Delaware has long been touted as the state of choice for many companies that are looking to incorporate, including more than half of the Fortune 500 companies. Since it is not mandatory that you incorporate in the state where your business operates, you can weigh several factors to choose the right one for your business.

Besides being one of states with the lowest cost to incorporate (about $125), historically Delaware had the most liberal incorporation statutes, which gives the management team more flexibility in operating the company. Many states, however, have narrowed the gap in this regard and are now offering the same flexibility as Delaware.

But it's always a good idea to consult an attorney when deciding what state to use for incorporation. Even though there are many advantages to incorporating in Delaware, in some instances, if you primarily do business in a single state, local incorporation could be the best option for you.