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Can anyone with experience say something about this? I would be interested in knowing what kind of difference it makes.

by davidblair 17y ago

deleted 17y ago
[deleted]
- smanek 17y ago
  Your anecdote is a reason why I shouldn't incorporate in California. It isn't a reason why I should incorporate in Delaware.
  - deleted 17y ago
    [deleted]
- daeken 17y ago
  I agree with your sentiment overall, but "fucking moron" takes it a bit too far. Most entrepreneurs make far bigger mistakes without it having a significant impact. In most cases, where you incorporate has very little impact down the line, and when it does, you probably should've been taking advice from a business lawyer in the first place.
  - fatdog789 17y ago
    State of incorporation always affects the bottom line, immediately. It determines what legal requirements you must satisfy in organization and funding your business, including who your investors can be. It determines what taxes you pay, what tax credits you may qualify for, whether you can qualify for special small business contracts that many state governments restrict to small businesses within their own state. It also plays a large role in whether banks will provide business loans: many banks will not loan money to small businesses that operate in the bank's state but which are headquartered in another.
grellas 17y ago
Missed the exchange involving the deleted comment but I want to emphasize that the point of my article is to think it through rather than just being reflexive about Delaware. I am not anti-Delaware. Just don't do Delaware unless it really makes sense. The reason I used the title "why not to incorporate" in Delaware was just to emphasize that those who read the article will hear the other side of the argument as well as the usual pro-Delaware argument. We incorporate many of our clients in Delaware when they desire it after understanding the trade-offs and issues. We just don't herd them into it without explanation.
- kragen 17y ago
  Someone was saying that California almost didn't let them have the share structure they and the VCs had agreed on, and it almost killed the deal.

Can anyone with experience say something about this? I would be interested in knowing what kind of difference it makes.

deleted 17y ago

[deleted]

smanek 17y ago
Your anecdote is a reason why I shouldn't incorporate in California. It isn't a reason why I should incorporate in Delaware.
- deleted 17y ago
  [deleted]
daeken 17y ago
I agree with your sentiment overall, but "fucking moron" takes it a bit too far. Most entrepreneurs make far bigger mistakes without it having a significant impact. In most cases, where you incorporate has very little impact down the line, and when it does, you probably should've been taking advice from a business lawyer in the first place.
- fatdog789 17y ago
  State of incorporation always affects the bottom line, immediately. It determines what legal requirements you must satisfy in organization and funding your business, including who your investors can be. It determines what taxes you pay, what tax credits you may qualify for, whether you can qualify for special small business contracts that many state governments restrict to small businesses within their own state. It also plays a large role in whether banks will provide business loans: many banks will not loan money to small businesses that operate in the bank's state but which are headquartered in another.

grellas 17y ago

Missed the exchange involving the deleted comment but I want to emphasize that the point of my article is to think it through rather than just being reflexive about Delaware. I am not anti-Delaware. Just don't do Delaware unless it really makes sense. The reason I used the title "why not to incorporate" in Delaware was just to emphasize that those who read the article will hear the other side of the argument as well as the usual pro-Delaware argument. We incorporate many of our clients in Delaware when they desire it after understanding the trade-offs and issues. We just don't herd them into it without explanation.

kragen 17y ago
Someone was saying that California almost didn't let them have the share structure they and the VCs had agreed on, and it almost killed the deal.