Why would a company have a physical headquarters in one state but file for incorporation in another state? O Employees pay income taxes based on the rates of the chartering state, so a company may choose to charter in a state with lower income taxes. O Customers trust large companies, so a company may choose to charter in a separate state to give the appearance of being a national company. O Interstate litigation is very complex, so a company may choose to charter in a separate state to make it more difficult to sue the company. O States vary in the laws that govern corporations, so a company may choose to charter in a state with more favorable corporate laws.

Why would a company have a physical headquarters in one state but file for incorporation in another state? O Employees pay income taxes based on the rates of the chartering state, so a company may choose to charter in a state with lower income taxes. O Customers trust large companies, so a company may choose to charter in a separate state to give the appearance of being a national company. O Interstate litigation is very complex, so a company may choose to charter in a separate state to make it more difficult to sue the company. O States vary in the laws that govern corporations, so a company may choose to charter in a state with more favorable corporate laws.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Filing Federal Income Tax Return

A tax is the amount of money paid to the government on the revenue earned by the individual or business organization. It acts as an income for the government and an expense for the individual or business organization. There are different regulations regarding filing an income tax return in other countries.

Question

Why would a company have a physical headquarters in one state but file for incorporation in another state?
O Employees pay income taxes based on the rates of the chartering state, so a company may choose to charter in a state with
lower income taxes.
O Customers trust large companies, so a company may choose to charter in a separate state to give the appearance of being a
national company.
O Interstate litigation is very complex, so a company may choose to charter in a separate state to make it more difficult to sue
the company.
States vary in the laws that govern corporations, so a company may choose to charter in a state with more favorable
corporate laws.

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