Ask YC: Incorporating with founders in different states

2 pointsthejefe7111 comment

We are a two person internet startup, and we live in different states, Texas and Virginia, communicating over the internet to do this startup. When we go to incorporate our company should we incorporate in Delaware? If so, will we have to register our corporation as a foreign entity in Texas and Virginia? Or should we just register our corporation in Texas and Virginia?

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The best answer really depends on what your long term plans are. If you plan to seek funding and investments, then incorporating in DE is in your long-term best interests. If you plan to bootstrap things and keep it more simple, then the state you incorporate in is less significant, as you won't really be doing much from a legal perspective.

As far as registering in the multiple states that is also more important when there is actual cash flow. If you're in the early stages of development and cash burn, there is less valuable in making your legal work more burdensome.

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