Discuss the important factors to consider in deciding where to incorporate a business.
What will be an ideal response?
Frequently, the corporation will be incorporated in the state where most of its business will be conducted. However, if the enterprise is conducting its affairs in interstate commerce, the promoters may decide to incorporate in a state other than the state in which the principal offices are located. Many large corporations shop around for the state that will offer the most benefits to the enterprise. Two fundamental considerations frequently arise when the promoters are trying to decide where to incorporate. First, the business may be incorporated in a state where the incorporation fees, taxes, annual fees, and other charges tend to be lower. Second, the promoters may decide to incorporate in a state where the corporation statute and judicial decisions grant management considerable freedom from shareholder interference in the operation of corporate affairs. Traditionally, Delaware and, more recently, Ohio have been attractive states for incorporation.
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