If I live in California, can I register my business (LLC or S-Corp) in a different state such as Minnesota or Delaware?I plan to do business...

Question

If I live in California, can I register my business (LLC or S-Corp) in a different state such as Minnesota or Delaware?

I plan to do business in multiple states because I may have clients located anywhere. However, I primarily expect my clients to be located in San Francisco Bay Area and Minneapolis to start.

Answer

Yes, you not only can you, you most likely must register in each state in which you do business. It sounds like your best bet will probably be to incorporate in California and register as a foreign corporation doing business in Minnesota. Everyone thinks Delaware is some magic place for incorporating, but the fact is that is only for large publicly traded companies due to Delaware's very management friendly securities and corporate governance laws. For a small business doing business in MN and CA there is no advantage to being incorporated in DE and it adds a layer of complexity and expense, since you still have to register in MN and CA as a DE corporation doing business in each state.

Answer

I agree with Mr. McCormick, but I would like to add a another thought or two. There may be advantages to incorporating in one state versus another, but more information would be needed to come to a conclusion and it may be based on your locale and other factors. As Mr. McCormick stated, you have options where you can form the corporation (or other business entity), but you still will have comply with state (and perhaps local) rules, regulations and laws in the states were you conduct business. I am licensed in both Minnesota and California.