Sole Proprietor vs LLC? What do you do?
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Allow Me to Introduce Myself
There are 2 reasons why people generally register a Corp in Delaware - taxes and case law.Taxes in DE are reasonably cheap for coporations, thus a big advantage to those that generate high revenues and can off-set the additional costs of doing business in DE.Case Law - case law in DE is highly favorable to Corps and there is a LOT of case law there to back up and educate you on how things will go in the state. Not all states have such history and puts a lot more of the decision in the hands of the judges and jury. This is especially important if you ever intend to raise significant amounts of capital for your business (>$1,000,000), plan to merge with another business or expect to go public at some point.That said, DE does not have a lot of case law on LLC's since they are a reasonably new form of entity. Furthermore, registering in DE does not (in the case of NY) remove the requirement for publishing in NY. In fact, even if you register in DE, you'll still need to register in your state as a foreign entity and follow all the rules and regulations regarding that. In NY, for instance, you still have to publish.In many cases, registering in DE, NV, MT or other states other than your home state doesn't really make sense and ends up costing you more in the long run. If you're not very familiar with the laws of both states or the accounting rules that apply, do yourself a favor and speak with an attorney that is. It's not as cut and dry as people make it out to be.Worse comes to worse, you can always fix it. It's not cheap, but you can move corporate entities around if you need to.Zeke
