Where to Incorporate. A business is allowed to incorporate in any state it chooses. Most small and medium-sized businesses are incorporated in the state where they do the most business. Some states are more hospitable than others and offer fewer restrictions and other benefits to attract new firms.
a) An incorporated business is called a domestic corporation in the state in which it is incorporated.
b) In all other states where it does business, it is called a foreign corporation.
c) A corporation chartered by another government and conducting business in the United States is an alien corporation.