Domicile (entity)
The legal home of an entity, typically equivalent to the state of formation.
Definition
Entity domicile is the state where the entity is legally based for purposes of jurisdiction, taxation in some contexts, and legal proceedings. For Delaware LLCs, the domicile is Delaware. Domicile affects which state courts have personal jurisdiction over the entity, which state's law governs internal affairs, and where certain tax filings are made.
Context
Entity domicile is a more formal legal concept than 'state of formation' but the two often align in practice for US LLCs.
Example
A Delaware LLC's domicile is Delaware regardless of where the founder lives or where the business operates.
Common pitfalls
- Personal domicile (where a human lives) is distinct from entity domicile.
- Some tax treatments depend on entity domicile differently from state of formation.