Internet business in Texas, but incorporating in WY
Asked by: Alex - 4 September, 2011
If I run an online Internet-based business in Texas (will be working out of the house and business will not have any physical assets), but want to incorporate in WY, will my "business" be considered a foreign entity? Am I better off just incorporating in Texas?
If I run an online Internet-based business in Texas (will be working out of the house and business will not have any physical assets), but want to incorporate in WY, will my "business" be considered a foreign entity? Am I better off just incorporating in Texas?
Answered by: Alec Green - 6 September, 2011
Alex,
Technically its a grey area - on one hand if your business could have no real connection to Texas, for example you would not draw any salary (only distribute profit), and would not deduct any expenses thats would explicitly link your business to Texas, then you could as well form a Wyoming entity and run your business under that entity. If you would later decide to register your business locally you could always form a Foreign Entity of your Wyoming company in Texas.
With that being said, Texas is not the worst state to form you company in (albeit there are pretty high state fees for almost every type of filing). So you might as well consider organizing your business in Texas and enjoy the advantages I mentioned above (for more details about deduction of business expenses please consult a Texas-licensed CPA), and save the hustle of registering it twice.
Alex,
Technically its a grey area - on one hand if your business could have no real connection to Texas, for example you would not draw any salary (only distribute profit), and would not deduct any expenses thats would explicitly link your business to Texas, then you could as well form a Wyoming entity and run your business under that entity. If you would later decide to register your business locally you could always form a Foreign Entity of your Wyoming company in Texas.
With that being said, Texas is not the worst state to form you company in (albeit there are pretty high state fees for almost every type of filing). So you might as well consider organizing your business in Texas and enjoy the advantages I mentioned above (for more details about deduction of business expenses please consult a Texas-licensed CPA), and save the hustle of registering it twice.
