Both Delaware and Nevada have promoted the incorporation business because it is a source of revenue to the state and it provides business and employment opportunities. However, the benefits touted by these states, in many cases, may be more beneficial to larger companies and not as helpful to smaller businesses.

Although Nevada or Delaware may be good choices for incorporation in some cases, the best advice for smaller businesses is usually to incorporate in the state where your business is primarily located and where you do the most business.

For example, if you incorporate in Nevada but your business office is in Oregon and you do most of your business in Oregon, you will have to file and pay fees in Oregon as a foreign corporation (meaning a corporation from another state).

This cost is in addition to incorporating and paying fees in Nevada. This dual filing can be expensive and can result in more paperwork and record keeping which may outweigh any potential advantages.

The most basic and simple form is the sole proprietorship, which involves business ownership by one person or in some cases by husband and wife. Other forms include a partnership, limited partnership, regular or C corporation, S corporation, Limited Liability Company (LLC) or Limited Liability Partnership (LLP).

Corporations have sometimes been called legal fictions, meaning they exist only because the state law authorizes their existence. Corporations were first authorized by state laws to provide a form of doing business where a person could invest money in a business venture without subjecting their personal assets or property to liability.

Corporations are considered legal entities, separate and apart from the shareholders or people who own them. Thus, if a corporation is sued and the court rules against the corporation, the law allows the judgment holder to satisfy the judgment (get paid) only from the assets or property of the corporation and not the private property of the individual shareholders.

This corporate attribute is called limited liability protection. In a sole proprietorship or partnership, a judgment can be satisfied from the personal property of the individual owners of the business if there are insufficient business assets to satisfy the judgment.

Not only do corporations owe their existence to state law, but they are also governed and regulated by the corporate laws of the state in which they are incorporated and/or in which they choose to do business.

Note: If a corporation sells stock, it may also be regulated by state and federal security laws.

The corporation laws for many states can now be found online. If you need to review the corporate law in your state, the following sources may help.

For more information on state laws visit:
http://www.findlaw.com/11stategov/or/laws.html

They usually enjoyed the privileges of a monopoly. After more intensive industrial development began in the early 1800’s, the corporation proved to be an ideal structure or form for development due to its ability to raise large amounts of capital from numerous investors and yet provide centralized direction of a large industrial concern.

In the early 19th century, several states enacted general incorporation laws authorizing all general business corporations to incorporate without specific legislative approval. Then various states began to eliminate the restrictions in an effort to attract business to their state. They did so because the incorporation business provided tax revenue for the state, fees for lawyers and accountants, and revenue for local newspapers, printers, etc.

Other states followed suit in an effort to hold on to their corporate businesses. Delaware became the uncontested winner in the race to attract the incorporation business. Over one half of all corporations listed on the New York Stock Exchange are incorporated in Delaware. As a result, the Delaware Legislature and Supreme Court have become principle sources of modern corporation law.

In addition to Delaware, a second major influence on modern corporation law was the enactment of the Model Business Corporation Act (MBCA) by a committee of the American Bar Association. The main purpose of the MBCA was to attempt to standardize the various state incorporation laws. The MBCA was first published in 1950 and revised in 1984.

Many state corporation laws now closely parallel the revised MBCA although there are some differences in each state. Although most corporate regulation is found at the state level, the enactment of the Securities Act of 1933 and the Securities Exchange Act of 1934 have provided considerable regulation of the internal affairs of publicly held corporations on the federal level.