| It used to be true that "everyone" incorporated in | | | | geographical proximity. To incorporate a corporation in |
| Delaware due to its more favorable terms, but many | | | | Arizona requires that you file Articles of Incorporation |
| of these terms simply don't apply to startups, or the | | | | with the Arizona Corporation Commission, publish the |
| differences don't exist anymore. Most business | | | | incorporation filing in a newspaper of general circulation |
| professionals now recommend that your first choice | | | | three times, and submit an affidavit of publication back |
| should be your home state, or the state where your | | | | to the Commission. Visit their offices in Phoenix or |
| startup resides. | | | | Tucson for personal service. |
| I live in Arizona, so I'll use that state as an example. If | | | | 3. Local attorneys, if required, are more familiar with |
| your home state is Arizona, and you plan to do | | | | Arizona laws. If your company needs a complex |
| business there, following is a list of five key | | | | organizational or financial structure, the assistance of a |
| advantages of incorporating your business in Arizona: | | | | local attorney may be required. He will be familiar with |
| - Incorporation fees are low. | | | | any unique Arizona requirements for organizational |
| - The process is simple, including the convenience of | | | | structures, record keeping, capitalization, debt financing, |
| geographical proximity. | | | | role of shareholders, distributions, personal liability, and |
| - Local attorneys, if required, are more familiar with | | | | state tax considerations. |
| Arizona laws. | | | | 4. Your company automatically gets an intrastate |
| - Your company automatically gets an intrastate | | | | securities law exemption. To qualify for the intrastate |
| securities law exemption. | | | | offering exemption, a company must be incorporated |
| - No need to register as a "foreign" corporation in the | | | | in the same state where it is offering the securities |
| state of operation. | | | | and carry out a very significant amount of its business |
| There are still business considerations which might | | | | in that state. If you incorporate and do business in |
| override low cost and simplicity. For example, if your | | | | Arizona, this item alone can save you a significant |
| business is likely to be large in size soon, have a large | | | | amount of management time, paperwork, and legal |
| number of shareholders, or you have a high probability | | | | fees. |
| of going public, it might still be a good idea to | | | | 5. No need to register as a "foreign" corporation in the |
| incorporate in Delaware or Nevada due to these two | | | | state of operation. Most states have laws that require |
| states more size-friendly laws. | | | | entrepreneurs to re-register a Delaware company in |
| For the rest of us, there are distinct advantages to | | | | the state where it is actually doing business, and |
| staying close to home. Let's take a closer look at | | | | unfortunately, re-registration involves more than a few |
| some of these advantages: | | | | hours of paper work. |
| | | | But don't forget that forming the new corporation is |
| 1. Arizona incorporation fees are low. Filing fees, | | | | just the "tip of the iceberg" with respect to operating a |
| including administration fees, vary from state to state, | | | | business in the corporate form. Although it is relatively |
| but will fall anywhere from $50 in Mississippi to $410 in | | | | easy and inexpensive to incorporate a business in |
| Nevada. Arizona is close to the bottom, with statutory | | | | Arizona, I recommend that you don't hesitate to consult |
| fees of only $60. Even if you choose to add the | | | | an Arizona corporate attorney when incorporating for |
| expedite fee of $35, and consider another $100 for | | | | issues that may require legal advice and action. |
| publication requirements, the costs to incorporate in | | | | Now is the time to get started. With a little luck, your |
| Arizona are very reasonable. | | | | new startup should be up and running in 30 to 60 days. |
| 2. The process is simple, including the convenience of | | | | |