The advantages of incorporating here include: The state offers some tax benefits. Delaware doesn’t impose income tax on corporations registered in the state which don’t do business in the state. Also, shareholders who don’t reside in Delaware need not pay tax on shares in the state.
Can I open an LLC in Delaware if I live in California?
Yes, if your Delaware LLC is operating in California, then you’ll need to pay California taxes on your company income, on top of your Delaware taxes. Note that you’ll also need to complete the process of filing (and paying for) foreign qualification for your Delaware LLC if your business operates in California.
Can a Delaware corporation be sued in California?
However, a Delaware corporation in California would not benefit from the intrastate exemption to federal securities laws. Delaware corporations are also subject to lawsuits in Delaware. On the other hand…
How much does it cost to file a Delaware corporation?
The Delaware corporation must pay to file in Delaware and must pay to run the corporation in California, which amounts to extra money in filing fees and extra administrative duties. The Delaware corporation must also maintain a registered agent in Delaware, which usually costs around $100 a year.
Can a Delaware corporation benefit from the intrastate exemption?
The intrastate exemption to federal securities laws can make certain finance transactions and equity compensation a bit easier and cheaper to accomplish. However, a Delaware corporation in California would not benefit from the intrastate exemption to federal securities laws. Delaware corporations are also subject to lawsuits in Delaware.
Can a California corporation convert to a foreign corporation?
Unfortunately for many corporations, California is one of a handful of states that does not recognize the concept of conversion and thus will not allow a domestic corporation to convert into what it deems a “foreign” corporation. That means that to reincorporate a California corporation, we need to get creative.
