You are forming, or have formed, a company and have selected your entity type; Now – where are you doing business? What state will be your home state? Which other states will you need to get authority to do business in?
If your home state is Delaware, you will benefit from the advantageous legal protections afforded in the state for businesses and business owners. Businesses located outside of the state can also choose Delaware as their legal home. There are many situations where this is the best option, but it isn’t always, so it is important to investigate all the pros and cons of incorporating in Delaware versus your home state. Make sure that, even if you are incorporated in Delaware, you are properly registered to do business in your home state. It is important to make sure you have the proper licensing and are reporting properly to all states, counties, cities and towns you do business in.
Non-profits need to do their due diligence before they set up shop. Certain states, such as Maryland and Pennsylvania, have reporting requirements when revenues are over a certain dollar amount. For example: If a Pennsylvania based non-profit receives a donation of stock greater than $200,000, they would be required to have a review report prepared by a certified public account. This cost can take funds away from the mission of the non-profit and allocate them to covering high administrative costs.
Keep in mind that you may not have to file taxes in a state you are registered in if there is no filing requirement. For instance: For the many businesses set up in Delaware, but without operations in Delaware, a tax return is not required.
Professionals, such as your accountant, lawyer and registered agent can help provide you with the needed information to help you make the best decisions for your business.
