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> Incorporating in a state such as Delaware, Nevada or
> Oregon where the initial incorporation costs are low can end up costing you
> lots of money and time in the long run. California has some stiff penalties
> if you try to pass yourself off as an out of state business when your main
> business activities are in California. It is much better to incorporate in
> your home state. Playing the "Delaware" game is only for the bigger
> companies.
Not necessarily true. It took us all of 48 hours and $300 to get ourselves set
up as an LLC in Delaware, while we were in California. We knew we would have to
pay California taxes, but the whole setup procedure in California would take
much longer. California's "stiff penalties" are imposed if you try to avoid
paying taxes ($800 per year minimum) as an entity doing business in California,
but that's normal for income taxes. We now pay an annual registration fee to
Delaware in the neighborhood of $50, plus the normal taxes in California. And I
highly recommend 'playing the Delaware game.'
