Where to incorporate and online only business if it is multi-member in 2 seperate states?

UPDATED: Sep 30, 2022

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Where to incorporate and online only business if it is multi-member in 2 seperate states?

My sister and I are starting an online business but I reside in CO and my sister is in OR. The business is split 50/50 and although my sister has a lot to do with running the business she will also be handling all the operational components in OR such as the filings, accounting, and banking. I will be handling all of the marketing, etc. along with running the business. Does it matter which state we incorporate in? Should it be in CO, OR, both or in a different state all together?

Asked on June 6, 2017 under Business Law, Colorado


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Contrary to popular belief, there is little or nothing to choose between in terms of where to incorporate: state laws in regard to corporations are all pretty much identical in every way that matters. Which one of you has easier physical assets to your state's courts? It is slightly more likely that a lawsuit against your business (if it is ever sued) will end up in the courts of the state in which it is incorporated, so you may as well go with the state where you can get into court more easily.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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