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Is Delaware the cheapest place to incorporate?

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Re: Is Delaware the cheapest place to incorporate?

#21
almost nobody needs Delaware

the reality is that there are 49 other states, half a dozen territories, and hundreds of semi-autonomous reservations a handful of which are also known to have their incorporation statutes

they haven't all stayed still over the past 30 years while Delaware’s marketing engine keeps going, they compete directly

anybody with reading comprehension can find one more favorable and cheaper than Delaware

some even have “chancery courts” just like Delaware

there are even currently obscure entity types that Delaware doesn't have, which may be more favorable. there is more than a C-Corp and an LLC out there

the same is true all around the world, all you need is incorporation cheaply and quickly, and access to domestic and international banking in the company’s name cheaply and quickly, which isn’t necessarily tied to the country your business is in.

there are infinite permutations. it is true that there are only a couple jurisdictions that excel on the cheaply and quickly part.

your real question is a lot more loaded, as you dont know what entity type you want, and dont know what state you want or why

I personally dont use Delaware, most of the time. If I am selling shares to VCs I will create a Delaware C-Corp. but even then I’ll start with an LLC somewhere else and just reincorporate when the VC is serious

I personally find Wyoming to be better faster and cheaper than Delaware, for an LLC. it depends on which registered agent you use though.

Re: Is Delaware the cheapest place to incorporate?

#22
post #13

You may want to start a Delaware C-Corp if others are investing money. That is the standard. But it is far from the cheapest way to "start a company" in the United States. Usually, it is easiest to start a "limited liability company." Smaller states compete for the lowest LLC cost. For example, Arizona, Mississippi and Missouri all charge $50 for an LLC, with no recurring fees. Kentucky charges $40, but requires a $1…

Listen to this guy.

"The business will be mostly open source and likely to have low to no revenue."

No revenue would be interesting for a UK company. Just fill a dormant status.

Delaware is not a bad option.

"What is the recommendation for a company to manage an open source project?"

Start without a company? Investments (Domain, Server) could also be tax deductible from your current income.

https://incorp.com/ is generally a good incorporation service. But in the past their administration interface required windows. Don't know how it is now.

My gut feeling: Start without a company. (I am not a lawyer).

Edit: Open in Rwanda. Free and nobody is going so sue you there for sure! :-)

https://www.visualcapitalist.com/wp-content/uploads/2021/07/...

Re: Is Delaware the cheapest place to incorporate?

#23
post #9

You'll need a Delaware C-Corp to receive funding. If funding isn't on the cards, a simple and cheap LLC is the best. Delaware C-Corp has a bunch of reporting requirements and a scary default tax treatment. It's not for the uninitiated. As someone else noted, Taiwan-based company. If you must have a US entity, LLC is the best for a one-person company. If you do raise funding or become big, it's trivial to convert to a…

Please provide references for the term "scary" and "not for the uninitiated."

Re: Is Delaware the cheapest place to incorporate?

#24

what is the point of having a company if it doesn't have any revenue?

While the limitation part is right, start-up porn may also be an issue.

My VC buddy calls all this (Business Cards etc.) start-up porn because in the end it is not important. He wants to start a open source project. Nobody is going to sue him in Taiwan as long he does no crazy things (e.g. open an auction site ibay ) or something.

Re: Is Delaware the cheapest place to incorporate?

#25

almost nobody needs Delaware the reality is that there are 49 other states, half a dozen territories, and hundreds of semi-autonomous reservations a handful of which are also known to have their incorporation statutes they haven't all stayed still over the past 30 years while Delaware’s marketing engine keeps going, they compete directly anybody with reading comprehension can find one more favorable and cheaper than…

This is excellent.

Sometimes founders and investors have more real life horror stories than attorneys because we pay the bills.

Re: Is Delaware the cheapest place to incorporate?

#26
post #8
post #7

Earlier quoted context omitted.

Before you start a Deleware C corp, discuss the idea with your lawyer. If you don't have a lawyer now, you will almost certainly wind up with one if you start a Delaware C corp because Delaware C corps have sophisticated filing requirements and non-trivial fines if you don't meet those requirements. And honestly, a Delaware C corp would be "playing house." The hard work is finding customers/users not filling out form…

Probably better to go with an LLC. In many states they are low cost and have few requirements, but still provide limits on liability and provide a professional image. If the startup becomes successful enough to need a corporate structure, then you can hire the lawyer and go the more expensive route.

I looked into this a while back and came to the conclusion I maybe/probably didn't need to do it upfront but it was cheap enough that it was probably worth going ahead and doing. As it turns out, my timeframes for doing anything with the business slid out but a don't really regret having put the LLC un place.

Re: Is Delaware the cheapest place to incorporate?

#27
I would suggest that a Wyoming or Nevada LLC is probably your best bet in terms of low fees, low taxes, and relatively decent laws.

Delaware is great if you want someone to eventually either invest in or buy your company, but the fees associated with Delaware corporations and LLCs are very high.

Re: Is Delaware the cheapest place to incorporate?

#28
post #9

You'll need a Delaware C-Corp to receive funding. If funding isn't on the cards, a simple and cheap LLC is the best. Delaware C-Corp has a bunch of reporting requirements and a scary default tax treatment. It's not for the uninitiated. As someone else noted, Taiwan-based company. If you must have a US entity, LLC is the best for a one-person company. If you do raise funding or become big, it's trivial to convert to a…

Please provide references for the term "scary" and "not for the uninitiated."

https://www.cooleygo.com/so-you-owe-thousands-in-delaware-fr...

Re: Is Delaware the cheapest place to incorporate?

#30

almost nobody needs Delaware the reality is that there are 49 other states, half a dozen territories, and hundreds of semi-autonomous reservations a handful of which are also known to have their incorporation statutes they haven't all stayed still over the past 30 years while Delaware’s marketing engine keeps going, they compete directly anybody with reading comprehension can find one more favorable and cheaper than…

> I personally find Wyoming to be better faster and cheaper than (...)

I hear that some states (or all?) require you to have someone physically in the state (and naturally some companies offer this as a service, and charge). Is that right? or are there some states without this requirement?

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