Deciding where to incorporate is an important consideration for any startup. Here are a couple of things to consider regarding the incorporation of a virtual currency business.
Does the State You’re Considering Have Existing Laws or Regulations Regarding Cryptocurrency Blockchain?
Lacking any real guidance at the federal level, various states have begun considering or enacting legislation regarding cryptocurrency and blockchain technology. These legislative efforts have been piecemeal at best, with no real consensus regarding how virtual currency businesses are treated.While an exhaustive overview of the current state of cryptocurrency legislation is beyond the scope of this article, there are a few things to consider when choosing where to incorporate a cryptocurrency blockchain startup.
First, research to see if any state where you’re considering incorporating is in the process of drafting or has passed legislation regarding cryptocurrency blockchain. You’ll also want to look to see if any departments within the state have issued opinions and guidelines regarding virtual currency. Specifically, you should look to see whether the state is applying existing money transfer laws and regulations to cryptocurrency – remember that an absence of legislation is not necessarily a good thing.
You should also explore how a given state is dealing with things like transparency and consumer protection when it comes to a cryptocurrency business, and, finally, keep in mind that all cryptocurrency laws at the state level are fairly new. This means that there will be little or no case law regarding the application of these laws and regulations on an existing cryptocurrency blockchain business.
Decide What State Gives Your Startup the Best Protection
Outside of existing cryptocurrency laws and regulations, consider how the state’s existing business laws will affect your startup. Is the state and its courts pro-business? Is there a large amount of favorable state case law regarding business issues? Are there other issues, such as taxes, fees, and licensure to consider? Any state must be thoroughly vetted for potential protections, advantages, and disadvantages when it comes to your particular startup before any incorporation paperwork is prepared.
In Making Your Decision, Consider the Overall Cost of Incorporation
If you decide to incorporate in a state other than the one where your business “resides,” you will be required to have a registered agent in that state. If you do business in any state where your entity was not formed, you will be required to register your startup in those states as a foreign corporation. This includes the state where your business resides if you’ve chosen to incorporate elsewhere. Finally, there are filing and annual fees associated with incorporation and registration in any state.
Making the right decisions regarding incorporation can be complex. That’s why it’s always a good idea to consult with an experienced cryptocurrency attorney when deciding where to incorporate your startup. The attorneys at Gouchev Law understand the issues facing a cryptocurrency blockchain startup, including incorporation, ICO, and regulatory issues. They can successfully guide you through the incorporation process and beyond, giving your startup the advantages necessary for initial success.