A few weeks ago, I decided to add yet another item to my to-do list: start an online magazine. While, for competitive reasons, I will refrain from discussing the exact nature of this online magazine, founding an Internet venture has led me to the state of Delaware. Or, more specifically, incorporating in the state of Delaware.

From what I've read, two states — Delaware and California — have much more extensive bodies of state laws governing corporations and LLCs, which can be helpful. What's more, those extensive bodies of law have a wonderfully pro-business lilt. For example, Delaware LLCs pay a flat $250 annual income tax, regardless of how much money the LLC makes. Corporations pay a relatively modest 8.75% income tax, but — and other Internet ventures must love this — only on taxable income generated in the state of Delaware. It's genius. So genius, in fact, about 60% of the Fortune 500, countless Internet start-ups and even some foreign companies trying to avoid local red tape call Delaware home, at least in a legal sense. Delaware incorporation also, according to what I've read, helps should the company ever want to obtain venture funding.

This makes me wonder, though, why other states don't try to emulate California and Delaware. The states must benefit in some way from having such a concentration of corporate activity within their borders. Given that Delaware and California rank 9th and 11th respectively in terms of per capita family income, the public doesn't seem to suffer too greatly from decreased state-level regulation. Though, I suppose building a large body of corporate law requires time, or at least lots of litigation. And most states do have Delaware-esque corporate tax rates.

More on the magazine soon.