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Things to Consider When Filing To Do Business in Multiple States

An entrepreneur will often run his or her corporation in multiple states. When filing in a few areas, one can take advantage of loopholes, enjoy tax benefits and run their company with ease. While true, there are downsides and an entrepreneur can hurt his or her cause when making mistakes during the process. With this in mind, here are three things to consider when filing to do business in multiple states.


In the past, people in California and other states fled to tax-friendly states like Delaware and Nevada. Then, a filer wouldn’t pay taxes in his or her home state. The loophole was closed years ago as tax authorities caught on and put an end to it quickly. Instead, if a person wants to run a Delaware corporation from California, he or she will need to fill out paperwork and still pay taxes at home. Since both the states and the federal government can track merchant accounts and credit card processing transactions, it’s wise to think deeply about this as one can waste time and money trying to avoid extra taxes.


When running an LLC, one will protect their name and card processing transactions. However, when filing in multiple states, a person can lose protections, especially with his or her merchant accounts. To avoid extra liability, one needs to consider filing in a state with a business-friendly attitude as they will end up in serious trouble when faced with a lawsuit from an ex-customer. Remember, it’s difficult to outrun authorities; remember, filing paperwork in multiple states can’t absolve a person of a serious crime.

Time and fees:

When attempting to register a name in another state, one will run into issues. Furthermore, it takes time and money as a business owner will need to pay to file the paperwork. On top of that, often, an entrepreneur will pay an annual tax to run the LLC in another state. While not a problem for established companies, it presents a financial issue for people without the money. To minimize this, a person needs to consider their needs.

When running a company, it’s often necessary to incorporate in multiple states. While beneficial for a host of reasons, one needs to consider the downsides. At the same time, a person can save him or herself trouble when researching their options.


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