How to Incorporate Outside Your Home State

A corporation is legal entity that protects its owners and shareholders from individual liability. Tax incentives also motivate individuals to incorporate their business. Each state has specific laws governing the process of incorporating a business. It's worth keeping in mind that you can incorporate your business outside your home state.

Instructions

Difficulty: Moderate

1. Visit the USA.gov Web site (see Resources, below) to access the state department of the state in which you wish to incorporate. There you will find information on the forms and fees you will need in order to file for incorporation in your chosen state.
2. Determine whether the name you wish to use for your corporation is available. Each state follows a different procedure, but almost all require submitting a letter of inquiry to the state department of the state in which you want to incorporate. Online services also offer to do fast name checks, usually for a fee.
3. Reserve a name for your corporation. Submit a Name Reservation Request form (or equivalent) to the state in question. Most states require a fee for processing.
4. Complete and file the Articles of Incorporation for your corporation. Answer all questions on the form, including the number of managers or officers and the name of the company and the name of the agent who is filing on your corporation's behalf.
5. Expect the process to take at least 6 weeks to complete. Some states are known for completing the incorporation paperwork in 2 to 4 weeks, while others can take 8 to 10. Once completed, watch the mail for a copy of the Articles of Incorporation as approved by the state, as well as your Employer Identification Number (EIN).

Tips & Warnings

• While not required, it is recommended that you hire legal counsel when trying to incorporate outside your home state. Attorneys in the state in which you wish to incorporate are better equipped to answer your questions than those in your home state.
• File the papers required to incorporate using the Internet. It will save you by limiting the amount of travel you have to undertake in order to incorporate.
• Learn the specific tax laws of the state in which you intend to incorporate. They are likely different from your home state. Also, be aware that there may be tax laws that affect corporations incorporated outside your home state.