State Of Incorporation in United States

Practical Information

Note: Some of this information was last updated in 1982

A state in which a corporation (in U.S. law) is organized. A corporation is not necessarily incorporated under the laws of the state in which its executive office is located, especially if it is to carry on business in more than one state. Each state has a corporation law under which private business corporations for profit are organized. The laws of some states are more favorable to corporations generally than those of other states. The lawyer recommends the state whose laws are most favorable to the proposed corporation. The cost of incorporating and the tax laws in each state are taken into consideration. Therefore, the lawyer might organize a corporation under the laws of a state far removed from his office. Delaware is the leading incorporating state. In the state of incorporation, a corporation is known as a domestic corporation (in U.S. law) ; in all other states, as a foreign corporation (in U.S. law) . (Corporations organized outside the United States are referred to as alien corporations.)

Thus a corporation incorporated in Delaware is a domestic corporation there, but in New York and California it is a foreign corporation. A corporation is sometimes incorporated in more than one state, but generally if it wants to carry on its business in another state, it qualifies to do business in that state as a foreign corporation.

(Revised by Ann De Vries)

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