Why Incorporate in Delaware?

Have you ever wondered why so many companies incorporate Delaware? Delaware has established a reputation around the world as the best and most business-friendly state in which to incorporate. Delaware's corporation laws and statues are used to model business laws in other states.

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.

Benefits of Incorporating in Delaware

One of the main reasons why companies incorporate in Delaware is the legal and liability protection of established corporate laws. These protections are 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. This means that Delaware LLCs and corporations owners/shareholders will have decreased liability and litigation.

Another reason why companies incorporate in Delaware is the 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 shares 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 system as powerful, as experienced, or as respected as 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.

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.

Before you initiate the process, be sure to check out our list of resources that will show you How to Incorporate in Delaware. Contact Us to get started.

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 some of the benefits of incorporating in Delaware and how Delaware's Court of Chancery is different from courts in other states. With the Delaware Court of Chancery being run by judges, 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, there are plenty of reasons why companies incorproate in Delaware.