Ask YC: Incorporating

2 points·thejefe711··4 comments

We are a two person startup and each of us live in a different state. If we want to incorporate our interent company do we have to incorporate in each state? Or can we incorporate in Delaware? if we incorporate in Delaware will we have to register as a foreign entity in the states where we live?

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You only need to incorporate in one state. Which one you choose depends on many factors.

Businesses are supposed to register in each state that they do business in. This is easy to understand for brick and mortars. Any place you have a store, register with the state. It gets a little murkier with internet companies.

So, just incorporate for now. Get the limited liability. You do need limited liability so you don't lose your house, car, or anything else you may have an interest in. It is so easy to incorporate and pay the few hundred dollar fee each year, so do it.

Just incorporate in Delaware, but if you're serious, I'd recommend spending some money on a lawyer. Further, if you're not making money, you're not making giving anything of legal value so I don't see why you'd need any form of limited liability. And if you are, you can probably afford a lawyer, and you should, this is important stuff!

Have you asked yourselves: for what liability/tax/funding reason is incorporation necessary? Check out this thread http://news.ycombinator.com/item?id=244009 (there may be others). Maybe then speak with an accountant or attorney to explore options.

thanks for the help

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