Reference no: EM131587147

"BEST AND WORST STATES TO INCORPORATE"

Assume you have just invented a "cloaking" device that can turn any object invisible to the human eye. You have ample investors clamoring to provide capital in exchange for "an appropriate return" from your invention and for "some control" in the new company that will produce the new invention.

You have decided to select the corporate form of business organization because you still may need to "go public" and raise money (we will learn why traditional corporations are best for this purpose later, but it is not important for this exercise).

You have decided that you will be the CEO of the organization.

However, your actual ownership stake in the organization (stock) will be minimal because you don't have much capital to offer. However, you are a "control freak" who doesn't want to be bothered by shareholders or anyone else who may want to have any measure of control over the corporation.

Assume that you decide to build a research and manufacturing plant in Oregon, but you realize that you can incorporate in any state. Which state should you chose and why? Be specific regarding your choice or choices. Which state or states would be the "worst" states in which to incorporate? Again, why?

With some internet research, you will find that different states have different pros and cons for incorporation. Some offer low (or no) minimum corporation tax. Others offer certain legal and procedural advantages that may make it easier for you, the "control freak" to minimize shareholder intrusion.

Some states stand out as more "shareholder friendly" than others or offer other advantages to all or to certain players in the corporate structure that others do not.
Please describe your results in about five to six double spaced pages. Be sure to include Delaware, California, and Oregon in your analysis.

Note that there are not necessarily "right" or "wrong" answers in this exercise. Your response to this exercise should simply show that you have investigated and understand the principal choices and "pros and cons" of incorporating in various states for various stakeholders.