Info needed on doing business in a foreign state

ckpeter · #1 06-30-2001, 10:52 PM

Hi, I am wondering, if I am starting a web hosting business, and I choose to incorporate in another state, do I have to do anything in my own state? I live in IL but I have heard good things about delaware incorporation. If I do choose to incorporate there, do I need to register in my own state? since I am doing web hosting business and I am operatoing over the net, would that qualify as not doing business in a state?

Thanks,

Peter

David@Digisurge · #2 07-03-2001, 02:17 PM

Try going to Deleware's and your own state's secretary of states web site. They often have a lot of answers.

davidb · #3 07-03-2001, 04:02 PM

I just incorperated in IL, whats so different about delaware

Duster · #4 07-03-2001, 04:26 PM

If you'd done your homework, you'd know. Delaware has more corporations registered than any other state. There are several reasons why this is true. One is that the corporate officers are not required to be disclosed. Another is that a Delaware corporation can only be sued for gross negligence, not mere negligence.

The state of Nevada now has similar laws.

ckpeter · #5 07-03-2001, 04:40 PM

My question is, as someone who operates over the internet? what am I subjected to? Am I considered doing business in IL even though I am only physically located in IL and operating over the web?

Thanks,

Peter

Duster · #6 07-03-2001, 10:57 PM

Probably not, though you should check with the Illinois divison of corporations to be sure. You should also check with the dept. of revenue if you have a state sales tax and services are taxable. You might have to get a sales tax certificate.

Other than that, be careful with such things as selecting a bank. Some are more up to date than others on Internet businesses. I passed on any that required an occupational license. I couldn't see having to pay about $500 a year to the city I live in when I wasn't really conducting business here in the typical sense. I wasn't about to pay them $500 just because I get mail and answer the phone in their city. My server wasn't even located in the same state as me at the time.

Obviously, I chose a bank that did not require an occupational license, only being registered with the division of corporations.

TradeViceroy · #7 08-09-2001, 11:00 PM

I've been thinking of doing something like this also. However, I'm in Texas.

I would like to form a LLC or a LLP. However, state fees in Texas are one of the highest in the country. My partner lives in Florida and I've been thinking of registering there. However, from reading this post, it seems going with Delaware might be an option too.

I live in Texas, my partner lives in Florida, and our server is located in Maryland. What would be the best way to form either a LLP or LLC without paying a fortune? What's the best state?

Dollac · #8 08-09-2001, 11:36 PM

I am sure that the United States are different tha Canada, but as far as I can remener up here you are considered doing buisness is the place that you are physically located (ie. office, where you preform job duties). If you are renting servers, etc. from some place outside your state it should not make a difference.

Here is how I look at it. I once managed a pizza resturant franchise and I got some off our vegtables out of the States, does this mean I was running a business in the States, nope a was using a company in the States as a supplier. I do not see how running a hosting business can be different since in theroy the only thing that has changed in the two situations is what is being supplied.

smartbackups · #9 08-09-2001, 11:44 PM

You can incorporate anywhere, you will need a business license where you physically do your business. Some localities require licenses by county or city. You would have to check with your locality for that. However being incorported in Delaware has it's benefits, their courts favor heavily towards corporations, corporate tax is very very low. One of my previous clients http://www.corpamerica.com has a chat room during business hours (eastern time) , I believe http://www.incorporate.com has a similar chat room too. They can answer very basic answers as well as register online as well. What you will need in the state you incorporate in is a Registered Agent. Their fee is pretty cheap, but is necessary if you don't live in the state you incorporate in. There are some really useful FAQs on each site as well as why Delaware is the best state to incorporate in, etc. Heck I liked the corporate laws here and no state taxes so much I moved here.

TradeViceroy · #10 08-09-2001, 11:50 PM

Quote:

Originally posted by Dollac
I am sure that the United States are different tha Canada, but as far as I can remener up here you are considered doing buisness is the place that you are physically located (ie. office, where you preform job duties). If you are renting servers, etc. from some place outside your state it should not make a difference.

Here is how I look at it. I once managed a pizza resturant franchise and I got some off our vegtables out of the States, does this mean I was running a business in the States, nope a was using a company in the States as a supplier. I do not see how running a hosting business can be different since in theroy the only thing that has changed in the two situations is what is being supplied.

You beat me to it smarkbackups!

Here's some evidence to back up the claim:
http://www.state.de.us/corp/q&a.htm#DE_Resident

Delaware is looking better ever minute now. The cost to form a LLC there is VERY cheap.

Later!

TradeViceroy · #11 08-09-2001, 11:52 PM

Forgot to mention that if you incorporate, etc. in another state, the state usually requires use to have a registered agent located in the state.

There's several companies out there that provide this service.

smartbackups · #12 08-09-2001, 11:54 PM

I learned quite a bit while I worked for them. I have some good friends at corpamerica.com, ask for Terri if you do go with them.. I also know Pat at the state, she is a really big help too.

Heh I will be anyones registered agent for 50% of what they will charge.