Why Delaware Corporation?
Why Incorporate in Delaware?
Delaware has established a reputation around the world as the best and most business-friendly state in which to incorporate.
More than 65 percent of all Fortune 500 companies and more than half of all U.S. publicly-traded companies are incorporated in the state of Delaware, and more startups are incorporating in Delaware every day.
The legal and liability protection of established corporate laws provided to Delaware companies is simply incomparable to what is offered by any other state in the nation, which makes it the Incorporation Capital of the World.
The Delaware Court of Chancery is the oldest business court in America, uses judges instead of juries (which speeds up legal proceedings considerably) and maintains the most advanced and up-to-date case law, which corporate lawyers in Delaware rely on and refer to, decreasing liability and litigation among Delaware companies, both corporations and LLCs.
Delaware companies also enjoy incomparable tax savings. There is no state income tax for Delaware corporations that conduct business out of state; no inheritance tax on stock held by non-Delaware residents; no state sales tax on intangible personal property (such as royalty payments); and share of stock owned by non-resident aliens are not subject to Delaware taxes.
In addition, Delaware corporations not operating in the state of Delaware do not need to acquire a business license in Delaware.
The fact that Delaware ranks number one overall as the most corporate-friendly state proves, once again, that no other state in America has a corporate court sytem as powerful, as experienced or as respected than Delaware’s Court of Chancery.
The privacy afforded to owners of Delaware corporations and LLCs is also incomparable. The state of Delaware allows you to file your company without listing the names of the owners, which protects the owners’ identities, personal information and privacy in general.
Owners of Delaware LLCs are not required to make the names and addresses of the LLC’s members and/or managers a matter of public record. There are only two circumstances in which a Delaware Registered Agent would be compelled to reveal this information: in the event of a legal proceeding or at the request of law enforcement.
The state of Delaware is also very flexible in a variety of ways that benefit the owners of Delaware companies. Why else do companies incorporate in Delaware?
- You do not have to live in Delaware in order to incorporate a company in Delaware
- You do not need a physical address in Delaware as long as you retain a Delaware Registered Agent for your Delaware corporation or LLC
- The cost to form a corporation or LLC in Delaware is one of the lowest in the country (and the world)
- One person can hold all the positions, and function as the sole owner, of a corporation or LLC
- Delaware general corporation law contains the most progressive and flexible corporate statutes in the country and infuses both predictability and dependability into your Delaware general corporation
- The Delaware Division of Corporations allows certain Delaware Registered Agents, including Harvard Business Services, Inc., to maintain a direct online connection to its electronic database, which allows us to file every company on a same-day basis. This enables us to offer the fastest document retrieval service in the country
- Venture capitalists, angel investors, and other investors prefer investing in Delaware companies rather than corporations formed in other states
- A Delaware corporation’s Board of Directors can set the price on shares of stock it wishes to sell.
Looking for more reasons to consider a Delaware company over one formed in your home state? Read this article about what kind of company benefits most from choosing Delaware.