Originally Posted by pornlaw

First, ask your accountant, second your lawyer. Where you set up your entity has more to do with taxes than anything else.

Also, usually you set up in the state where you do business. Otherwise you will be required by your state's tax authorities to register as a foreign corporation doing business in that state. If you dont do this you may face fines and penalties for back taxes as well as the fact you will not be able to use the courts of your state to even defend a lawsuit.

Which makes you a huge target for any lawyer that understands this. For example you set up in Delaware and you dont pay taxes in your home state. You get sued in your home state and before you can even defend the lawsuit you have to go back and pay 5 yrs of back taxes + interests and penalties. And you dont get more time to answer the lawsuit. So by the time you take care of your tax issues, the lawyer has gotten a default judgment against your company and you personally and is now moving to take to your assets.

Also be aware in California your personal information will be available on the CA Secretary of State's website. You will not be anonymous.

Good luck.