I've been getting advice from some lawyer friends on what the costs are involved in incorporating as an LLC. The one of them is arguing that I should incorporate in California, since I'll have to eventually if I want to do business in California. Another friend who is in Nevada basically said that regardless of where I incorporate, if I wanted to do business in another state I'd have to incorporate in that state. So if I incorporate in California, and want to sell ads to someone in Nevada, I have to reincorporate in Nevada and pay all the associated fees. And vica versa. But that's prohibitively expensive. Is this true? Is there some exception for web based startups?
I previously asked for people to clarify "doing business in" ( http://answers.onstartups.com/questions/14340/incorporating-classify-doing-business-in ), and got some helpful feedback to the point that doing business in is usually in terms of having a physical presence or a paid-worker. This shouldn't involve your clients (otherwise you'd potentially do business with all 50 states, and that's quite expensive)