Do I Need To Register My Startup With San Francisco
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Seriously, every bit an entrepreneur who has incorporated businesses in Alberta, California, Delaware, Ontario and federally (I've too dealt with drop-down LLCs and a bunch of other funky tax planning vehicles), the all-time advice I can give you lot is kept is simple.
Register in the province or state you are in. KISS. Keep it simple giddy. That goes for anything in your company that is not-core to your business. Your incorporation location is seriously non-cadre.
Early on-stage Canadian startups should think twice nearly incorporating south of the border.
For early-phase startups, if you are incorporating — you probably are — don't over-optimize for incorporation location. The headache of trying to deal with registrars in other states and taxation filings in other jurisdictions is a total hurting and a distraction. A hurting and distraction you don't need in the early year or hyper-startup growth.
Answering equally an investor (since this is Inquire an Investor), registration location tin always exist changed later. Registration locations change if and when it becomes a business prerogative to practise so. The virtually common instance is a Delaware business concern registration when venture capital money comes in from the US. Why Delaware? Because Delaware has the most comprehensive set up of business laws — laws that by and large protect companies and board members from shareholders and customers. Hence why those laws are attractive to investors, like VCs, who come in and take a minority position and a board seat.
In Canada, we don't really have a similar arrangement with any one province. BC has some advantages for BC-based businesses with Affections Tax Credits for BC angel investors (why don't we have this in other provinces? Practiced question). Federal incorporation has the dubious honour of protecting your proper name in all provinces. Dubious, because it costs more, requires more than almanac paperwork and proper noun protection for early-stage tech startups is inappreciably a thing.
Lastly, early-stage Canadian startups should think twice about incorporating south of the edge. Early on-stage US investors don't generally crave US registration anymore, and the dual tax status will quickly become an annoying headache. While I'm not a fan of our SR&ED tax credit organisation, U.s. registration may very well jeopardize your admission to these Canadian tax credits.
KISS. Incorporate locally.
Sarah's take
On the other end of the "simplicity spectrum," I've recently seen more companies have a dual-incorporation structure. This constitutes establishing two sister companies that are owned by the same shareholders, one in Canada and ane in the U.s. (typically Delaware, for the reasons Christian outlined higher up).
The Canadian corporation typically owns the IP, maximizing SR&ED credits, IRAP funding, and CCPC status. The The states corporation enables access to certain incubators that require US incorporation, coverage past Delaware's comprehensive business laws, and less friction effectually recruiting US management talent (likewise equally sponsoring Canadian workers for Usa visas).
Once more, this is the opposite finish of the simplicity spectrum, so you'll want extensive legal counsel before making this decision. Your life will become a bit harder – retrieve reconciling your financials at the end of the quarter across both companies, dual taxation filings, and many other fiscal complexities. But a dual-corporation structure might allow you to take advantage of benefits on both sides of the border.
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Do I Need To Register My Startup With San Francisco,
Source: https://betakit.com/ask-an-investor-where-is-the-best-place-to-register-my-startup/
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