I think I am searching incorrectly to find this information, but I am having a hard time wrapping my head around forming a corporation in the state of Delaware (or any external state for that matter).

If I form a corporation in Delaware, can I then open up a retail store in another state?

If I form a corporation in Delaware, can I run an ecommerce website where employees work in a different state?

If I form a corporation in Delaware, can I start a distributorship and have my warehousing in other states?

From what I understand, the answer to all three of those questions is yes. Basically, I don't understand why that would be or why that would be allowed. Am I missing something here, or should I just accept that that is how it is.

1 Answer 1


A corporate entity has to have a (single) domicile somewhere, because its members/owners will always want it governed by a single set of non-conflicting rules and laws. Many businesses incorporate in Delaware because it has gone out of its way to make itself an attractive corporate domicile.

When a business takes up activity in another state or country it does so as a "foreign" entity. For example, a Delaware corporation that employs someone in another U.S. state will have to register as a "foreign corporation" with that state (usually with the Office of the Secretary of State), pay "franchise" taxes/fees to that state, and comply with that state's employment law. A corporation with a "business presence" in another state will also likely incur tax liabilities associated with its "nexus" to the state. The most famous liability is the obligation to collect sales tax on all sales to entities within the state. But it may also incur corporate tax liabilities on the portion of its profit attributable to that state.

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