This may be the best choice for some, especially if you're operating with a low budget, and particularly if you're still equivocating: "I'm not even sure if my business will work." Your absolute worst option is to operate as a sole proprietorship, so at the very least you should establish a separate legal entity.

Keep in mind that "simple" and "asset protection" are inversely related. That means if you want more protection for your current and future net worth, keeping it simple (meaning using your home state because it costs less) and/or not having separate entities for separate assets are recipes for disaster, and much more expensive than doing it correctly from the start!

The more financial success you enjoy the more complex your structure should be. The key here is to outsource these services to a company that can make it easy for you.

But Wait...Planning to Move Out of Your State in the Next Few Years?

Then your best "pivot point" is Nevada. Here's why:

Imagine you live in and have incorporated your business in California. An unexpected opportunity arises, and a year later you move to Florida. California has an annual franchise tax fee ($800 at a minimum.) Florida does not. Do you want California to be your state of domicile, and now have to foreign register into Florida?

In this case, there's no advantage to being linked to California. So do you dissolve the California Corporation and form a new one in Florida? That strategy means you'd lose 1-2 years of track record, which is very important when it comes to establishing business lines of credit.

If you anticipate even a possible change of circumstances in the next 2-3 years, the best approach is to incorporate or form your LLC in a state like Nevada and foreign register from the start.

It is opportunity to incorporate and keep that corporation alive in the 21st century business community. With many people, a home based business is the answer to their dreams and having the freedom to move about the country is one of the advantages of forming your entity in a state like Nevada. Makes sense, doesn't it?