Legal Question in Business Law in California

On the incorporation issue, you have to ask attorneys in the state in which you incorporate. Unless you plan to be publicly traded, by the way, there is little to no advantage and some disadvantages to incorporating in Delaware. The big advantage to Delaware is extremely management favored and majority share holder favored corporate governance laws for publicly traded companies, that keep minority shareholders from being too pesky. As for keeping a foreign national on the payroll, as long as he lives in Spain, it should not be a problem. There will be international tax and banking issues with your payroll, but nothing that would be an actual barrier to having him on the payroll. Just things you will have to make sure you do right. If you want him to move here, that probably would not be a problem either, as there are special work visas available to business owners, and to key personnel with special knowledge and/or skills.

I agree that a small corporation that is going to be run from California achieves nothing by incorporating in Delaware, Nevada, Maine or anywhere but California. You'll be paying taxes to both states and preparing and filing reports for both states (the state of incorporation and the state where the business must be registered because it has operations there).

An "S" corporation cannot have a nonresident alien shareholder. This is a significant consideration in the choice between using a corporation and an LLC. While a "C" corporation ("regular" tax treatment, not a pass-through entity) can have anyone as a shareholder, in your case this could be a disadvantage that might tip the scales in favor of setting the business up as an LLC, at least during its formative stages.

You may need someone who has significant entreprenurial experience on your team as well as medical technology expertise in order to handle organizational, finance, etc. issues as they arise.