Downtown Mufflers, a partnership formed by Edmundo and Javier Escobar in California, has been in operation for five years. Edmundo and Javier would like to convert the business to a corporation. They will transfer all of the assets of the partnership to the corporation once it is formed and dissolve the partnership. They are having a difficult time deciding where to incorporate the business. California seems to be the obvious choice because that is where they are located, but Oregon and Nevada are nearby, industrial rental space is inexpensive in Nevada, and the population would supply an adequate number of qualified employees if they chose to move their operation there. Oregon would be a good choice because its damp environment leads to muffler rust which necessitates muffler replacement

more often than in California or Nevada. Edmundo mentions that there are other considerations for selecting a state in which to incorporate a business. Which of the following is not a consideration for selecting a forum for incorporating a business?

A. The number of competing firms in the forum state
B. State corporate tax laws
C. State corporate laws
D. Hospitality to business


Answer: A

Business

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