QUESTION
Do I seek a lawyer based on the state where I want to incorporate my online business or the state where we''re domiciled (explanation below)?
Asked on May 31st, 2012 on Business Law - Texas
More details to this question:
I want to start an online business and want to consult with a business and tax lawyer about a number of questions including type of incorporation (C, S, LLC) and where to incorporate. Everything I''ve read online says to consult a lawyer based in the State where the business will be physically located. My conundrum is that my husband is a foreign service officer for the US government which means we live overseas. We pay our federal and state taxes as if we are in the US but I have no idea what State I would choose a lawyer in given that the business will start out as a home based US business but not physically in the states. Do I go by the state we''re domiciled in (the State all of our paperwork and taxes say we belong to) or would I go to a lawyer in the state I want to incorporate in? (I see I have to choose a state below which is exactly my confusion. I''m choosing the state we''re domiciled in for this.)
1 ANSWER
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Most of the business and tax questions that relate to an internet start-up business can be answered by an attorney anywhere. The tax questions are essentially the same nationwide, and the wisdom of selection of entity type and place of formation will likely be the same wisdom.
As a general matter, you will want to form your business in the state where it will have its principal office, which will be where it does its banking, receives mail, etc. If you form the entity in another state (including "popular" states like Delaware and Nevada, and assuming neither of those states is the "home" state of the business), you will pay franchise taxes to two states -- both your "home" state and the state in which your business is actually formed. There aren't very many good reasons to do that with a private start-up business.
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Answered on Jun 01st, 2012 at 8:40 AM