Should I file my startup in Delaware if it’s located in Texas?

My answer to Should I file my startup in Delaware if it’s located in Texas?

Answer by Wray Rives CPA CGMA:

If you will operate your Texas startup from Texas, you will have to be registered in Texas no matter what.

The only reason to register in DE is because you intend to seek outside investors within the first year.

Here is your decision flow chart:

  • Will you seek outside investors?
    • NO-register in Texas-end of decision tree
    • YES-continue to the next step
  • Will you seek outside investors within the first 12 months?
    • NO-register an LLC in Texas and later do a Section 351(a) exchange into a DE Corporation
    • YES-Register a DE Corporation and then register the DE corp as a foreign entity with the State of Texas.

Should I file my startup in Delaware if it’s located in Texas?