It's beginning to look at bit like Incorporating Season
Around this time of year, people who have been toying with starting a business decide to get serious and incorporate as of January 1. But there are questions. What about incorporating in Delaware or Nevada - you always hear about those states. Why? And how do you hit the ground running on 1/1/2008 if you file your articles of incorporation on 1/1/2008?
The short answers to these questions are: If you're going to do business in California, incorporate in California. Period. If you incorporate in Nevada, but work out of California you still have to pay California income tax, but now you also have to do two sets of filings, one in Nevada and one in California. As for Delaware... that would be a no also.
And it's easy in California to "hit the ground running" on January 2. Normally if you are incorporated for even a teeny tiny bit of a year in California, you are liable for the whole year's minimum corporate franchise tax. But, you can incorporate in the last 15 days of the year, and get your paperwork ready to go, without being liable for 2007 if you don't actually do any business, just use the time to get your articles filed and your paperwork all organized.
That way, come January 2, you can start the new year with your new corporation all set up.
