Delaware, or the state you actually work in.
Delaware is the state founders are told to file in, and the reason is real: the deepest and most-tested body of business case law in the country, and venture term sheets that expect it. The part left out is that forming there while you operate somewhere else is two filings, not one. Pick your state to see both halves of that trade.
Four things that decide the answer.
Delaware gets recommended so often that the reasons behind it stop being examined. There are two good ones, one arithmetic problem, and a second calendar nobody mentions until the first year is over.
A tested body of law
Delaware's business case law is the deepest and most-tested in the country. That matters when ownership, control or a falling-out between owners is likely to be argued rather than assumed, because the same questions have been answered before and counsel on both sides can read the same answer.
What investors expect to see
Most early-stage venture term sheets ask for Delaware. Equity rounds are built around the Delaware corporation, and an LLC formed there is usually the intermediate step on the way to one. If you are not raising outside equity, that expectation is not pointed at you.
One company, two state filings
Forming in Delaware while you operate somewhere else means two filings rather than one. Delaware holds the formation. The state you actually work in expects its own registration as a foreign LLC, and it does not treat that as optional because the paperwork started elsewhere.
What repeats on each side
Delaware asks for an annual tax on the entity, every year, for as long as it exists. Your own state runs its recurring obligations alongside that, on its own cadence and under its own names. Two registers means two calendars, and the second one changes with where you are.
The reason for being in Delaware has to be real, because the second set of filings certainly is. Start with your own state.
Pick your state.
Each state page runs the comparison against one home state: what forming in Delaware involves, what your own state asks for if you form there instead, and what the foreign registration adds if you form in Delaware and operate at home.
A clean handoff, in four steps.
This starts as a decision and ends as one or two filings. Work out whether the reason applies to you, then let the filings follow that answer rather than the other way round.
Test the reason
Is there an equity round that expects Delaware, or a question about ownership and control you want decided under its case law? If neither is true today, the second filing is buying very little.
Compare both routes
Your state page sets forming in Delaware against forming where you already are, including what each side asks for once at the start and what each side asks for every year after that.
File the formation
The formation goes to whichever state you settled on, prepared from the details we already hold and tracked through to acceptance rather than handed back to you as a submission number.
Register where you operate
If the company was formed in Delaware and the work happens somewhere else, that second state gets its own registration, and from then on both registers sit on one calendar.
One company can sit on two registers. Both of them keep asking.
The rest of Compare & choose.
Every one of these is built the same way: a national explainer above its state pages. They are the filings that sit closest to this one.
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All 51 states →The full index lives on Compare & choose.
The questions founders ask before they file.
Should I form in Delaware?
That turns on facts a hub page cannot see, so here is the shape of it instead. Delaware earns its place when outside investors expect it, or when the way ownership and control get argued matters more than the number of filings you carry. It earns nothing when the company is one person trading in one state with no round in sight. The filings follow that answer, not the other way round.
Do I still have to register in my own state?
If the company is actually doing business where you are, that state generally expects its own registration as an out-of-state entity, plus whatever obligations it attaches to that registration afterwards. The Delaware formation does not stand in for it. What counts as doing business is defined state by state, which is why that line sits on your state page rather than on this one.
Why do investors ask for Delaware?
Because the market is built around it. Most early-stage venture term sheets ask for a Delaware entity, and equity rounds are drafted against Delaware law, so the documents, the precedents and the expectations all line up without anyone renegotiating them. An LLC formed there is commonly the intermediate step before the corporation the round actually needs. If you are not raising outside equity, none of that machinery is pointed at you.
What does the case law actually get me?
Predictability in an argument. Delaware's body of business case law is the deepest and most-tested in the country, so questions about control, ownership and what the people running a company owe each other have usually been answered before, and both sides can read the same answers. That is worth a great deal in a dispute between owners and close to nothing in a business that never has one.
What does forming in Delaware add every year?
Two sets of obligations instead of one. Delaware asks for an annual tax on the entity for as long as it exists. The state you operate in keeps running its own recurring obligations on its own cadence, and registering there as an out-of-state company does not switch them off. Two registers, two sets of dates, and neither one adjusts to suit the other.
Should this be an LLC or a corporation?
For an equity round, the market is built around the Delaware corporation, which is why term sheets point there. An LLC formed in the same state is commonly the intermediate step: it holds the business while the plan is still forming, and gives way to the corporation when a round makes that necessary. If no round is coming, the intermediate step has nothing to lead to, and the question folds back into where you actually operate.
Keep going, in order.
Compare & choose
Every hub in compare & choose, in one place.
Open the index → IndexAll 51 state guides
Every filing a business does, organised by jurisdiction.
Open the index → ServiceCompliance calendar
Every deadline that touches your entity, watched.
Track deadlines → ServiceTalk to a specialist
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