S-corp Question for the Business Pro's

[invisible777]

When you guys create an s-corp do you typically incorporate in the state you reside/operate out of?

I live in CT, but I'm looking at incorporating in Delaware for 2 reasons: one, I don't know how much longer I'll be living in CT and I'm not sure how to 'transfer' an s-corp to another state, and two, Delaware has plenty of business advantages.

So If I incorporate in DE but live in CT, who do I owe state taxes to?

 

[chrisr]

each state is different, but I am sure that there will be some registration you would go through in CT as well.

For instance, in Texas, even if I where to incorporate in Delaware or Nevada, I would have to pay fees in Texas for doing business here that where comparable to the ones you have to deal with if you incorporate in the state.

And why Delaware? i am sure you have heard they have very friendly corporate laws. That is very true and valuable to you if you plan on fighting lots of lawsuits.

Nevada traditionally has been the most aggressive in what they consider a corporate right off, which may be of more benefit to you depending on what your needs are.

 

[mesam]

Unless I'm mistaken, profits from an S-corp flow through to your personal taxes, like an LLC or partnership, and you'll pay your personal taxes in whatever state you reside. You can form your business in any state you want. There are pros and cons to some states, as mentioned above. You'll still have to file some business returns and yearly fees, but those vary state to state.

 

[$5 Submissions]

When you guys create an s-corp do you typically incorporate in the state you reside/operate out of?

I live in CT, but I'm looking at incorporating in Delaware for 2 reasons: one, I don't know how much longer I'll be living in CT and I'm not sure how to 'transfer' an s-corp to another state, and two, Delaware has plenty of business advantages.

So If I incorporate in DE but live in CT, who do I owe state taxes to?

The reason many corps are incorporated in DE is because of that state's liberal attitude towards Board liability to shareholders. If you are the only shareholder, just incorporate in your state since you avoid paying "foreign corporation" fees and hassles if you incorporated in DE (but doing business in CT).

 

[Dan Grossman]

Plus most states require that you have a physical presence there to form a business there. You'll have to pay someone to be able to receive legal documents for your business at an address in that state.

Just form your company in your own state.

 

[gdubs12345]

Ive heard of people incorporating in nevada, because they dont have state taxes. But i think it can be risky and you might have the gvt coming afetr you for back taxes.

 

[aim]

They laws are a little grey and you can spend an entire day looking over the facts. The biggest obstacle you face with incorporating om States such as Nevada is making use of your company's earnings without it hitting your personal income. Because sole owned LLCs and S-Corps are all pass through, it's almost always going to hit your personal income. Even if you distribute dividends of a Nevada corporation to yourself you're still legally liable for taxation.

Lately I've been looking into moving my s-corp over to Wyoming

Compare Wyoming

 

[Todd]

Every state is different. Many states say that if you incorporate in another state but do business in their state, you must pay taxes in their state since you are operating a foreign corporation in their state. For example, if you run a Nevada s-corporation out of the state of California you owe taxes to California. Definitely get the advice of a CPA or tax pro though, it will be worth the $100-$200 they charge you!