Incorporating: Classify "Doing business in"?


I've been looking into incorporating with a partner, and we're both in different states, and obviously looking over Delaware's incorporation laws.

With incorporation, each state says that you need to file for registration within each state that you want to "do business in".

Does this "doing business" include having employed workers?

Does it include having a physical address?

Does it include accepting money from people from this state? (unlikely, but it could be interpreted that way)

Would incorporating in DE and registering in another state have any additional costs besides the registration fees for those other states? (such as income taxes, etc)


Incorporation Registration

asked Sep 24 '10 at 05:02
205 points

2 Answers


One would need to know which state you are considering, because each state has its own definition. For example, in CA (where I practice) the definition of "doing business" is "entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce". (This issue is discussed in "Doing Business in CA? Be Sure to Register ".)

An issue that you did not raise: Rather than incorporating in DE and registering in your two home states, you should consider incorporating in one state and registering in the other - you could save some money. Please see "Why (not) Incorporate in Delaware? ".

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

answered Sep 24 '10 at 08:33
Dana Shultz
6,015 points
  • Dana, considering Oregon and Massachusetts. Incorporating in one and registering the other is certainly an option if the alternative is to register in both as well as inc'ing in DE. – Adam 13 years ago


Not a CPA or attorney so before making a decision seek out appropriate councel.

  • Employees: yes - Tax withholding
  • Physical Address: yes - Property Taxes
  • Accepting money: where was it accepted (physical location) and do you have a physical location to sell the service/product there. So lets say you sell widgets in MN and have a web site that then gets sold to someone in MN. Sales taxes then apply. The state of incorporation governs whom gets paid corporate tax but because there are many other taxes that apply this doesn't get you out of the other taxes that apply.
  • answered Sep 24 '10 at 05:57
    John Bogrand
    2,210 points

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