Both Nevada and Delaware are popular choices for incorporating a business, due to tax benefits and other beneficial corporate laws. As a new business, you have the option to incorporate in either state, or to register as a domestic corporation in one state and as a foreign corporation in the other. Each state has unique filing requirements, as well as permitting and licensing requirements for all businesses.
Select a Business Entity
In creating a new business, you must first determine what type of business entity is appropriate. In either state, you have the option to form a sole proprietorship, partnership, corporation, or limited liability company. Each business entity has different filing requirements and tax liabilities. For guidance, view the "Legal Business Structures Table" on the Delaware's Department of Revenue website to view the differences between the business entities.
Obtain a Registered Agent
In both Delaware and Nevada, you must designate a registered agent for the business. A registered agent is an individual or business that is responsible for receiving legal documents on behalf of your business. The agent must be an individual who resides in the state, or a business that is already incorporated in the state.
Business Entity Registration
For all business types except sole proprietorships and general partnerships, you must register the business with the state. Nevada corporations and limited lability companies must file Articles of Incorporation with the secretary of state, while limited partnerships file a Limited Partnership Registration. The forms are available on the Nevada secretary of state website, and may be filed online. In Delaware, corporations file a Certificate of Incorporation, while limited liability companies file a Certificate of Formation, and limited liability partnerships file a Statement of Qualification of Limited Liability Partnership. All of the forms are available on Delaware's secretary of state website. The forms must be mailed in to the Delaware Division of Corporations. All registration for both states must include the required fee, which will varies by business type.
Foreign Business Registration
When you initially register your business in one state, your business is a domestic business in that state. If you want to do business in more than one state, you must register as a foreign business entity in all states where you want to do business. Thus, one business can be registered in both Delaware and Nevada. To register a foreign business in Nevada, you must file a Qualification to Do Business in Nevada form with the secretary of state. For Delaware, you must file a Foreign Qualification form with the Division of Corporations along with a Certificate of Existence issued by the domestic state.
Taxes and Other Requirements
If you are registered in more than one state, you will be liable for corporate tax and annual reporting in all states where you are registered. Each state may require to you apply for business licenses and permits. For example, the state of Nevada requires all businesses, domestic and foreign, to apply for a business license from the secretary of state. Nevada also requires businesses to apply for a sales tax permit, as well as gaming and liquor licenses, if applicable to your business. In Delaware, if you have employees, you may be required to register with the Division of Revenue, Unemployment Insurance, and Workers Compensation. There may be additional licensing and permitting requirements in both states depending on your business.