Registered office vs principal office is an important distinction for any business owner to know. There are numerous entities that you can form your business as including:

  • Sole proprietorships
  • Partnerships
  • Limited liability companies
  • Corporations

Each business entity will have its own responsibilities and requirements that state law deems necessary. For corporations, they will be required to have both a corporate office as well as a registered office, with each office having different roles in the company.

Corporate Office

A corporation will have a corporate office that will serve as its main office or headquarters. This office will be the central location where the top decisions will be made in regards to the corporation. It is in this office where the CEO and other executives will maintain their offices. A corporation will often have other offices that will report to the corporate office. Their direction and policies will come from the corporate office. Unlike a registered office, a corporate office does not have to be in the state of incorporation.

Registered Office

A corporation is a type of entity that is viewed as a separate legal entity from the members who own and run it. They are required to follow the laws of the state they are in that govern corporations, and those laws require the corporation to maintain a registered office as well.

A registered office is an office that has been registered with the state as the Registering Authority. This registration will need to be done with the Registrar of Companies/Competing authorities and occur when business starts. This is a physical office in which all of the corporation's legal documents will be stored in the event a lawsuit requires them. Additionally, this will be the place where any process of service will be served.

State law requires that this address be a physical location and must have a registered agent present during normal business hours to be able to receive paperwork on behalf of the company. The registered office must be located in the state of incorporation, and it is required to be established before a company can be incorporated.

Principal Place of Business

The principal place of business will be the main location in which the business they conduct is performed. In this place, they are typical company books and records as well as the company's management. The physical place of business for a company will need to be reported to the U.S. Secretary of State office.

There are also special rules for those who have taxpayers that work from home must prove that their residence is their primary place of business. To prove this, two criteria must be met.

  • The designated place within the home must be used exclusively for the performance and administration of the business.
  • There must be no other location where operations for the company are substantially performed.

When using your home as the primary place of business, you will be allowed to take certain tax deductions. This can include both rent and mortgage payments as well a certain percentage of the cost of utilities that is dedicated for use of the business section of your home.

Your physical location will not only have a bearing on the tax issues but also on litigation involving the company. Where the company is physically based will have a direct effect on the jurisdiction in which legal matters will be heard. The Supreme Court of the United States defines the principal place of business as the place where the corporation's officers will direct and control the company activities.

In many cases, the physical location of the company is also its headquarters, though the headquarters could also just be an office location for board members and executives to meet and keep their offices.

An example of a principal place of business that serves as a headquarters would be a single store retailer where the products are sold, the inventory is kept, and the managers and staff are trained.

Principal Place of Business vs. State of Corporation

A corporation is formed under the corporate laws of the state in which it is incorporated. It functions as a completely independent legal entity from its management and owners including separate taxation and liability.

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