to incorporate or form an LLC in their home state. Typically, it’s less complicated and most cost effective to incorporate in the state where you’re planning to operate your business. Unfortunately, keeping things simple and asset protection are inversely related. In many situation Delaware and Nevada do offer advantages that may be appropriate for your business. For more details go do www.nvinc.com/

If you incorporate outside your home state, you still may be required to qualify to do business in your home state. The cost of a local incorporation will usually be less than incorporating in another state, and then qualifying to do business in your home state as a “foreign” (out of state) corporation.

If you have a partner and/or business activity in more than one state, you’ll have to decide where to domicile your corporation or LLC, and again, register as a foreign corporation or LLC doing business in the state where the activity occurs. That decision should be based on multi-state taxation rules and registration requirements, which vary from state to state.

Delaware and Nevada are often cited as the best states in which to domicile (or form) your new business. Both states have advantages, but not all may apply to your situation.