As usual, Delaware was the first (again Delaware may be a little expensive at first, but they are the best state, in my opinion, to do the kind of thing you are trying to do - raise capital, have multiple locations, access to excellent business attorneys, angel investors, investment bankers & underwriters are familiar, etc., etc.)
After that the analysis starts to have to do with each state's requirements (some, for example, require that the home-office of your business be physically located in that state, and ALL will require an authorized agent in that state or at least registration as a foreign entity if you are not organized there) ... AND ... what it is you are trying to accomplish.
Which tax benefit, as well, is not always a simple question .. Probably the easiest to measure is which states don't have a state income tax (although, when adding issues such as organizational filing fees, ongoing registration costs, etc. ... a state that makes it easy to do business in other ways and has a relatively low income tax may actually provide more value ... and finally, remember that the state tax numbers are not on the same level at all as federal income tax, so again it's net benefit and trade off issue)
But with that said, you can go here to see every single state and it's various tax rates:
(designed initially for those picking a state in which to retire, but provides a map that will take to every states taxes, rates, property tax rates, sales tax rates, ... lots of good information
But first just to distill it a bit, here are the states that have NO income tax:
· South Dakota
But, a word of caution; again, your overall taxes paid may not necessarily be less in a state where there is no income tax. States need revenue to function, and these states will have to make up for the lack of income tax somehow. New Hampshire and Texas, for example, make up for it in property taxes. Both states have some of the highest PROPERTY taxes in the nation. The cost of higher property taxes, sales taxes, fuel taxes, and other taxes could amount to higher overall taxes in some of these states.
Here's the site that will let you look at MANY of those issues, state by state:
No, the series are LLC's (Limited Liability Companies). And Limited Liability Companies are, as we discussed before, are taxed as sole proprietorships if there's just one owner (called MEMBERS in LLC language) and as partnerships if there are multiple members (owners). ... HOWEVER, these entities can ELECT to be taxed as an S-Corp or a C- Corp, depending on what you're trying to do.
The LLC, again, taxed in its default fashion, is the best of both worlds (providing the limited liability of a corporation along with the flexibility of a partnership).
Corporations are much more rigid in what can be done ... there must be directors, officers, meetings with minutes, articles of incorporation, by-laws and each state has very specific rules about what corporations can do in their state.
An S-Corp (again a TYPE of hybrid, because it IS a corporation, from a state/business entity law perspective, but is not taxed at the business level ... taxes PASS THROUGH to the shareholders just like taxes pass through to LLC members) ... for example .. MUST pass profits to its shareholders in proportion with the percentage of ownership ( a person who owns 10 shares of an S-Corp that has 100 shares outstanding will always get 10% of the profits and 10% of the losses) ... where in an LLC you can design the sharing of income, loss, return of capital, ability to liquidate, etc., ANY way you would like in the LLC operating agreement.
And remember C-Corps (really the only entity besides IRRevocable trusts that are taxed at their own rates, don't get the benefit of different, lower, capital gains rates, and whose profits are taxed twice by the time they reach the owners back pocket) have a lot of that same rigidity, in terms of the statute law of the state they're organized in.
That's why I recommend LLC as the starting point ... again, pass-through taxation and flexibility like a sole proprietorship or partnership and the limited liability of a corporation.
AND you can always elect to be taxed as an S-corp or a C-Corp in your LLC later ... doing it the other way around requires dissolution of your corporation, merger, or some sort of sales transaction, essentially much more complicated.
Hope this helps
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