Legal Question in Business Law in California

The decision as to whether DE or NV is more benificial depends on the business and service of process costs. Also, it depends on whether you are doing business on California, if so then yes, you are required to register as a foreign corp.

Incorporating in Nevada is great if your business is headquartered there; same for Delaware. If you are running what is essentially a California business (and being Web-based doesn't make the business a homeless nomad!!!), there is NO valid reason to incorporate anywhere but in California. Name me one!

You won't save any taxes ..... the California taxes on resident corporations is the same as on foreign corporations. Further, both NV and DE will charge you annual fees, and so will your resident agent.

You don't gain anything in secrecy - I can find out more about a Nevada corporation on line that I can about a California corporation.

Admittedly, there are advantages that attract large corporations with publicly-traded stock to states like Delaware, Nevada, Maine, Wyoming, etc., but these advantages will be of no value to a corporation that is closely held, and you will just be stuck with making multiple year-end reports.

Of course, if you could legally avoid registering in California altogether, that'd be a different story, but if the company's owners, computers, bank accounts, mailing address, etc. all point to it being a California corporation, it is extremely risky to try to avoid registering here and paying the franchise tax as a domestic (California) or foreign (some other state) corporation. Among other things, you may be denied the right to sue or defend in California's courts until you pay all taxes in arrears, plus heavy penalties.