State selection myths are everywhere. Delaware is best. Nevada is best. Home state is always wrong.
Most businesses believe myths. They choose wrong states. They pay more. They create problems.
Myth-busting reveals truth. Delaware benefits. Nevada benefits. Home state benefits. Each fits different situations.
This comparison shows which state is best for your business by comparing Delaware, Nevada, and your home state.
Key Takeaways
- Understand myths—learn common misconceptions
- Compare states—see real differences
- Evaluate fit—match to your situation
- Choose wisely—select best state
- Form correctly—follow requirements
Table of Contents
State Selection Overview
State selection affects your business. Taxes. Compliance. Operations. All change by state.
Myths are common: Delaware is always best. Nevada saves taxes. Home state is always wrong.
Reality is different: Each state has benefits. Each has costs. Each fits different situations.
Why this matters: Selection understanding enables decisions. If you understand selection, decisions improve.
Common Myths
Several myths exist about state selection. They’re widespread. They’re misleading.
Myth: Delaware Is Always Best
The myth: Delaware is best for all businesses. It’s always the right choice. It saves money.
The reality: Delaware benefits some businesses. It costs more for others. It’s not always best.
Why this matters: Myth understanding prevents mistakes. If you understand myths, mistakes decrease.
Myth: Nevada Saves Taxes
The myth: Nevada eliminates all taxes. It’s a tax haven. It saves money.
The reality: Nevada has benefits. It doesn’t eliminate all taxes. It’s not always cheaper.
Why this matters: Myth understanding prevents mistakes. If you understand myths, mistakes decrease.
Myth: Home State Is Always Wrong
The myth: Home state is always worse. You should form elsewhere. Home state costs more.
The reality: Home state often works. It’s simpler. It’s cheaper for many businesses.
Why this matters: Myth understanding prevents mistakes. If you understand myths, mistakes decrease.
Pro tip: Use our TAM Calculator to evaluate market opportunity and inform state selection. Calculate market size to understand potential.
Delaware Reality
Delaware has real benefits. It also has real costs. It fits specific situations.
Delaware Benefits
What Delaware offers:
- Established case law
- Business-friendly courts
- Corporate expertise
- Investor familiarity
Why this matters: Benefit understanding enables evaluation. If you understand benefits, evaluation improves.
Delaware Costs
What Delaware costs:
- Higher franchise taxes
- Additional compliance
- Registered agent fees
- Annual report fees
Why this matters: Cost understanding enables evaluation. If you understand costs, evaluation improves.
When Delaware Fits
When to choose Delaware:
- Raising capital
- Planning to go public
- Complex corporate structure
- Investor expectations
Why this matters: Fit understanding enables decisions. If you understand fit, decisions improve.
Nevada Reality
Nevada has real benefits. It also has real costs. It fits specific situations.
Nevada Benefits
What Nevada offers:
- No corporate income tax
- Privacy protections
- Business-friendly laws
- Lower initial fees
Why this matters: Benefit understanding enables evaluation. If you understand benefits, evaluation improves.
Nevada Costs
What Nevada costs:
- Annual fees
- Registered agent required
- Additional compliance
- Business license fees
Why this matters: Cost understanding enables evaluation. If you understand costs, evaluation improves.
When Nevada Fits
When to choose Nevada:
- Privacy important
- No corporate income tax benefit
- Business-friendly environment
- Lower initial costs matter
Why this matters: Fit understanding enables decisions. If you understand fit, decisions improve.
Home State Reality
Home state has real benefits. It’s often simpler. It’s often cheaper.
Home State Benefits
What home state offers:
- Simpler compliance
- Lower costs
- Local familiarity
- Easier operations
Why this matters: Benefit understanding enables evaluation. If you understand benefits, evaluation improves.
Home State Costs
What home state costs:
- State taxes apply
- Local compliance
- Standard fees
- Normal requirements
Why this matters: Cost understanding enables evaluation. If you understand costs, evaluation improves.
When Home State Fits
When to choose home state:
- Simple business
- Local operations
- Cost matters
- Simplicity preferred
Why this matters: Fit understanding enables decisions. If you understand fit, decisions improve.
Choosing State
State selection requires evaluation. Compare options. Choose strategically.
Evaluate Your Situation
Assess your needs:
- Business type
- Growth plans
- Tax situation
- Compliance capacity
Why this matters: Situation evaluation enables selection. If you evaluate situation, selection improves.
Compare Options
Compare states:
- Compare benefits
- Compare costs
- Compare requirements
- Compare fit
Why this matters: Comparison enables decisions. If you compare, decisions improve.
Choose Strategically
Select best state:
- Match to needs
- Consider costs
- Evaluate benefits
- Choose wisely
Why this matters: Strategic selection enables success. If you select strategically, success improves.
Pro tip: Use our TAM Calculator to evaluate market opportunity and inform state selection. Calculate market size to understand potential.
Your Next Steps
State selection requires understanding myths and reality. Understand myths, compare states, evaluate fit, choose wisely, then form correctly to follow requirements.
This Week:
- Begin understanding state selection myths using our TAM Calculator
- Start comparing Delaware, Nevada, and home state
- Begin evaluating your situation
- Start choosing state
This Month:
- Complete state comparison
- Evaluate your needs
- Choose best state
- Begin formation process
Going Forward:
- Continuously evaluate state choice
- Monitor costs and benefits
- Adjust as needed
- Maintain compliance
Need help? Check out our TAM Calculator for market evaluation, our state-by-state guides for requirements, our state reference library for details, and our state expansion guide for multi-state operations.
Stay informed about business strategies and tools by following us on X (Twitter) and signing up for The Initiative Newsletter.
Sources & Additional Information
This guide provides general information about state selection. Your specific situation may require different considerations.
For market size analysis, see our TAM Calculator.
Consult with professionals for advice specific to your situation.
