I am starting a b2b service company mainly servicing my state (Massachusetts) and then eventually going multistate. Is the best strategy …

Answer by Wray Rives:

First I would suggest you understand the "advantages" to Delaware incorporation, which are legal and not tax related.  If anything it is a tax disadvantage to incorporate in Delaware and operate in another state.  If legal protection and choice of venue in the event of you and your business being sued are a significant consideration, then I would suggest you speak with an attorney first about that situation.

As for incorporating in Massachusetts, if you intend to operate the business from Massachusetts, then you will have nexus in Massachusetts and thus need to register the company in Massachusetts and pay tax to Massachusetts, regardless of where it is incorporated.

In summary the answer is if the legal issue is controlling for your business and you determine you will need to register in Delaware eventually, then go ahead and register in Delaware.  If the legal issue is not controlling, then register in Massachusetts and save yourself the hassle of having to file tax returns in two states, until you expand the business beyond your home area.

I am starting a b2b service company mainly servicing my state (Massachusetts) and then eventually going multistate. Is the best strategy …