Should I register my C Corp in Delaware if I live in Virginia and I'm doing business in Virginia?


I called a CPA in Virginia and he told me it's better to create your C corp in Delaware, because their tax system is so flexible that you don't need to pay for state tax. Is that true? And is it Ok if I'm doing business in Virginia? I live in Virginia, and I paid for the registered agent in DE. Can someone clarify?

Incorporation Tax Delaware Corporation

asked Aug 3 '12 at 00:49
Hendi Valentino
1 point

2 Answers


Delaware tax is indeed flexible, and Delaware imposes tax only on income earned in Delaware. Depending on your business plans, it may be favorable. You should check what taxes you pay to Virginia, as well. As you live in Virginia and will probably work for your corporation, it will likely to be required to qualify to do business in Virginia and pay VA taxes. If all your income is from VA - then you probably didn't save anything on taxes.

The reasons C-Corps prefer DE are legal reasons. Delaware court system, business law and privacy protection make it the state of choice to register corporations, especially if they're public. There are states with no taxes on corporations at all (Wyoming, Nevada, Washington, for example). Delaware has some other benefits.

You should discuss it with a lawyer, not only a CPA.

answered Aug 3 '12 at 02:47
5,090 points


You should change CPAs. If you operate your business in Virginia, you will have to pay Virginia state taxes, regardless of where the corporation is formed. If your corporation only has a single stockholder, then you probably don't need to incorporate in Delaware -- most of the advantage of Delaware only really matter when you have multiple shareholders with diverging opinions. And, incorporating in a different state does have costs. For one, you still need to apply to your state for authority to conduct business.

answered Oct 2 '12 at 04:03
Chris Fulmer
2,849 points

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