Benefits of Incorporating in Delaware

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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.

What are the benefits of incorporating in Delaware? 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.

Why Incorporate in Delaware?

In 2015, for the tenth year in a row, the U.S. Chamber Institute for Legal Reform ranked the state of Delaware number one in its comprehensive survey of the states' liability sytem ("Ranking the States").

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?

GEOGRAPHY

  • 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

STARTUP COSTS

  • The cost to form a corporation or LLC in Delaware is one of the lowest in the country (and the world)

STRUCTURE

  • 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

CONVENIENCE

  • 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

RAISING CAPITAL

  • 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
Form a Delaware Company Now

Why Incorporate in Delaware?

Have you ever wondered why so many companies incorporate in Delaware, and why you should think about doing so as well?

In this video, our founder and CEO, Rick Bell, tells you how Delaware's Court of Chancery is different from courts in other states, from being run by judges to having the most complete body of case laws, and how anyone can form a Delaware LLC or corporation, regardless of where a company does business.

Related Articles From Our Blog

The HBS Blog offers insight on Delaware corporations and LLCs as well as information about entrepreneurship, startups and general business topics.

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Delaware Company Formation

Since 1981, Harvard Business Services, Inc. has helped form 130,170 Delaware corporations and LLCs for people all over the world.

Registered Agent Service

Harvard Business Services, Inc. guarantees your annual Delaware Registered Agent Fee will remain fixed at $50 per company, per year, for the life of your company.