When does a company become a citizen of a particular state?

A company is considered a citizen of a particular state based on its incorporation and its principal place of business. Specifically, a corporation is a citizen of the state in which it is incorporated, as well as the state where its principal place of business is located. This dual citizenship means that both the state of incorporation and the state where the headquarters are situated can establish a link for determining jurisdiction in legal matters.

Incorporation provides the foundational legal status of the company, while the location of its headquarters often reflects where its operations are primarily managed. Recognizing this dual nature of citizenship allows courts to appropriately assess and establish diversity jurisdiction in federal cases, which is particularly significant when considering the parties involved in litigation.

The other choices, while partially touching upon aspects of corporate status, do not adequately capture the comprehensive definition of a company's citizenship as it pertains to civil procedure. Thus, the correct understanding encompasses both incorporation and the location of the headquarters, affirming that the company becomes a citizen of both those jurisdictions.