Entity State Selection

January 20, 2025

by a searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School in Austin, TX, USA

For Operators/Searchers that have operated in the past:

Particularly for regional businesses, have you seen a significant benefit from registering your NewCo in the state the OldCo has been operating in? If a lot of the appeal of the business' brand is that it is "local", how do you preserve that if you are registered in Delaware? I know some states have programs just for businesses registered in the state. Or is Delaware always the best option to register your business?

Reply by a professional
from George Washington University in Raleigh, NC, USA

In addition to Fareed's comments on corporate legal guidance, there may be tax reasons as well. I depends on a lot including your plans for the future and/or sale of the business down the road. You'll want to share these details with an attorney and/or tax advisor. As a native Texan and fellow Tar Heel, I wish you all the best!

Reply by a lender
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

In many states if you are primarily operating in that State but your entity is registered elsewhere, you may need to register as a foreign entity in the State you are operating in for licensing purposes. I am not an attorney, but I have seen this required in some states in the past. Just something to keep in mind.

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