| I live in a state, lets say, California. From what I understand there is alot of people there. ;) http://www.sos.ca.gov/business/be/faqs.htm#form-question7
If I do business with anyone in California, as an employee who lives and works in California, I'm engaging in intrastate commerce on behalf of the company. I'm also "doing business in California" as I'm paying over $50k in wages for tax purposes [since Engineers are going to be at least that anyway]. So, now I have to: 1) Incorporate in Delaware, Register as a Foreign Business Entity in California. 2) I need to pay for a registered agent in both states. 3) I need a lawyer familiar with laws in both states or 2 different lawyers. 4) If I do business in Delaware [since incorporation in Delaware makes it intrastate business], I now have a tax nexus in two states which complicates my tax situation. 5) There is no tax or legal obligation to do this, so why shouldn't a person wait until they have to add this complexity? That is two sets of fees, tax structures, and potentially legal counsel I now require. If I've got 7 figures in funding, sure, this is not a big deal. If I'm bootstrapping with the $20k I have in my savings account, suddenly doubling these costs is not insignificant and may potentially sink me and/or cause me to fail a tax audit with the associated expenses. I'm uncertain why you think it is 'always' a good idea to do this from the start. Please explain how my reasoning is incorrect as I am not a lawyer. Thank you. |
I think HN really needs to track downvotes if only because it is intellectual cowardice to try to bury a dissenting voice without explaining why.