Several factors may be in play when advising a client on the best state in which to form a new business entity. The formation and governance of corporations and LLCs are controlled by statutes that differ from state to state. For some companies, it is clear from the time of formation that the courts’ interpretation of the controlling statutes will be important, so case law can be as important as the statutes themselves. The location and type of business play a large part in choosing the state of formation. For some companies, differences in state income and other tax regimes may be critical considerations. In the Kansas City area, clients are typically trying to choose between forming in Kansas, Missouri, or Delaware, so we will focus on those states.
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