If I’m starting an S-Corp in with single shareholder and it is an e-commerce company that sells just a service, should I incorporate in NC or DE?

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If I’m starting an S-Corp in with single shareholder and it is an e-commerce company that sells just a service, should I incorporate in NC or DE?

In starting the corp in N.C. Should I incorporate in N.C. or DE? Only the EIN has been completed at this point. It won’t be selling any products, just a service.

Asked on June 13, 2017 under Business Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

There really is no difference to where you incorporate: at this point, the laws pertaining to corporations (and, for that matter, LLCs) are essentially the same throughout the country. For large businesses with complicated structures or which may be involved in complicated litigation, there is a small advantage to DE: because of how many large corporations incorporate there, the DE courts are very familiar and comfortable with corporate issues, but that is not likely to be important for the company you describe. For your purposes, since you'd presumably rather not travel to DE to take advantage of their courts' expertise if sued or suing, you may as well incorporate in your own state, to make sure you can't be hauled into court in another state simply because you registered there.


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