Downtown Mufflers, a partnership formed by Edmundo and Javier Escobar in California, has been in operation for five years. Edmundo and Javier would like to convert the business to a corporation. They will transfer all of the assets of the partnership to the corporation once it is formed and dissolve the partnership. They are having a difficult time deciding where to incorporate the business. California seems to be the obvious choice because that is where they are located, but Oregon and Nevada are nearby, industrial rental space is inexpensive in Nevada, and the population would supply an adequate number of qualified employees if they chose to move their operation there. Oregon would be a good choice because its damp environment leads to muffler rust which necessitates muffler replacement more often than in California or Nevada. Edmundo mentions that there are other considerations for selecting a state in which to incorporate a business. Which of the following is not a consideration for selecting a state for incorporating a business? A. The number of competing firms in the forum stateB. State corporate tax lawsC. State corporate lawsD. Hospitality to business

Investors will usually consider several factors before deciding on where to locate a business. The important consideration center around costs and a friendly business environment. Taxation is a significant factor that influences the choice of location. Jurisdictions with a high tax rate are considered unfriendly for business.

Investors prefer states that provide a conducive business environment. A country with laws that protect investor's interest and promotes hospitality is preferred. The presence of may competitors is not a major consideration at the time of incorporation. Many competitors may signify a huge and lucrative market, but their absence may also mean an untapped market.