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That is your option.
Typically, the state is chosen that has either the most beneficial law or that is the most convenient.
In your case, since any lawsuit against you will likely be brought in California (assuming your actual operation is in that state), it would be more convenient and less expensive to choose California. You don't want to have to pay a California attorney to learn Delaware law.
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Thanks for your response. The reason we chose to incorporate in Delaware is because (a) the laws there are supposed to be favorable towards business, and (b) Delaware law is most widely understood and used. But now you bring up another question: "any lawsuit against you will likely be brought in California"
oh this is a chat
I did not realize that
so my question is
so how can someone who brings in a lawsuit choose a state
(we an an internet company)
You can only be sued in a state that has "jurisdiction" over you. That, primarily, occurs where your business has physical operations.
Delaware is chosen as a place to file because it has flexible formation laws, the information on the filer is private, and the filing is relatively cheap.
So, you can be sued in California because your physical presence is there, but since you are formed under Delaware law, you can choose that law as your "substantive" law or the law that will apply to any dispute over your terms of service.
Thus, the case would proceed in California, using California attorneys and a California judge, but applying Delaware law.
This happens all the time and is called "choice of laws".
But, while it makes sense to form your business in Delaware because the formation laws are flexible, it doesn't make sense to choose Delaware law as our substantive law unless you know of a difference between Cali and Delaware that is to your advantage.
i have no idea
so should we say in the terms "under california law" instead
Even so, you'd have to balance that advantage (assuming there is one) over the headache and expense of making everyone in Cali use Delaware law.
That's what I would do
ok we did not know that we can do that, now we know
appreciate your help.