If you’re going to start a business in the United States, you may think about incorporating or registering it. This means that:
- You file an application, which gives a state notice that you want to create a company, and
- The state reviews that application and, if you met all the requirements, it officially registers your business in its database.
Once approved by the state, you’ll have a brand new business entity that stands separate and apart from you as an individual.
Incorporation/registration isn’t required, but there are some benefits to doing so.
Businesses are incorporated/registered with the Secretary of State’s office (or an equivalent office, depending on the state) where you have an address and plan to do business. The Secretary of State’s office is responsible for all kinds of things, including elections, keeping official state records, and, most importantly for you, incorporating companies and managing the state’s trademark registration process.
You don’t have to incorporate or register your business in the state where you live, but it can make sense for many people. This is because you’ll have to identify a “registered agent” with an address in the state to receive legal notices about your business (this may come from the Secretary of State, court system, or other state agencies or offices).
Many people starting out use themselves and home address for this purpose. Another common registered agent choice is a lawyer/law firm.
In choosing the state where you incorporate or register your business, considerations include:
- Secretary of State application fees
- Annual filings and fees
- State taxes (including state income taxes and franchise taxes)
- How friendly the state’s laws and courts are to businesses (this is why you hear about Delaware, Wyoming and Nevada as “business friendly” states, and why many companies are incorporated there)
- Investor strategies (some investors may even require that a company is incorporated in one of the three states mentioned above)
Each state has its own requirements, fees and taxes, and there’s a Secretary of State or something like it in nearly every state and U.S. territory.
Peep the list below for all of the Secretary of State offices and their contact information. You can view and download the full directory via Google Sheets by clicking this link.
If you’ve gone through this process, drop a comment and let us know about your experience!